Power Equipment Australasia

OPINION In all this, it is key to understand that timber comes from two sources. Plantations where rows of trees are grown in what is essentially a farm. The plantation “farmer” needs to buy or lease the land, plant, maintain the crop and be patient. Very patient. Ten to sixty years. All this comes at considerable cost. Timber harvesters are more interested in getting their hands on timber they didn’t grow. Native, old growth forests, and it is these forests that need protection. FOREST AND WOOD PRODUCTS IN THE AUSTRALIAN ECONOMY The forest and wood products industry contributes approximately $10 billion, constituting 0.5% of the Australian economy. Logging operations yield around 35 million m³ of logs annually, valued at roughly $5 billion, while downstream wood product manufacturing generates approximately $25 billion in sales, supporting over 52,000 jobs. Australia, though a minor player in log production compared to countries like the United States and Canada, stands as a significant exporter of woodchips. However, the nation imports processed wood products, highlighting a gap in value-added production. We are exporting mostly to China (logs and woodchip) and woodchips to Japan. Australia imports processed wood products from China, the United States, Indonesia, and Malaysia. Indonesia dominates the international plywood segment and despite local plywood and composite wood factories, Australia still imports most of our plywood requirements. As with so many other Australian industry sectors, we do not do enough value added. Yet again, we are an exporter of raw materials, let the jobs go overseas and pay a premium for finished goods. Australia’s reliance on exporting raw materials of importing finished goods, missing out of the value added seems to be here to stay. COVID-19 and the resulting shortages, combined with the trade war with China prompted governments to encourage onshore manufacturing, but I fear that policy has run out of steam. Relationships with China are still on a knife edge, and we will be in dire straits when Australia becomes collateral damage when the China/Taiwan/USA struggle heats up. We have the woodchips, but we cannot make enough paper if a trade war or a hot war cuts us off. STRATEGIC ISSUES FACED BY THE FOREST AND WOOD PRODUCTS SECTOR Forestry and logging firms have faced challenging demand conditions. Forestry and logging firms confront demand challenges amid stagnant prices, particularly exacerbated by disruptions caused by the Covid pandemic. MARCH - APRIL 2024 | POWER EQUIPMENT AUSTRALASIA | 15

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