Forest co-op plan reignites election debate over New Zealand asset ownership

Plans by a forestry cooperative to harvest a "wall of wood" have sparked fresh fears in the run-up to next month's election that New Zealand's productive assets are being taken over by foreign interests.

United Forestry Group has announced plans to help harvest and market wood from about 14,000 small New Zealand forestry plantations valued at 30 billion NZ dollars (24.24 billion U.S. dollars) over the next two decades.

The high harvesting and transport costs faced by the owners of single small forests, and their weak negotiating position with buyers, meant the potential value of the forests may not be achieved and the final return to their owners and to New Zealand may be disappointing, the company said in a statement.

Its aim was to consolidate the output of a number of forests in an area to effectively create one large, competitive forest which can be harvested sustainably over time and would effect savings in harvesting, transport and marketing, while offering the forest owners the opportunity to become shareholders.

A cornerstone investor in the new company is Superpen, a joint venture between Australian international timber marketer Pentarch and Chinese conglomerate Xiangyu Group.

United Forestry Group director Malcolm McComb said in a statement that some small forests were not being harvested because of the costs and the owners should look to a cooperative like those serving dairy, sheep and beef farmers.

"We will have the financial strength, expertise and presence in the local and Asian markets to offer them a much more comprehensive range of options," said McComb.

However, the opposition Green Party said Friday that while a cooperative to market New Zealand forest products was welcome, simply exporting more unprocessed logs would be another step towards New Zealand being a low-value commodity producer with ownership in foreign hands.

"Already the vast majority of the logs leaving New Zealand are foreign owned as are all our major wood processors," Green Party forestry spokesperson Steffan Browning said in a statement.

"This is not a smart way to run our economy. Rather than sending increasing volumes of low value-added raw logs overseas, we should be processing the logs into finished products such as structural timber."

Forestry is New Zealand's third largest export earner after dairy and meat, with total forestry exports worth 4.27 billion NZ dollars (3.59 billion U.S. dollars).