Mixed reaction to log marketing plan

By PAM GRAHAM

A planned new company to co-ordinate marketing of log exports from New Zealand has been welcomed in principle, but possible participants want to see the details.

Carter Holt Harvey and the receiver of the Central North Island Forest Partnership (CNIFP) said they planned to put log exports through a new company that others could join.

Fletcher Challenge Forests supports the concept but has not committed to it.

Forest companies and analysts said the idea of co-ordinating log exports was good in theory.

"It does depend on having pretty much everybody in the pool," said David Stanley, head of research at Macquarie Equities.

"You would want more to come on board."

James Everrett, managing director of Rayonier Asia Pacific, said his company was prepared to listen.

"It is an idea that has been discussed among the forestry industry for a reasonable period of time. It has always come up with road blocks because of market complications," he said.

One difficulty was that there were multiple owners with different interests. "I'm quite curious to see how a framework can be constructed to meet all the stakeholders' interests."

Mark Bogle, chief executive at Evergreen Forests, said he was unsure whether the export company would buy the logs or act as an agent, or how certification of logs would work, but "co-operation on export marketing is something I am very strongly in favour of".

"Market development and technical support to customers is a key," he said. It was too early to say whether Evergreen would join.

Stanley said co-ordination was sensible, although the log market was a commodity market in which prices were set by a lot of participants.

The benefits of a co-ordinated New Zealand effort would be greatest when markets were weakest.

He said the plan was unlikely to drive share prices in the industry as most companies did more than just export logs.

Timber Industry Federation executive director Wayne Coffey said New Zealand's large timber companies should stop talking about doing things and just do it.

He said large forestry companies had made 47 announcements about strategy in the past five years. He would pick "a Scotsman from Southland" over current industry management.

Economic Development Minister Jim Anderton said the new company was a positive development for the industry.