Great harvest needs nursing

By PAULA OLIVER forestry writer

The forestry industry is in danger of losing Government support unless it changes its focus of research to projects that could make significant long-term changes, industry chiefs say.

Touted as potentially the country's biggest export earner in the next 10 years as several big plantations reach maturity, forestry receives $26 million a year for research from the Foundation for Research, Science and Technology (FRST).

Most of that goes to Rotorua-based Forest Research to undertake a diverse range of projects - from developing new machinery to improving tree growth, and biosecurity.

But FRST has indicated that its money will now be directed to industries with more progressive research outlooks - those concentrating on projects that could make long-term changes instead of short-term, quick-money-driven improvements.

Ironically, the forestry industry probably needs FRST's money more now than ever.

Forest Research chief scientist Keith Mackie says FRST's argument is based on a perception that the industry is sitting on the doorstep of a golden opportunity.

Over the next 10 years, thousands of hectares of plantation forest will be ready for harvest, and the $5 billion industry is projected to at least double in size.

But, as many in the industry have admitted, not enough has been done to capitalise on the opportunity.

The industry is seen as one that in recent years has looked to create efficiencies rather than revolutionary ways of doing things.

Now it is addressing roading, labour and research problems as its chance to bloom ticks by.

Most agree that adding value to the logs, by turning them into products before they leave our shores, is the key to making the most of the on-coming "wall of wood."

New products, such as fibre-based, high performance composites, could be developed in conjunction with Forest Research.

But the Government believes the industry is underinvesting in long-term strategy.

What is needed to secure its support is a cohesive commitment from the industry to look at new ways of operating, Dr Mackie says.

"Our goal is to engage with the sector to make damn sure they do know that their Government support is under threat.

"If they engage, then it won't be under threat.

"But there is an acknowledgement among them that they can't continue to do what they've done in the past around commodity products."

In the past six weeks, the first steps toward presenting that united front have been taken.

A series of meetings, involving everyone from forest-owners to the Pine Manufacturers' Association and the pulp and paper sector, has produced a common strategy draft document.

It focuses on where they are now, where they need to be in 10 years and how science can help them get there.

Industry players have responded to the challenge, says Dr Mackie. "We've been able to convince the sector to totally relook at its research science and technology strategy."

Smaller players, who are predicted to own at least half of the country's forests in 10 to 15 years, are seen as important contributors to the strategy.

A shining light in the battle to retain funding so far has been Carter Holt Harvey, Dr Mackie says.

As part of its upcoming changes in structure, Carter Holt also intends to establish a separate business for research and development, looking initially at fibre composites.

Criticism of the industry's apparent lack of investment is seen as unfair by some in it.

They say it depends on how research science and technology is defined.

But Dr Mackie says that although a good deal of spending is being done, it is not always directed at strategic areas.

Projects that bring immediate improvement may satisfy hungry investors, but miss the opportunity to revolutionise the industry. And that is where the real money and success lies.

The need to get the industry together was stressed at the Forest Industries Council's annual conference last October, where Deputy Prime Minister Jim Anderton and Forestry Minister Pete Hodgson urged the industry forward.

The Government is keen to harness the opportunity that the "wall of wood" presents, because a lot of the resource will mature in non-traditional forestry areas - Northland, the East Coast, Hawkes Bay and parts of the lower North Island.

Some of these areas suffer employment problems, and the forestry boom is seen as an opportunity to address this, in line with the Government's regional development strategy.

"If the opportunity is to go off, it may be that we need some additional funding specific to those initiatives," Dr Mackie says.

"But I'll say categorically that won't happen unless the industry now steps forward and demonstrates its commitment to also fund those developments in the sector."

Ministry of Economic Development representatives say the wheels are moving quickly, and a Wood Processing Taskforce has been set up in partnership with the industry.

The group includes Carter Holt Harvey Wood Products chief executive Devon McLean, representatives of Rayonier, Weyerhaeuser, Fletcher Forests, the Timber Industries Federation, smaller forest owners and processors.

Mr Anderton says the taskforce needs to take the forestry industry from a $5 billion industry to an $18 billion, or even $20 billion, one in the next few years.

The group's first meeting was in Wellington last month and resolved to tackle head-on the issues of roading, rail, labour and skills shortages, and research and development.

Mr Anderton describes each raw log that is shipped overseas as an economic failure.

He says there is a clear need for the Government and industry to form partnerships to produce leading edge products.

Those partnerships are beginning to take shape, and Dr Mackie is positive about the outlook.

"The key to it is that with limited funding we've got to have the balls to reduce funding in some of the more traditional near-term areas ... and push it into a strategic initiative that is going to deliver far greater returns from fibre," he says.

"That's what the Government is saying. They're prepared to shoulder that risk. But industry, they expect you to invest in the short-term stuff which helps your bottom line."

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