Competiton
Competition Globally:
The forestry and wood processing industry is the 3rd largest export industry of New Zealand (MPI report 2015) and is amongst the top 20 global suppliers of paper and forestry products (The New Zealand Paper Forum, 2008). It was predicted that New Zealand would be among the top 5 global suppliers (Forestry Insights, 2005) but in 2011 New Zealand was not yet ranked amongst the top 10 of countries by production quantity, China is listed as the country that produces the greatest quantity of paper (Table 1) but is also New Zealand’s 2nd top market for paper exports (MPI report, 2015). If China continues to produce great quantities of paper or even increase production they may stop buy exports from New Zealand lowering New Zealand’s GDP gain from paper and paperboard exports. New Zealand is also not ranked with the top 10 for net sales (Table 2) showing in the future New Zealand need to continue exporting paper and paperboard to countries that are high ranking producers and sellers to achieve this prediction.
Supply/Demand:
Worldwide 40% of industrial wood harvest is for paper production and it is estimated that 8-10% of wood production globally has been illegally logged (Which paper, 2010). The fact that people are illegally logging to supply paper production shows that the supply of trees for making paper is not enough for the demand currently. In 2070 there may not be enough trees for the New Zealand to continue using them for the production of paper and paperboard as trees may be need for things that are considered more important than paper and paperboard.
To increase the supply of trees so they can go to other contracts as well paper production companies try to claim more land but it has been estimated that 800 million people around the world use forests as their homes creating many conflicts over world land rights, culture, human health and livelihoods (Which paper, 2010). This could effect New Zealands industry if land that could hold large plantations of trees is own by a marai or other group there will be a dispute.
The demand for paper in its current use is dwindling with more advances in technology. For 2010 the world’s demand for paper showed a “paltry” (Rod Young, 2013) growth rate but the demand for paper packaging is continuously increasing only being limited by general economy (Another disappointing year for world paper demand in 2013, 2013). So by 2070 paper may not be used for all its current uses like books or printing but instead just packaging like the new paperfoam which is an alternative to plastic packaging that has similar mechanical properties, but can be recycled with normal paper and is biodegradable (PaperFoam, 2015).
Table 1 List of main countries by production quantity
Table 2 List by net sales
Note: Tables retrieved from Wikipedia. Pulp and paper industry. (2015)
Exports:
Most wood products are made from radiata pine as it is fast growing, versatile timber (Radiata Pine, 2007) but in 2015 the New Zealand government awarded Future Forests Research (FFR) funding to create high value specialty wood products from wood other than radiata pine (FFR, 2015). Radiata pine is not well suited to higher value applications (FFR, 2015) so in the future New Zealand may not be able to continue to earning a high amount of money from its forestry and wood exports as It may be unable to compete with other exporters that can afford higher quality trees that make better products.This shows that the New Zealand government and industry are working hard together to ensure high wood exports.