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Home / Business

<i>Between the lines:</i> Forestry bonanza could slip away

2 Jan, 2001 09:12 AM2 mins to read

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Forestry should imitate the dairy industry if it wants to fully exploit the vastly increased amount of wood that will soon be available.

If all predictions are correct, our $5 billion wood harvest is set to double in six years.

Unfortunately, as quick as they are to make the prediction, industry players
are just as quick to agree that we are not ready to make the most of the opportunity.

Perhaps the greatest element needed in the industry this year is a stronger move towards working together.

That does not mean joining the two largest companies to emulate the recent dairy merger.

What it means is working together in a cohesive effort to process the wood and send it as far afield as markets demand.

And the markets are there, say many players.

A recent attempt to get the industry to market itself internationally as one entity failed, despite originally being hailed as a path to the future.

Wood New Zealand, funded by several forestry businesses, aimed to place representatives permanently in export countries to drum up sales.

After just a year, it failed through lack of more funding. While some argue that it took the wrong approach, others say much can be learned from the experience.

That aside, the year ahead has been described as mixed at best by analysts. The Fletcher Forests and Citic dispute will be resolved by either the parties or their bankers early in the year - but nobody knows what that outcome will be.

Much hinges on it, and if the word "uncertainty" could be used to describe last year, analysts are quick to use it again when it comes to predictions about 2001.

What will cashed-up Carter Holt Harvey do with the money it is sitting on?

What will happen to Rubicon, the new entity created by Fletcher Challenge that is largely made up of forestry assets, although Fletcher officials are keen to change that impression?

Will an overseas buyer step in and take a cornerstone holding in Fletcher Forests?

These are all questions that only time will answer, say analysts, who admit that the forestry year looks harder to pick than Madonna's next hair colour.

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