9 Oct 2014

Forestry and dairy collaboration urged

2:05 pm on 9 October 2014

The Crown forestry research institute Scion is urging closer collaboration between the forestry industry and the dairy sector to overcome the impact of the high dollar.

Speaking after the publication of its annual report, Scion chief executive Warren Parker said a tough exchange rate for the export market has made life very difficult.

He said industries need to look at a more collaborative approach to find ways to work around it:

"Last year they had a very strong growth in log exports into China and returns to forest growers were high but it obviously put a lot of pressure on our solid wood processors due to the high import prices. Fortunately domestic housing consents have been strong and the US market has been recovering and also we're seeing some development in Australia.

"A lower dollar would be beneficial to our industry. I think the other thing for us is that we recognise that New Zealand needs to have a more diversified economy so the dairy industry is great, but the real opportunity now is to find ways for the dairy industry and the forest industry to exploit their complementarity.

"Whether it be in the environmental area, in the energy area, in the renewable packaging area. So I think that's an unexploited opportunity for New Zealand's stronger economic growth, stronger environmental performance, and a stronger response to climate change," he said.

Warren Parker said Scion made a a profit of just under $3 million last year and a pre-investment return on equity at just over 11 percent.