Demand for a commodity increases, while supply for that commodity simultaneously drops – that’s the recipe for an investment opportunity. And that’s exactly what’s happening for timber, all over the world. Demand is rising as the world’s population and GDP increase. And while most of the timber market is currently being met using timber from natural forests, that supply is diminishing due to exploitation, environmental concerns and economic pressures.
The alternative and sustainable solution? Plantation forests – the ideal source of high-quality timber. Currently supplying just 4% of the world’s timber requirements, plantations are a far better choice than old growth forests – which take between 60 and 300 years to grow to full maturity. Old growth forests are presently being felled at the level of around a football-sized area each second.
Soon global timber demands will be greater than the available supply. The population looks set to soar to 8 billion by 2020 – and the global timber market to grow to 5.95 billion m3 each year by the same date. That’s an additional 2.45 billion m3 in less than 25 years.
The best source of this in-demand commodity is New Zealand. Our nation’s unique climate means that Radiata pine grows here faster than anywhere else in the world. Though a native of California, Radiata thrives in this country’s conditions. First planted in 1850, Radiata has since become established as a major export earner for New Zealand. It is the backbone of the New Zealand forestry industry, which is forecast to help the nation dramatically grow its wealth over the next decade. Forestry is on-track to earn New Zealand $3.6 million in exports in 2020.
Supplies of North American softwood, and hardwood, are dwindling – and New Zealand Radiata is well-positioned to step into the breach. With the supplies from natural forests diminishing and demand steadily on the rise, prices are likely to increase. This represents an excellent potential for plantation-grown timber investment.
The market prospect for plantation-grown Radiata are also excellent; the process is efficient and speedy – Radiata grown in New Zealand matures in as little as 25 to 30 years. New Zealand has also invested considerable research in plantation forestry, becoming a world-leader in the industry. Our forest management and tending practices in New Zealand are second-to-none, and our processing technology and genetic improvements are world class.
With the local skill-level at Radiata growth improving all the time, the New Zealand forestry expertise – in knowledge, skills and technology – mean that growers and investors here are at an advantage over other nations.
Investors, both locally and internationally, can protect their capital by choosing New Zealand forestry, and gain significant returns.
As a renewable resource, New Zealand plantation-grown wood is ideal for both export and domestic consumption. This allows remaining natural local forests to be protected and enjoyed for generations to come. The nation’s Resource Management Act is used as a framework for protecting local soil and water values – while also providing a balance for socio-economic, environmental and commercial values. This allows us to use eco-labelling on our timber, and environmental management certification, giving our customers peace of mind.
New Zealand's Advantage
In New Zealand, plantation forestry is well-established. Research and development is constantly occurring, and to date Radiata pine has show itself to be superior in the following ways:
Superior speed of growth;
Effective and high-quality breeding of trees;
Efficiency of plantation management.
Ease of use
Radiata pine is an adaptable and resourceful softwood. Its low cost of production makes it both cost-effective and versatile.
With its non-intervention, supportive government policies, a skilled labour force, excellent forest growth rates, and well-developed infrastructure, there’s no better place to invest in forestry.