Forestry

The Southland forestry industry is well established and diverse in terms of commercial forest species because of unique climactic conditions and the utilisation of land at higher altitudes. Southland has a long history in forestry - the first production thinnings from planted forests were processed in 1933. There is a strong emphasis on sustainability of forestry in Southland, 99% of wood is sourced from planted forests, and 1% from sustainably managed natural forests.

 In Otago/Southland there are 28 sawmills, an MDF plant, a mouldings facility, a veneer operation and two wood chip plants. Forestry growth has slowed over the past years, due to increasing returns to dairy farming. This has always fluctuated, and the introduction of the Emissions Trading Scheme in line with New Zealand’s objectives under the Kyoto Protocol may increase returns to forestry again. Due to Southland’s strong history of forestry, the regions infrastructure has developed complementarily for forestry. The forestry and wood products sector in Otago and Southland employ more than 1,650 full time equivalent workers with a wide range of skills. More than three quarters of the regional harvest is processed in some form.

Competitive advantages

• The wood resource in the region is characterised by stems with long internodes, which are ideal for producing long lengths of clear, defect-free lumber and lower density whiter wood that is easily machined and ideally suited to producing high quality appearance grade lumber and decorative veneers. The wood also produces uniform acceptance of decorative stains and has good paint retention.
• Southland has a well developed transport network with a local port, extensive road networks and rail.
• Government initiatives around renewable energy fits well with Southland forestry practises.
• Productivity gains in Southland are around 5% per year.
• Around three quarters of the regional harvest is processed in some form, increasing the amount of sawn timber exports.

 Trends and opportunities

• Increasing supply of Douglas Fir. Douglas fir already has a strong international reputation for structural and furniture uses, whereas New Zealand forest producers have had to push radiata pine as a quality resource.
• Bio-energy and bio-fuel production from harvest residues has been identified as a potential revenue stream for growers.
• Processing companies are increasing their productivity through the use of improved scanning and sawing technologies. This means that more of each log can be turned into sawn timber. There is also an increase of further processing of low-grade logs, which may have previously been exported as logs.
• Sustainably grown indigenous high-value sawn timber is being used for flooring, furniture, panelling and veneers. The main species for use are Silver Beech and Rimu. Note that there are high standards around the extraction and recovery of native timber.
• Southland forestry has a young age profile because of recent rapid expansion, and wood availability is predicted to be reasonably static until 2015.
• Wood residues (bark, sawdust, wood chips and short length) are being utilised for a variety of uses including energy source, feed pads for dairy, firewood and garden landscaping.
• A co-operative approach will be vital for tackling constraints facing the sector, mainly around skills and training, transport and planning and operational efficiencies.