In what was described as an unprecedented move, China Forestry Group NZ and Waipapa Pine last week entered into a long-term supply agreement that will protect New Zealanders' jobs and promote Northland's economic development.

The agreement, signed at the Waipapa Pine sawmill in the presence of Forestry Minister Shane Jones, gives Waipapa Pine Ltd the assurance that China Forestry Group NZ will support the sawmill with stable log supply and pricing throughout 2018.

The contract was in line with CFGNZ's global drive to stabilise the forestry supply chain, aimed at avoiding potentially devastating price fluctuations at each step in the process by managing a balance between supply and demand.

Mr Jones said the agreement tied closely into his desire for forest owners and domestic processors to work together to add value to domestic and export markets.


"This Government is keen to attract high-quality overseas investment that brings genuine benefits to New Zealand," he said.

"I'm pleased to see the agreement that has been made between these two parties, which will ensure security of supply for Waipapa Pine and jobs for local workers."

"I'm pleased to see the agreement that has been made between these two parties, which will ensure security of supply for Waipapa Pine and jobs for local workers."

Waipapa Pine director Shane Horan said the stewardship shown by CFGNZ was symbolic of the step-change many foreign investors were hoping for in New Zealand.

"I trust this agreement will help change the perception some people have about a lack of commitment from foreign investors to adding value to production in New Zealand," he said.

"For forestry in New Zealand to prosper, we need foreign investment, so it is vital to forge strategic relationships with the right kind of investors."

The agreement secured ongoing employment for the more than 100 people who worked for Waipapa Pine at its sawmill in Kerikeri and timber processing plant in Whangarei, Mr Horan saying the assurance of long-term supply benefited the sawmill, its staff and customers.

It was also good for forestry contractors, because more sustainable harvesting provided regular employment.

CFGNZ's chief operating officer, Steve Walker, said his company was committed to sustaining and growing local employment in and around Northland.

"The supply agreement we have put in place today is proof of our long-term commitment to this community and this region. Hopefully, this is the start of lasting relationship between China Forestry Group NZ and Waipapa Pine," he said.

The logs to be supplied to Waipapa Pine will primarily be sourced from CFGNZ's Waitangi forest, which, along with other Northland forests owned by the group, was unique because of the combination of cultural, environmental, social and economic factors that applied.

The group had taken deliberate steps to ensure that all these aspects were managed carefully and with due respect.

Harvesting would be limited to the rate at which the forests were growing, so the volume of available logs would remain stable.

"We have to acknowledge the excellent work by our forestry manager, PF Olsen," Mr Walker added.

The forest was added to the Forestry Stewardship Council (FSC) register earlier this year, ensuring its management in accordance with audited sustainability principles. At the same time there was a focus on preserving wetlands and protecting the growing kiwi population.

In recognition of the cultural importance of the area, the group had engaged with local hapu to consult and advise them on how protect culturally significant areas.