New Zealand timber industry sees Japan earthquake as opportunity for revival, but union warns high log prices will force more sawmills out of business before demand kicks in

LOS ANGELES , March 16, 2011 () – New Zealand's NZ$4 billion wood industry, the country's fourth largest export business, sees the disaster in Japan as a double dip revival opportunity, according to a report by BusinessDay.

Wood Council chairman Doug Ducker said the Japanese will need to import large quantities of wood and wood by-products to rebuild. In addition, the earthquake and tsunami has destroyed parts of the country's wood processing industry, while other plants have been forced to halt manufacturing.

Ducker, managing director of Japanese-owned Pan Pac, a forest owner and sawmilling operator in Hawkes Bay, said a mill in Japan that supplied 25% of the country's plywood needs had been destroyed.

Ducker added that Pan Pac's owner, Tokyo-based Oji Paper, had reported no major damage at its 17 mills in Japan but had shut down five of its plants in the north-east.

New Zealand's National Distribution Workers Union says it is concerned that more sawmills will fail before demand from Japan, and from the Christchurch earthquake, takes off. Earlier this year the union declared that New Zealand's timber industry was in crisis, citing 1,129 job losses since 2008.

Strong global log prices have contributed to the industry's problems, and the union's general secretary Robert Reid said the situation could be about to get worse as prices are expected to rise still further in Q2.

Ducker said New Zealand's domestic wood supply is under-utilized, noting that New Zealand logs shipped to China may now be processed by Chinese mills into lumber for the Japan rebuild.

Ducker said forest industry representatives have urged more wood to be used in the rebuilding of Christchurch in preference to concrete and steel.

The primary source of this article is BusinessDay, Wellington, New Zealand, on March 15, 2011.

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