Wood processors lobby government for help against subsidised foreign rivals

The Wood Processors & Manufacturers Association of New Zealand continues to lobby the government for more a more favourable trading environment as processors such as Juken New Zealand eye drastic measures in the face of subsidised foreign competition.

This week Juken NZ, a unit of Japan's WoodOne Ltd, put forward a plan to halve the Gisborne wood-processing mill workforce as it struggles in a highly competitive market, and as overseas buyers are buying a record volume of logs.

WPMA chief executive Jon Tanner said any closure or diminution of a wood processing company is a great loss to the regions.

While Juken is facing some specific challenges in the Japanese market, the "company's plywood is also increasingly unable to compete in the domestic and international markets against product out of large-scale wood processing plants from the likes of China and South America," said Juken general manager Dave Hilliard.

Other wood exporting countries such as Canada and Russia support their local industries while Chinese wood manufacturers benefit from subsidies, creating an uneven playing field for New Zealand processors, according to the WPMA, which would like to see the government take a complaint to the World Trade Organisation.

Tanner said Juken is not alone: "We are certainly getting a consistent message from our membership that they are being squeezed and squeezed hard. It's getting harder."

Against that backdrop "we are maintaining the line with the ministers that we do need to create a fairer playing field for manufacturers in New Zealand and that means tackling international subsidies that are paid to our competitors," he said.

According to Tanner, "we are seeing rising prices in raw materials going offshore and we believe, and have written to senior ministers, that is being underpinned by WTO-prohibited subsidies overseas."

So far, Regional Economic Development Minister Shane Jones has been supportive, Tanner said. "The consistent message he has given us before and after the election is that he will not see local businesses suffer because of these conditions," he said.

Tanner underscored that New Zealand has the opportunity to "push for change," in particular as it signs up to the renamed Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which includes major log exporter Canada. "Under that, we really have to push strongly to make it a fairer world for New Zealand manufacturers," he said.

He lauded the new government's efforts so far, in particular plans to bring forestry cutting rights into the Overseas Investment screening regime.

"They are simply trying to take steps to level that playing field internationally," he said.

A Treasury spokesman confirmed Treasury has taken the approach of targeted consultation on bringing forestry cutting rights under the OIO and is seeking submissions.

(BusinessDesk)