2017 International Forest Industries Magazines June July 2017 | Page 26
LUMBER PROCESSING NEWS
Rayonier bullish on NZ forestry
Rayonier Inc. is “bullish” about and
“encouraged” by its New Zealand
operation, which had “all the
planets kind of lined up last year,
and we’re seeing more of the same
this year,” said CEO David Nunes.
Speaking with analysts during
a financial conference call earlier
this month, Nunes said Rayonier
had always been “fairly bullish on
New Zealand just based in part on
the underlying productivity of the
lands and the access to markets.”
During 2016, a number of factors
contributed to that bullishness.
“I think the one area that
perhaps if you want to put it into
the bucket of surprises was the
effectiveness of the reduction
in domestic harvest in China.
This has been something that’s
been attempted before. It’s been
widely reported that there was
over-harvesting for a long period
of time. And so, it was really the
effectiveness of that domestic
harvest ban and the impact then
that had on the market. And I think
that catalysed the market to some
degree last year,” said Nunes.
On top of that, the New Zealand
market was very strong, especially
the Auckland market, which Nunes
said “is one of the fastest-growing
markets” in the region. “And so,
we’re seeing very strong domestic
demand.” The New Zealand
domestic market has taken market
share from the export market, and
Rayonier is now at about a 55% to
45% mix of domestic to export, he
added.
“And then you also have a
strong and growing market in India.
So, you had all of those market
factors that were taking place at
the same time, while you also had
low oil prices and an abundance of
ships that kept shipping rates low.
And then we had strong currency
on top of it. So, you really had all
the planets kind of lined up last
year, and we’re seeing more of the
same this year. We’ve seen some
20 International Forest Industries | JUNE / JULY 2017
increase in shipping rates. But
generally, we remain pretty bullish
and pretty encouraged by what
we’re seeing out of New Zealand
this year.”
In New Zealand, Rayonier
employs more than 90 forestry and
business professionals as well as
700 contractors throughout the
country, and harvests more than 2
million cubic meters of timber per
year, sold into the domestic market
and exported into Asia with China,
Korea and India being important
markets, the company’s New
Zealand website states.
Matariki Forests, managed
by Rayonier New Zealand, is the
third largest forestry company in
New Zealand, with some 130,000
hectares of plantations across
the country, according to the
website, and Rayonier increased its
ownership of the Matariki JV