Commercial forestry is New Zealand’s third largest export earner and contributes 2.9% of New Zealand’s GDP

The forestry and wood processing sector was the second largest employment sector in Rotorua in 2012 and generated 14.7% of the district’s local economy.

Rotorua is located in the heart of New Zealand’s forestry and wood processing industry. The Central North Island produces nearly half of New Zealand’s annual wood harvest.

The forestry industry is firmly established in Rotorua and has extensive transportation infrastructure and support services required to gain a sustainable competitive advantage. 

A large proportion of trees harvested annually in the Bay of Plenty region are exported as whole logs without local processing. 

Research and analysis over the last year has identified the opportunities and barriers for growth. This has included the need for further understanding of the supply chain opportunities for China, comparative supply and processing costs and engineered wood products potential.

The China market has been identified as a key area for growth in the forestry sector. Work undertaken by Destination Rotorua has highlighted the lack of knowledge and understanding of the log to customer supply chain for wood products in China. This lack of market insight makes it extremely difficult to prepare investment proposals to attract Chinese investment. Destination Rotorua will undertake this analysis in the next year to better understand the investment opportunities and how to deliver the outcomes in the forestry sector.

Business Profiles
Red Stag TIMBER

Red Stag is Australasia’s largest sawmill. Red Stag Timber is an independent, privately owned timber company, based in Rotorua only 10 minutes' drive from the city. It was established in 2003 to operate the Waipa Mill that was originally founded by the government in 1939 and subsequently privatised in 1996. Red Stag Timber consists of two sawmill lines, with associated timber processing operations for kiln drying, planing, treating and remanufacturing. Each utilising world class processes and modern technology. Currently producing over 400,000m3 of Radiata Pine and Douglas-fir lumber per annum, resulting in an annual turnover of over NZ$120 million.

Red Stag Timber has a long-term commitment to further developing its product range and market base. Its particular focus is on structural lumber products, but it also produces landscaping, industrial, appearance and furniture lumber grades. These products are sold in New Zealand and exported to Australia, the Pacific Islands, Asia, Africa, Europe and North America.

Red Stag Timber employs approximately 260 staff to meet the various operational and business skill requirements, which contribute to the success of the company. Red Stag has a proud history of being one of Rotorua’s largest employers and having a close-knit community.

With the mill situated within the Whakarewarewa Forest, Red Stag Timber employees can readily take advantage of the many mountain bike and running tracks that are available. Because the mill is also just a few kilometres from Rotorua’s CBD, many employees enjoy the convenience of a short commute to work.

Red Stag staff believe Rotorua is hard to beat as a lifestyle location with its many natural features and cultural history.

Opportunities
Further Opportunities - Production Forestry

Further opportunities exist to invest in both planted production forestry and timber processing in the Rotorua area.

Direct investments in processing include sawmills, roundwood treatment plants, panel and paper manufacturing, secondary processing such as kiln drying, machining, finger jointing, plywood manufacturing, waste disposal and by-product processing. Indirect investment opportunities also exist in activities such as chemical and packaging supply, and services in engineering, consulting, research and education.

Investment in research and development has resulted in new uses for wood products including bio-plastics and wood extracts or ‘green chemicals’, such as rosin, terpenes, lignin, xylose and cellulose. Currently, there are large volumes of waste wood from harvesting residues which could be utilised for bio-fuel production. There is also the potential for generation of high energy, palletised solid bio-fuel from wood residues, which could replace coal or gas in thermal power stations and boilers, and be used for domestic and industrial heating.

In addition to this, there is strong demand nationally and internationally for specialty timbers, particularly hardwoods, redwood and cypress from sustainably managed sources.

The New Zealand market for hardwood and cypress timbers remains significantly undersupplied and the gap has been filled by imported timber. Local processors of specialty timbers have had difficulty obtaining sufficient cypress logs to meet local demand. Market research also indicates a strong demand for cypress timber in the Pacific Rim nations, particularly East Asia.

Soils and climate in the Rotorua region suit most of these specialty species, and redwoods, cypress and a range of hardwood species have been successfully grown in the region. Considerable research in specialty species has been undertaken by Scion, and the New Zealand Farm Forestry Association has been active in promoting investment and providing technical information and assistance in growing specialty species. Rotorua has developed a forest industry investment case.

Growth Opportunity - Engineered Wood Products

Destination Rotorua are undertaking projects with ScionWaiariki Institute of Technology (WIT) and key consultancies to explore opportunities for an  applied engineered wood research centre and the prefabrication of panelised buildings.
The Wood Council of New Zealand identified four strategies that could potentially deliver an additional $6 billion in export earnings by 2022. These are:

  1. Processing more logs on-shore and adding value in NZ.
  2. Improving sawmill conversion efficiencies.
  3. Changing the current wood product mix so more higher-value engineered wood products (EWPs) were being produced.
  4. Investigating bio refinery type opportunities resulting in wood-derived biofuels and biomaterials that substitute for current oil-based options.

Destination Rotorua undertook work to identify opportunities for engineered wood products (EWP) in the Rotorua District. This work looked at international trends whereby the EWP sector for multi storey, medium density residential and low rise commercial buildings is growing at 25% per annum in Europe. This is largely being driven by the rising costs of buildings, heightened emphasis on earthquake resilience and speed of construction, modern manufacturing techniques (CAD/CAM) as well as the design and aesthetics potential for timber buildings.

Between ScionWaiariki Institute of Technology (WIT) and other local organisations in conjunction with Auckland and Canterbury Universities, Rotorua has access to extensive research and technical skills in the EWP area.

The opportunity exists for Rotorua to lead New Zealand in two areas - applied EWP research and prefabrication of panelised buildings.

Outcome Targeted
  • An Engineered Wood Product Centre of Applied Research
  • A prefabrication operation established in Rotorua
  • Export market opportunity for timber panelised construction
  • Potential joint venture partners, investors and strategic tier 1 customers.
Performance

Rotorua provides the most extensive range of forestry and timber processing training in New Zealand. The School of Forestry and Primary Industries is based at Waiariki Institute of Technology (WIT). In 2008, WIT opened the National Centre of Excellence for the Forest and Wood Industry (offsite campus) and has continued to invest in this site with a new Timber Industry Wood Manufacturing Centre, timber testing laboratory and gasification plant.

For almost 70 years, Scion has provided science and technology that underpins the highly productive forestry industry. Scion currently employs 300 science and support staff and has annual revenue of approximately $45 million.

Rotorua is also home to Future Forests Research Limited (FFR). FFR was established in late 2007 to fund, organise and disseminate forestry research for the benefit of the wider New Zealand forestry sector. The Radiata Pine Breeding Company (RPBC), whose shareholders include major forest growing companies in New Zealand and Australia, has been working to genetically improve radiata pine since the late 1980s. Solid Wood Innovation (SWI) is also a research consortium of approximately 26 companies that focus on research into improved solid wood processing.

Videos
1. Industry Overview

2. Scion

3. PF Olsen

4. Red Stag Timber

5. Lockwood

To find out more contact Destination Rotorua