Effects on Production and International Competitiveness
How Will Transport Effect the Production of Wood Pulp in the Next 55 Years?
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Input Costs.
As the price of fuel continues its trend of going up, the cost of transport continues to grow. This effects both the transport of the input material being the felled logs, and the output product being the wood pulp itself. It is predicted that the price of crude oil (which petrol and diesel are made from that are the main types of fuel for vehicles) will steadily increase over at least the next 10 years as oil fields become harder to find and access. This means that the transport costs will increase. Another factor is the type of transport used. Due to the poor rail infrastructure in New Zealand, the use of rail in the transport of the logs is limited. That means that trucks are used extensively putting strain on road conditions and congestion. This could lead to increased traveling times reducing productivity.
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Output Costs.
Because of New Zealand’s remote location in relation to the rest of the world, transport costs are likely to become a significant factor for us to stay competitive on the international market.
The type of transport could also contribute to the environmental factor and how badly it impacts the environment.
Written by: Conrad Williams
How Will External Markets Effect the Ability of New Zealand to Competitively Produce Wood Pulp Internationally Over the Next 55 Years?
At the moment, New Zealand mostly produces soft wood pulp with a small amount of hard wood pulp. Radiata pine is the main wood used to make wood pulp in New Zealand due to its quick growing characteristics, and is a soft wood. But other markets may eventually be able to undercut us. In Brazil, the production of hard wood pulp has been steadily increasing due to new cultivation techniques of eucalyptus (gum) in recent times. This poses a serious threat to New Zealand being competitive on the international market.