Foresters link up to tackle China

By PAM GRAHAM

Eighty representatives from across the industry attended a conference in Rotorua last week organised by the New Zealand Forest Industries Council and New Zealand Trade and Enterprise.

It ended with a statement, endorsed by the country's biggest forestry company, Carter Holt Harvey, on working together to make inroads into the Chinese market.

"We're talking about a country of 4 million people trying to make an impact on a country of 1.27 billion," said Carter Holt's chief operating officer of forests, Devon McLean. "Pooling resources starts to look like a good option."

The potential in China was staggering, but so was the competition, said Stephen Jacobi, chief executive of the Forest Industries Council. It came from countries like Chile, Canada and the US.

Keynote speaker Matthew Brady, former general manager of the American Forest and Paper Association's China programme, said demand for wood products in China was growing. Exporters had to identify and target market segments, invest in educating buyers and work with local partners.

China historically used concrete for construction, but exposed wood beams were now being put in buildings for the feel.

"Also, wood is now being used more in outdoor construction, like decking," he said.

The statistics in the backgrounder for conference participants would encourage anyone.

China has 300,000 hotel rooms that need upgrading.

About 10 million new households are formed every year by marriages.

Even with the one-child policy, there are 200 million children and parents spend $60 a year on furniture for each of them.

A high exchange rate and high freight rates are cutting exporters' margins. New Zealand exports to China have fallen 11 per cent in the year to date. At the same time, Russia has expanded exports by 32 per cent and the US by 29 per cent.

The idea is to follow up bureaucratic breakthroughs with marketing initiatives.

"What you are seeing now is that companies are realising that they need to have some sort of presence in the Chinese market," said Brady.

Carter Holt has already invested in processing facilities in China.

Companies that worked together would have a larger market footprint, said Brady.

He said the work that had gone into getting pine into the building code this year now had to be backed up with market development.