OFFICIALLY OPEN RAYONIER MDF PLANT

MATAURA

Chairman and CEO of Rayonier Ron Gross, Vice President Charlie Margiotta, Managing Director Andy Wiltshire, General Manager Allan Croft, Your Excellency the American Ambassador Josiah Beeman, parliamentary colleagues, distinguished guests, ladies and gentlemen.

This venture is a welcome addition to the commercial infrastructure of Southland.

A multi-million dollar investment, state-of-the-art technology, and all built in just over a year.

I'd like to congratulate everyone who has played a part in this project.

It's testimony to the way we now do things here in New Zealand that the project came in well ahead of schedule.

It took teamwork to do it of course.

Teamwork made possible by the Employment Contracts Act.

So special congratulations to the construction staff. Well done.

I'm told that at one stage of this project you were pouring concrete in temperatures of up to minus 15 degrees celsius, 14 hours a day, for two weeks.

Even for hardy Southland types, that has to be hard going.

But clearly, it's that kind of drive and that kind of determination that so often lies behind a success story.

And, as you have made clear today - it's the sort of result you can expect from a good partnership.

These days, of course, you don't just look around your own community for partners.

The global economy has changed that completely.

It's entirely sensible, these days, to expect to find the right business partner half away across the world.

And when an investor can bring as many jobs and as much development scope to the forestry industry here as Rayonier has done, I think it's only fair to say:

"Your company is very welcome here".

The investment you have made and the endorsement you have given to our economic policy by that investment are very welcome indeed.

You know your business well - it's certainly not one for the faint-hearted.

As this plant demonstrates, you're in a business that requires you to make large-scale investment.

It also expects you to have the capacity to ride a market that can have highs and lows.

MDF is clearly a product with exciting potential, given its ability to create new markets.

I understand, for instance, that the market trebled in one year in Argentina, on the strength of the commissioning of a new plant.

That's reassuring, but I think it's even more reassuring that your plan is to aim for high quality to differentiate your product in the world market.

That means investing in state of the art technology.

It means research and development.

And it means looking for new ways to expand the market.

The establishment of this plant will help to diversify the economic base of the region and that has to be good news for everyone here in Southland.

Over one million cubic metres of logs harvested last year, and a forecast of over two million just five years from now.

That creates many opportunities for downstream processing.

This is the kind of opportunity that, well managed, can bring big and beneficial changes.

Processing logs in Southland creates extra jobs in Southland and so reduces the drift to northern regions.

I know it is a constant battle to create jobs in the region and you have to take full advantage of all opportunities.

In this regard I believe that your Focus Southland is an exciting initiative to put a positive focus on the region.

You have some powerful incentives to investigate every possible way to get as many people involved in as many ways as possible in downstream processing.

Working in partnership, I know you'll make the most of this opportunity.

In Wellington, of course, we've been learning a thing or two about partnership as well. And it's going very well.

Possibly, people who are watching us through the filter of the nightly news may have a slightly different picture of what's happening.

The fact is, though, we've found common ground on a wide spectrum of issues and the business of government is proceeding quite normally.

We set out a clear agenda in the Coalition Agreement.

We articulated a very clear view for the business environment we wanted to create, and you'll see that in the Budget when it's delivered tomorrow.

Whereas most countries set out their deficits New Zealand will set out its fifth surplus in a row, following decades of deficits by previous National and Labour Governments.

A Government's Budget is much more than a set of accounts, tabulating income and expenditure and setting out the Budget deficit or surplus.

Of greater importance than the accounts is the direction the Budget will set out for both economic and social policy.

We know that you have to have a strong economy if you're going to deliver strong social policy, and that will be apparent in the Budget.

All the fundamental factors that have helped business to grow in the last five years are still there: an open economy, low inflation, and a strong fiscal policy.

Under such an approach New Zealand has grown more in the last 17 quarters than it grew in the previous 62 quarters.

Such clear-cut benefits of an open economy are the way of the future.

One of our responsibilities as a Government is to seek to further reduce costs and unnecessary regulation at home while applying constant pressure on others to open up their markets.

This is important not just for timber product exports but for all of our exports, especially those from our major agricultural sectors.

In the lead up to tomorrow's Budget can I say to the commentators that if you really want to assess the health of the economy, look at the kind of investment decision that's been made in building this very valuable plant.

Global investors are pleased to be here - and they tell us so - because we have an economy that welcomes their contribution, and offers them a sound financial setting in which to do business.

Ultimately, it's over to business.

It's their own responsibility to make their own judgment calls on their own investments, as Rayonier have done here.

This investment by a major firm from the United States helps to create another positive link between New Zealand and the United States.

It encourages the Governments in both countries to work together on global trade issues so that all can benefit from the potential created by open trade policies.

And clearly there's potential yet to be harnessed here in Southland.

There are new jobs to be created, new businesses to be formed, new products to be developed, and new opportunities for the young people of Southland.

We are very pleased to see Rayonier take a lead, and I can promise that this Coalition Government will maintain the settings that made that investment possible.

We'll do that because it's the wise thing to do, and we'll do it because I aim to be back here to see you open more enterprises like this in Southland.

Thank you, and congratulations to you all.

Ends