The forestry industry looks likely to remain profitable as demand continues. Photo / Getty Images
The evergreen forests of Pinus radiata on New Zealand's landscapes stand as an undeniable testament to sustainable industry.
Not only that, forestry is also of significant benefit to the national economy, contributing a gross annual income of $5 billion, which amounts to 3 per cent of New Zealand's GDP.
Wood products are the country's third largest export earner, beaten to the top only by the giants of dairy and meat. Most importantly, global demand for wood resources is set to increase markedly in sync with population. This means forestry is set to become a stronger player still, and New Zealand's industry has the potential to be just as relevant in the 21st century as it was at its peak in the 1980s - or indeed more so.
Continuing developments in technology and finished wood products mean forestry can remain a sustainable sector, whilst also being increasingly profitable on the international market.
Sustainable sawmills
Tim Charleson, environment manager at Red Stag Timber, says most sawmills in New Zealand are now sustainably utilising their wood waste to fire boilers, producing steam and drying the saleable wood as needed.
"It's just pure economics," says Charleson.
"I don't see how they could stay in business without utilising wood waste to produce heat. To burn fossil fuels is becoming more expensive now. If you don't burn this wood waste you can have a major disposal issue."
But he adds that Red Stag Timber is going a step further with their wood waste.
"What we are doing over and above everyone else in the sawmilling industry is that we're also producing electricity from that steam. The investment was made way back in the '80s to put in co-generation when the mill was state-owned."
Microwaving wood waste
Marlborough-based CarbonScape is pursuing the ambitious goal of further developing technology, which it hopes could one day reduce global carbon emissions by a significant amount.
The company has already invented 'green coke' -a substance produced by putting wood waste through a microwaving process, turning it into a form of refined carbon which can be used in steelmaking.
Normally, coal is used to yield refined carbon, so green coke is a much more sustainable choice. It has been used by New Zealand Steel, which is so impressed with Green Coke's contributions to emissions reduction that it has signed a Memorandum of Understanding with CarbonScape, pledging to give technical support with the first green coke production facility which will be built near the New Zealand Steel mill at Glenbrook, south of Auckland.
At the end of November, Carbonscape achieved its funding target on the crowdsourcing website Snowball effect.
The power of biochar
Executive director of CarbonScape, Tim Langley, says the real potential technological impact on forestry long-term lies in a product known as biochar. "It's basically the same product as green coke, but used as oil amendment, and it has all of those activated carbon aspects of being able to retain moisture really, really well. It also acts as a sort of microbial reef in the ground."
He says there's work being done on biochar all over the world, and its impact on forestry globally as a sector is likely to be very large.
"The commercialisation plan is to make those products here in New Zealand, and then export them. Our dream is that they'll be using our technology in China, and using their own forestry over there."
Hole in the pole
TTT Products are based in Tuakau. They receive raw logs from sustainable forests, before manufacturing and crafting them into poles with a range of modifications for usage in a variety of applications, including for foundations, houses, multi-storey buildings, bridges, telegraph poles, and even marine conditions.
One of their versatile wooden pole designs features a unique hollow core.
"That hole in the pole opens up markets that you just couldn't do before - they just didn't exist," says owner and CEO of TTT, John Reelick.
"Your product moves, it twists, it does a few other things, but putting that hole in it takes all that out, and hence why we can go into markets that we just haven't been able to go in before. Nobody does this on a commercial scale anywhere in the world. The potential is more than huge; it's numbingly big."
He emphasises innovation as the secret. "You've got to think outside the square on what to do with your product, and so that's what we've been doing. We're coming up with ideas and solutions and we're physically putting these in the ground."
Mr Reelick says TTT's approach stands to benefit the forestry industry as it greatly broadens the range of purposes logs can be used for. What's more, it's highly cost-effective.
"We don't use much energy on it, which means our costs can be considerably lower. We're competitive against steel and concrete builders. We've worked out a way in which we're definitely competitive against steel structures, using wood."
TTT featured a range of their poles in the construction of Te Wharehou O Tuhoe, the new iwi and civil defence headquarters for Tuhoe located in Taneatua in the Bay of Plenty.
Read more from Element: Tuhoe's Living Building: A vision for the future
The beauty of wood
Wood is frequently being used in structures in our major cities, too.
The NZI Centre in Auckland, designed by architecture firm Jasmax, has a core building concept inspired by the sustainable and eco-conscious values of the building's occupants, and includes a lot of wood components.
New Zealand timber was also used extensively in the construction of the $65 million, 263-room Novotel at Auckland International Airport. It was developed by Tainui Group Holdings, and also fittingly features direct references to New Zealand's natural environment, culture, art and heritage.
Roger Dickies (NZ) Ltd have been encouraging and helping people to invest in forestry since 1971 -and in light of the industry's promising future, they're not letting up.
They recognise New Zealand as the world's best country for growing radiata pine, with fertile soils and a relatively temperate climate yielding exceptional forests for investors. The trees are generally ready for felling 28 years after planting, which is quick by international standards and makes for a faster payoff.
"We're not new boys on the block," says marketing manager Richard Bourne. "We've been doing this for many years. We've got 90 forests -over 28,000ha -and we're ticking along."
Roger Dickies caters to small investors who may want to buy a$ 15,000 section of forest, right up to a large $250,000 investment in a partnership. They also help companies invest in whole forests of $2.5 to $3 million in value and upwards. Mr Bourne observes forestry to be a great, perpetual, inter-generational investment.
"The local market is mainly covered by a secondary market -when someone gets to retirement, they sell out of their forest, and that gives people an opportunity to invest at all sorts of levels."
Associate Professor Hugh Bigsby, specialising in Forestry Business at Lincoln University in Christchurch, gives his support to forestry investment, believing the sector has bright prospects -not only financially but also environmentally.
"One of the key things about forestry is it has a great potential to be part of the solution for environmental issues when it's integrated across the landscape."
Bigsby argues there's still a huge amount of land in New Zealand which is suitable for planting, which could provide valuable stimulus to the industry and be of environmental benefit to the country through carbon storage.
Added-value
The New Zealand forestry industry was at its peak in the 1980s. In '84, forestry companies including NZ Forest Products, Carter Holt Harvey and Winstone were high on the New Zealand stock exchange.
Despite the visibility of the 21st century dairy boom, the beauty of forestry lies in its unseen, perpetual value.
The financial potential of forestry lies in overseas demand. While raw logs have become a larger part of New Zealand's exports -with a whopping two-thirds being sent to China alone - the value-added finished wood product is set to become more sought-after as the world's population grows and wood supplies decrease.
Bigsby says what sawmills and forestry companies need to start focussing on making their way up the value- added chain.
He admits there is the problem that raw logs are more profitable exports at first glance.
"It's not unique to New Zealand. I work a lot in Malaysia, and timber producers there have exactly the same problem. In effect, as a forest grower, you earn less money by selling locally than you do by just exporting raw logs, particularly into China."
The secret is to come up with truly innovative and sustainable wood products -and New Zealand businesses are increasingly doing just that. Bigsby says forty years ago New Zealand was the leader in the Radiata pine sector.
However, Chile -in which Carter Holt Harvey once held a notable share of the forestry market -has now leapt ahead, thanks to strategic investment in added-value wood products.
It's time more New Zealand businesses took the same cue, because forestry is only going to gain value internationally in the future. "From a forestry perspective it is all inherently sustainable -t he fundamental ethos of growing the forests is about perpetual crops," Bigsby comments.
"It provides a phenomenal model of a sustainable sector -underpinned by science and well-trained people."
Environmentalists have been disappointed at Fonterra's refusal to make use of wood waste to fire two large milk drying plants.
Late last year, a Waikato Regional Council hearings panel issued its consent for a coal mine to be opened at Mangatawhiri, south of Auckland.
While the panel acknowledged expert submissions arguing enough wood waste was available to completely substitute for coal in the milk drying plants, the company chose not to consider alternatives, saying that the mine would cause little social disruption.
Meanwhile, another large Fonterra milk powder drying facility in Darfield, near Christchurch, and constructed only last year, will also be fired by coal - citing cost as the reason.
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David Seymour said complaints have fallen by 92% since March.