New Zealand forestry firms unite to target China market

About 20 forestry and wood processing companies in New Zealand have reached an agreement on planning to work together to take on the highly lucrative Chinese market.

The companies include some of the biggest names in this country's industry -- Carter Holt Harvey, Pan Pac Forest Products, Blue Mountain Lumber and Tenon.

It is the first time New Zealand's forestry and wood processing companies have agreed to collaborate in such a way.

The agreement, still in its early stages, was reached at a forestry conference in Rotorua on the North Island last week, according to The Dominion Post Monday.

The companies involved will look at things such as joint market research, promotion of New Zealand and radiata pine in China as well as working together on regulatory issues and lobbying.

New Zealand Forest Industries Chief Executive Stephen Jacobi was quoted as saying that the move was important because of the level of competition in China from New Zealand's major competitors, including Canada, the United States and Nordic countries.

The industry is mainly based on logging and saw-milled lumbar and is worth about 400 million NZ dollars (about 272 million US dollars), mostly from logging.

The conference looked mainly at the potential to work together in three key market sectors -- construction, furniture and the fit-out of things such as apartments.

It is estimated that China will need 260 to 280 million cubic meters of wood during the next six years, but can only supply about half of that domestically.

Trade and Enterprise New Zealand is also looking at establishing a New Zealand wood and building products center in Shanghai.

The chief operating officer at Carter Holt Harvey, Devon McLean, said pooling resources "starts to look like a good idea" when a country with 4 million people tried to make an impact on a country with a population of 1.27 billion.