Speech to launch book on history of MDFEconomic Development
Launch of "The Leading Edge"
12 September 2005
Rangiora Golf Club
Golf Links Rd
MDF has become a household word in New Zealand construction but it is only 30 years since the initial boards were produced at Sefton, in North Canterbury.
When the Canterbury Timber Products plant opened in March 1976, it was the first in the Southern Hemisphere, and one of only twelve worldwide.
That company was an early leader in new production techniques and products.
This spirit of innovation continues with the current generation of MDF manufacturers.
When the Sefton plant opened, it had a capacity of 60,000 cubic metres per year.
From this base, New Zealand’s MDF capacity has grown to over 900,000 cubic metres, spread across four sites from Mataura to Taupo.
The industry has grown and prospered as New Zealand producers are recognized internationally as quality manufacturers of MDF board.
The demand for New Zealand MDF rests not only on our manufacturing record but also on the use of radiata pine.
MDF made from New Zealand's radiata pine has the desirable attributes of light colour and a good surface.
Joiners and furniture manufacturers prize the light-coloured MDF made here because it is easier to apply synthetic overlays and veneers.
Our MDF is also known for its smoothness and very good machining properties.
The international demand for New Zealand MDF is reflected in the export figures.
Three quarters of our production is exported, and over the last three years export returns have averaged $266 million per year.
This is comparable with exports of venison and marginally less than the wine industry.
The recent purchase of the Rayonier plant by Dongwha Holdings, of Korea, is another sign of the international interest in New Zealand MDF.
Domestically, New Zealand consumers use MDF extensively.
Our per capita consumption is the highest in the world.
While celebrating the progress we have made to date, it is important to recognise that the international market for MDF is becoming increasingly competitive.
And our manufacturers must keep ahead of the game, in terms of product and technology development.
Global production capacity for MDF has increased 35 per cent in the past two years, from 34 million cubic metres to 46 million.
This growth has come particularly from China and South America.
Chinese capacity has trebled since 2001, and now makes up a third of world capacity.
Europe is a close second, followed by North America, South East Asia and South America.
In this equation, New Zealand has approximately 2 per cent of current capacity.
The challenge for New Zealand manufacturers is to maintain our distinctive branding, and for customers to recognise, and demand, MDF produced in this country.
The challenge for both industry and Government is to ensure that MDF production remains a key element of the New Zealand forestry scene in the years and decades to come.
Hopefully the publication we are celebrating today will be the first instalment in a series that tracks the successful growth of the New Zealand wood industry over time.
This growth will be based upon New Zealand’s maturing forest estate; having the right infrastructure in place; and companies knowing that there is a favourable investment climate for development.
Forecasts of wood availability indicate that there will be significant opportunities to expand current production, and to establish new wood processing facilities in regions such as Northland and the East Cape.
MDF occupies an important place in New Zealand forest management.
It is part of the "whole tree" solution because it is made from logs and wood chips that are not much use for anything other than to be reconstituted into paper or panel products.
Turning low value logs and chips into a high value product like MDF is truly "value-adding".
We need to do this in every industry.
As you will be aware, the Government has invested heavily in the transport infrastructure of Northland and Tairawhiti.
The goal of this investment has been to provide efficient and low cost access to the maturing forests in these regions.
With lower transport costs, the opportunities for MDF production are greatly enhanced.
The Government recognises that the MDF industry, along with the forestry sector as a whole, is facing increasingly stiff international competition, and constant pressure on margins.
Consequently, the Government has been working to reduce business compliance costs, provide additional certainty in electricity supply and address the blockages, and uncertainties, in the RMA process.
This work is continuing, and the Government has a strong commitment to ensuring a balanced investment environment.
New Zealand was a pioneer in MDF production, and we are still at the forefront of technology development.
This willingness to innovate and invest in new products will ensure that the MDF sector remains a cornerstone of the forestry industry.
It is important that we are regularly reminded of how New Zealand’s major industries were developed, as they provide valuable role models for future generations of scientists and investors.
And I hasten to add the role that government has to play.
Piers MacLaren reminds us in this book that Norman Kirk played a role in developing the wood processing industry in New Zealand
And I too am a very keen supporter of adding as much value here in New Zealand as possible.
This book is certainly a good example of how well New Zealanders can innovate and how partnership between businesses, community and government can genuinely benefit the country.
It is with great pleasure, that I launch Piers Maclaren’s history of MDF titled "The Leading Edge".