Post from Dean Satchell on November 26, 2016 at 1:06pm
Tawa timber An updated perspective on opportunities and issues
Rob Allen and Brenda Tahi
From Indigena, November 2016
In his 1994 book titled New Zealand Timbers Norm Clifton concluded that the ‘writing is on the wall’ for tawa timber. Certainly the use of tawa timber has declined ever since this valuable book was produced. At the same time there has been a marked increase in the importation of special purpose timber products into New Zealand. As a result, it is worth periodically asking if there is a wealth-creation opportunity with the sustainable management of privately-owned indigenous forests. An industry based on this resource could satisfy demand for high-value timber products and provide revenue to forest owners.
In response, the Ministry for Primary Industries’ Sustainable Farming Fund supported a Tuhoe Tuawhenua Trust led project ‘Expanding economic viability for sustainable managed tawa forests’.
This project has four smaller projects, the first three of which have been completed −
- Summarise the properties and past and present uses of tawa timber
- Identify where the tawa resource is located, who owns it, and its availability
- Review opportunities and problems faced by tawa timber in the market place
- Develop a strategy to increase the value of, and demand for, tawa timber products
This article summarises the findings of the third project around opportunities and concerns for tawa timber and was derived from interviews with industry representatives, searches of using the internet and assessment of relevant literature. It considers activities along the whole value chain.
Of New Zealand’s hardwood species, southern beech and tawa have a timber resource of sufficient size to support moderate sized industries. The total tawa-dominated forest area available under stringent practical constraints is around 100,000 hectares, with a potential tawa timber production of around 14,000 cubic metres each year, although very little is currently being harvested.
Tawa has always been a speciality timber, but never produced in great volume. The specific uses have changed over time. Long bird spears were manufactured by Maori in pre-European times because of the distinctive property of tawa that allows it to split into long, straight shafts of timber. Butter churns were produced in colonial times – partly because of the odourless property of tawa timber. Subsequently the timber was used for flooring, turned handles and furniture. By the 1990s the predominant use was for short-fibre pulp for fine paper.
The potential scale of tawa timber production is often considered too small for export markets because the distribution networks of overseas retailers is usually too large. The export opportunity is then for distinctive products being sold into selective markets. For example, swamp kauri is marketed as the oldest workable wood in the world with a relatively small amount left.
Tawa timber does have distinctive properties. It is odourless, excellent turning across the grain, splits straight, flecking in the grain that gives a 3D figure and with black fungal streaking in light coloured timber. Yet unique export opportunities have not emerged. Although odourless and tasteless, timbers have long found a place in food storage and packaging suggesting high-value, nature orientated food products. Timbers with such properties have been used elsewhere in markets for baby orientated products such as cots.
The domestic market opportunities are currently viewed as more appropriate. Industry representatives suggest products orientate around a more strategic approach to competing with existing imports in the domestic market. Examples included −
- There is a demand for wide-board flooring but it is argued by flooring specialists that this needs new technology. Currently, light coloured oak is imported for wide-board flooring and boards can be greater than 170 mm wide. A question is whether you can produce wide boards from tawa timber?
- There is an opportunity for increased tawa veneer for use in interior panels and furniture. This is in demand because solid timber is too expensive for some uses but can be viable when used in combination with veneer. A challenge is obtaining trees of good enough quality to support an enlarged industry.
- Solid timber bench tops which have finishes that are both attractive and serviceable.
Markets and demand
The global and domestic need for hardwood timber has increased since the Global Financial Crisis in 2008. For example, the value of global furniture production was estimated at $480 billion in 2014, an increase of almost 10 per cent over 2013. Domestic consumption of imported timber has also grown dramatically. The total value of solid timber imports increased from $284 million to $532 million between 2003 and 2013. It is the value of imported furniture and parts which is responsible for this growth.
Lower prices for some imported timbers from the northern hemisphere appear to be partly the result of scale which New Zealand industries will find difficult to achieve. However, several factors support an upward pressure on the price of imported timber.
- International trade agreements such as the Trans-Pacific Partnership will attempt to open up trade. One intent is to tackle trade-related environmental concerns, such as illegal logging, by demanding legal and regulatory requirements within countries.
- Financial investors hold an increasing share of the world’s industrial timber supply as part of a diverse investment portfolio. These investors expect high returns from forests and will reduce the level of harvest in weak markets.
- Global uncertainty, low export prices and a low outlook for domestic interest rates mean that the New Zealand dollar is assumed to depreciate further. Already some light coloured oak timber users have experienced a 40 per cent increase in price over the last two years.
- Increased demand may reduce the nett exporter position. Supply will be less assured and create the opportunity for domestic sources.
Today, tawa is a lesser-known timber species and requires promotion. Creating a market opportunity for tawa timber could be around developing a rich story behind any products. Current opportunities based upon intrinsic properties of the timber itself and a wider set of extrinsic values are −
- There is a trend toward lighter coloured woods like tawa
- A unique sustainability case could sometimes be argued. For example, where podocarps have been logged from a forest, which in turn promoted tawa, then harvesting tawa could provide a rich story about restoring podocarp regeneration in forests.
- Develop use of timber ‘to help humanise’ new large-scale building complexes.
- Special projects that exhibit natural or cultural values.
Production requires a consistent supply of quality logs and timber from a sustainable resource. Problems in achieving this include –
- A poor knowledge of several resource problems has important effects on viability. There are opportunities to use an increased understanding of the natural variability in log quality, productivity and wood properties of existing stands. This has strong implications for harvest networks.
- A delay in supply was a common negative comment about tawa timber. The New Zealand Farm Forestry Association’s Specialty Timber Market is a positive move in the direction of a collective approach.
- The light heartwood and the sapwood are liable to attack by Anobium and Lyctus wood borers, and although these can be treated, such treatment cost money.
- One of the challenges is in treating sap stain. Milling the timber in winter, when the sugar content of the wood is low, along with rapid kiln drying can overcome this problem but winter harvesting can be damaging to the soil.
- A positive trajectory for tawa timber products is also constrained by infrastructure.
Producing engineered boards from tawa, which are wide and stable, is challenging. The technology is cheaply available elsewhere but not possible under existing legislation for tawa. Nevertheless, suitably designed and tested engineered floor board could overcome the width and stability problems for tawa timber. Engineered products use glues which may not meet some sustainability requirements.
It is likely that wide boards and light timber may not remain in vogue in the longer term. Staining tawa timber needs further testing and offers an opportunity to broaden the market and also allows the timber to find a home in successive fashions.
Placing tawa in the market place not based upon distinctive properties has risks. This is because low-cost manufacturers may copy a product and usurp the market. This supports the case to pursue an iconic New Zealand component.
Markets and demand
It is important to resolve the appropriate business model to meet market demands. There are several options to consider −
- Innovative products can be made in a range of scales, with the demand and price for scarcity offsetting the advantages of economies of scale
- Co-operatives to ensure continuity of timber supply to customers
- Production of various commodities such as honey and wood driven by demand, and only harvest timber when the price is right.
- Government supported development at various scales in which indigenous forestry would benefit from long-term strategic support from the government.
Whatever the business model, enterprises need to decide how widely to operate along the value-chain and how to integrate this with other enterprises. Industry representatives suggested that an enterprise with a forest resource should maximise how widely it operates, providing that it is to a good quality. To decide on positioning, it is important to know the demand and price and how elastic prices are to changes in volume of anticipated timber.
Because it is proving difficult to competitively place existing tawa timber in the market place, we need to understand the cost of production and how this might then be contained. Industry representatives suggested the reasons for the high costs of production include −
- Costs of compliance with legislative, regulatory and certification requirements for indigenous forestry being more stringent than other forms of forestry in New Zealand.
- Small scale and fragmentation with an increased number of operators, and level of production which could benefit consistency and flexibility of supply
- Efficiency along the value-chain. There are many factors that affect efficiency and includes strategically thinking about resource size, quality and distribution.
There remains a negative perception of indigenous forestry in New Zealand. However, we import a large volume of indigenous timber from elsewhere. New Zealanders appear happy to use imported timber with little thought to the source. There is an opportunity to highlight this transfer and the strength of New Zealand environmental requirements. There is a need to increase familiarity with tawa timber including −
- Architects, designers and builders may feel compelled to use tawa if they have a stronger appreciation of properties and limitations
- There is an opportunity to brand tawa timber for certain markets
- There needs to be a rich story around tawa timber whether it is promoted as new, high value or for more traditional uses
Currently tawa timber products are virtually absent from the marketplace. Developing a market position for them now requires a rebuilding of consumer familiarity and confidence in the timber and the way it is produced. This involves, and integrates, all components of the value-chain. As a result, probably the greatest immediate progress could be made by developing an initiative which uses quality tawa timber, for example in flooring and veneer panels, for an iconic building project to showcase the timber.