Small forester happy to stay out on a limb

By PAM GRAHAM

Trans Pacific Trading, a company that has been selling export services to forest owners for five years, supports co-operation to develop markets but wants to remain independent of a venture being set up by big forest owners to co-ordinate log export marketing.

The Central North Island Forest Partnership's receiver, Ferrier Hodgson, and Carter Holt Harvey are trying to form an independent company to handle log exports.

They want Fletcher Challenge Forests and others to join the bid to cut shipping costs, present a united face to buyers and build markets.

The idea is to stop "New Zealand competing with New Zealand".

"We support increased co-operation in promotion and market development," said TPT. "If Export Co will focus on that we will support it".

Nevertheless, "there will continue to be a need for an independent service provider to cater for the needs of those organisations not provided for by Export Co and TPT intends to be that independent alternative".

Details of how Export Co - it is a working title only - will operate are sketchy. Carter Holt Harvey chief operating officer Devon McLean told Inwood International magazine the company would buy logs from suppliers and have a good proportion of Carter Holt Harvey staff on day one.

Independent log exporters could join but a mechanism for that was being worked through.

The intention seems to be to sell Export Co's services in other countries and to handle wood chips.

TPT sees itself as a successful model of an export service company and says Export Co will work only if it is transparent and independent of the three big forest companies.

TPT was set up by Fletcher Challenge's former forest export sales and shipping manager Peter Sigley and Korean log sales manager Wim Ableskamp in 1998.

Rens Bosman, a former Carter Holt Harvey executive, joined later.

It does not own forests itself, reducing conflicts with clients, and it does not own the exports it handles. It co-ordinates shipping with the aim of reducing freight costs, provides information for forest owners to make harvesting decisions on and develops new markets.

TPT is a small team in a modest office using industry knowledge and contacts to create a service business to an expanding market segment.

The company organised the sale and shipping of 500,000 cu m of export logs worth $38 million from 10 ports last year and expects to increase that by 50 per cent in the next two years.

TPT Lumber was set up to sell lumber produced by sawmills and the company is talking to the Timber Industry Federation about developing markets for woodchips.

Sigley said too little effort was being put into building markets and it was not known how much Export Co would do that.

Bosman said competition between export companies would improve service to customers and "someone has to look after the small guy".

He is upbeat about the markets for pinus radiata, arguing the species is filling a gap in Southeast Asia where hardwood supply is declining.

During the next five years pine "is going to dominate the Pacific" as an industrial raw material for further manufacture by plywood, paper, packaging and furniture makers re-exporting from Asia.

Developing new markets was not easy but "once you move radiata in you can take product out in the same network".

But improving exporting was not the only issue: "supply is the fundamental key".

Small foresters believe large companies increase supply when it suits them and they wonder how Export Co would handle a decision by a member to suddenly supply 100,000 cu m of logs.

Bosman advocates the idea of a national stumpage market to influence supply.

Such a market would set a benchmark price for forest owners similar to those that exist in the dairy and beef industries. Stumpage is the sale of standing trees.