Wood processors say Government help needed if industry is to survive

Sequal owner David Turner says governments over the past decade have failed to stop the flow of raw log exports to the detriment of all New Zealanders.
Sequal owner David Turner says governments over the past decade have failed to stop the flow of raw log exports to the detriment of all New Zealanders. Photo credit: Getty

By Riley Kennedy and Susan Murray of RNZ

Wood processors are slamming successive governments for failing to support New Zealand's struggling wood processing mills.

Whakatāne Mill, which makes export paper and packaging products, on Wednesday proposed it would close, resulting in the loss of 210 jobs.

The mill owners said its prices were no longer competitive internationally.

David Turner owns a Kawerau timber processing mill, Sequal, and agreed there were specific risks with the Whakatāne Mill, but said that governments had failed for the past decade to stop the flow of raw log exports, to the huge detriment of all New Zealanders.

"We don't export materials to China because it is cheaper to process in China, we export raw material there because the Chinese people have created the environment where their people can be employed," he said.

"I was at a conference in China and the Chinese people got up and said 'what we don't understand is in China we get a lot of benefits to process New Zealand logs but in New Zealand you can never pay the price we can pay for logs. Why does your government not care about its own people'?

"Over the last five years, what we have seen in China is that they have closed their own domestic forests for harvesting because they would like fibre self sufficiency, so they don't want to import any logs from New Zealand by 2035.

"But they want their own period where they are growing their own, and building self-sufficiency."

Turner said that would cause a backlog of a whole lot of logs and a destroyed processing sector which would cause the value of New Zealand logs to collapse.

"We will be left, as a country, wondering what we are going to do next and scratch our heads," he said.

"It is one of the greatest violations of responsibility left to the young generation, what we are doing in the wood processing industry today."

Turner said the Government was aware of this issue. While its words filled him with hope, the level of inaction and apathy did not give him confidence there would be any change.

Wood Processors and Manufacturing Association chief executive Jon Tanner backed that up, saying New Zealand processors were up against a trading environment that was far from fair and the Government needed to step in.

"What New Zealand processors are up against is an international industry that is heavily supported by its governments - and they have been for many years, through things like subsidies - but we are talking about huge amounts of support here," Tanner said.

"New Zealand being a free trader, none of this stuff exists so our companies are competing with that kind of environment."

Tanner said trading partners had recently 'upped the ante' on the amount of support they were giving to manufacturing in response to COVID-19.

He said what the Government needed to do was clear.

"I think first of all, we need to go back to square one and look at the kind of policies other governments are putting in place to support their manufacturing industries, to work out what would be the cost-benefit of doing similar sort of things in New Zealand," he said.

"Now, the Government hasn't done that. It is talking about doing it, the minister was referring to an industry transformation plan.

"That needs to happen now, not six months or 12 months in the future, our competitor countries are already doing this for years so this is not a new message from the wood processors."

The urgency was increasing by the day, he said.

Minister of Forestry Stuart Nash said the mill closing was a real blow for the community and the local economy.

Nash admitted the sector had not been well supported by previous governments, but said this government was working to support the industry.  

"We lost control a bit when we sold the vast majority of state owned forests, so when you don't own a forest it is difficult to make decisions on where you can send wood to the greatest benefit to society," Nash said.

"But, that is in the past... I am keen to work with the industry to create an environment that will allow them to invest in processing facilities."