Restructuring of the local timber industry likely

6 November 2014

The New Zealand Timber Industry Federation believes that there will need to be changes to the structure of the Nelson and Marlborough saw milling industry in order for the sector to grow in the face of some real challenges.

“The ability of Saw Mills to get a secure and constant supply of logs to cut has been a major problem in the region and has forced some operations to take a long look at their production focus” says NZTIF CEO, Brent Coffey.

The shortage of logs has been driven by high export demand, especially from China. New Zealand raw log exports have increased 240% since 2008.

“The challenges the industry is facing now, calls for some rationalization which could result in short term pain but once completed will result in a stronger saw milling sector”.

The future for the saw milling industry is promising. The domestic market is showing steady growth and the price of timber is increasing but still needs to be higher in order to meet the rising costs that saw mills face.

International markets are also starting to show some recovery but the high New Zealand dollar negates a lot of the progress made.

“The industry has been working hard on efficiency gains but more serious capital investment will be required to ensure continued success” says Coffey.

“With implementation of world class production efficiencies, product specialization, a rise in timber prices and the support of log suppliers, the future for saw mills in the Nelson and Marlborough region can be a good one.”