Wood, Building and Interiors: growth industries

Sector overview
Strategy
Key projects
Sector Engagement

Sector overview

The wood, building and interiors sector is very important to the New Zealand economy. Forestry and wood processing is one of New Zealand's largest industries, worth $4.57 billion in outputs in the year ended March 2005. The sector contributes 3.1% of GDP and employs 22,489 people in forestry and first-stage processing.

The majority of New Zealand’s production is exported with NZ$3.1 billion in products headed to key export markets in 2005.

During the year ended December 2005, 73% of all New Zealand log production was processed to meet international or domestic customer requirements with only the remaining 27% exported as logs.

However, international competition in commodity products is increasing at the same time as New Zealand’s wood supply is forecast to rise dramatically.

New Zealand is home to some of the worlds largest, and most intensively managed, sustainable, production pine plantations.

Most plantations are New Zealand Pine (pinus radiata), accounting for 89.2% of total plantation. Douglas Fir is also an important species for New Zealand with 6.2% of total plantations in Douglas Fir.

There are 1.8 million hectares of forest plantations in New Zealand. Forestry represents 7% of total land use in New Zealand.

The New Zealand industry has:

A plentiful, sustainable wood supply from experienced producers
Established markets in commodity products
A strong research capability and commercial potential in specific areas for wood-derived products
A growing awareness of the need to grow its position in global markets for value-added wood products.

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Strategy

New Zealand Trade and Enterprise's long-term vision is to help create a sustainable wood processing, building and interiors industry. This will be achieved through initiatives that enable companies to capture greater value from our forest resource, through further processing in New Zealand and/or through greater integration with export supply chains.

In the medium term its vision is to achieve critical mass in the value-added wood products market, and in the long term, the wood-derived products markets, including bio-materials.

The NZTE Wood, Building and Interiors Sector Engagement Strategy builds on the Government’s engagement with the sector through the Wood Processing Taskforce and the Forest Industry Development Agenda. It focuses on market development for value-added wood and wood-derived solutions, with NZTE facilitating commercial relationships between New Zealand-based companies and international value chain partners.

NZTE’s approach recognises that the development of value-added sectors in New Zealand depends on three areas:

The global consumer: The sector needs to move closer to the consumer to understand what they value and where that value is created
Market development: The sector needs to identify, and work with, strong players who can work from the global consumer, through value chains and distribution channels, to the New Zealand sector – and then draw on local capabilities to provide the value-added goods and services.
Industry development: The sector needs to attract investment to retain its cost competitiveness, develop its productivity and value-added capability, and ensure a robust domestic infrastructure.

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Key projects

China

NZTE undertakes significant market research to determine emerging areas of opportunity for New Zealand’s wood, building and interior producers. The focus of this research includes interior fit out, treated timber and structural timber opportunities.

Australia – market aggregation

NZTE works with a range of New Zealand companies to investigate potential aggregation models for supplying a range of New Zealand Pine products to major Australian housing developers.

Indian market development

Due to the explosive growth occurring in India, NZTE is also investigating potential new markets for New Zealand Pine. New Zealand is a long-standing exporter of pine logs to India, but there may be potential to drive growth in value-added products such as treated timber and appearance-grade solutions for this market.

New Zealand industry development

NZTE works with companies in the sector on an individual and regional basis to develop the industry’s capability to respond to global market opportunities.