Farm Forestry New Zealand

Establishing an industry group for New Zealand's small-scale sawmilling sector

Paul Millen and Harriet Palmer, New Zealand Tree Grower February 2021.

Small-scale sawmilling alternative and native timbers is  already an important small business activity operating throughout New Zealand. The industry is characterised by highly skilled, energetic practitioners who are adept and innovative in engineering and technology and who have a passion for wood. Small-scale sawmilling businesses are either fully mobile or operate from a permanent base.

Fully mobile mills are brought to the farm or forest for those who have trees they want to mill into timber for their own use or for sale to others. The others operate at a permanent site but use a portable sawmill due to the low capital cost and diversity of timbers which can be sawn. These businesses have their own log supply or buy logs from growers to mill and market the timber themselves. They may also undertake further processing and marketing. Some also offer tree-felling and arboricultural services.

A recent report estimates that, since the 1980s, around 1,100 portable sawmills have been sold in New Zealand and that the small-scale sawmilling sector could already be producing sawn timber valued at $85 million a year. In comparison, in 2017 the value of timber imported into New Zealand was $112 million.

Data for locally grown milled alternative timbers are all estimates as there is no monitoring of the sector, a lack of industry standards and grades for alternative timbers, and no generic trademarks or marketing.

The alternative timber value chain

Forests and woodlots growing alternative timber species have been planted by forestry companies and farm foresters throughout New Zealand and are most commonly grown on a small scale, from a few trees to tens of hectares. Where trees are accessible and have had suitable tending, these forests have the potential to be converted into high-grade specialty timber.

The main timber is produced from plantations of cypress, redwoods and eucalypts, but there are many others including poplars, cedars, blackwood and other mainly European and North American species.

Significantly, the timber from these alternative species can be used in a wide range of speciality applications and therefore have the potential to displace some of the high-value imported hardwood and softwood timbers. The small-scale sawmilling industry is the major link for getting New Zealand grown alternative timbers to market, because small plantations of species other than radiata pine or Douglas-fir are of limited interest to large-scale companies.

The alternative timber forest resource

An estimated 67,000 hectares of alternative timber plantations are growing in New Zealand. Much of this is semi-mature so there is the opportunity for an increasing volume of alternative timber to be harvested, processed and sold over the next few decades. One way to ensure this opportunity is taken up is for people in the small-scale sawmilling sector to work together. This will strengthen links with others in the value chain such as the forest growers, timber merchants and retailers and increase the sale of locally grown timbers into the domestic market.

At present, New Zealand’s alternative timber value chain is fragmented. Most small-scale sawmill businesses work with little or no collaboration between themselves or with other sectors. While this offers much-valued independence for some businesses, it also means that the individual businesses and the sector as a whole may be operating well below its full potential.

Currently the supply of New Zealand grown timbers into markets is sporadic and cannot be guaranteed. There is a lack of industry standards, meaning those specifying or using high value timbers such as architects, builders and joiners often find it easier to default to imported products via merchants who offer a steady supply. Without recognised chain of custody certification and branding, finding a route into high-value markets for locally-grown alternative timber can be very difficult.

No industry group

Unlike many other occupations, there is no industry training or career pathway for small-scale sawmillers.  Hard-earned skills and professionalism can therefore never be properly recognised and rewarded, unlike for example, a Master Builder. In this environment there is no apprenticeship scheme and no recognised avenue to find support or expertise when problems are encountered.

For growers, with no central industry body promoting approved small-scale sawmillers, finding a local sawmiller can be very difficult, let alone being able to identify one who is a skilled operator. The risk is that tree growers hire a cowboy who mills their trees badly, or they may simply give up, resulting in their supposedly high-value trees being sold as log exports or to the local firewood merchant. This acts as a deterrent to others thinking of planting or milling alternative species.

In the absence of an industry group focused on marketing locally grown exotic timbers and sustainably harvested native timber, the NZFFA encouraged the establishment of the Farm Forestry Timbers Society in 2015 This is a ‘not-for-profit incorporated society and industry body for promoting and facilitating distribution of locally grown specialty timbers in New Zealand.’ One of the main functions is to provide information about many of the alternative timbers which has been grown in New Zealand. Information on sawmilling is also available. A virtual marketplace operates on the NZFFA website where members can offer their timber for sale and portable sawmilling and other timber processing services.

Much of the work already done by Farm Forestry Timbers can provide a foundation for a new industry group or association. One role of the proposed association is envisaged to be lobbying for changes to the NZ Building Code to permit the wider use of alternative timbers, a task that until recently has been undertaken solely by the NZFFA.

What an association could do

An industry association would aim to bring together all of those involved in the alternative timbers value chain and become a common voice for those working in the sector. The association could develop a strategy to work on, including any or all of the following −

• Developing a New Zealand-wide network of professional small-scale sawmilling businesses, supported by a website, promotion and marketing
• Developing branding and collaborative marketing
• Providing support around health and safety and employment responsibilities
• Introducing chain of custody certification and approved sawmiller schemes
• Developing and promoting alternative species grading and standards
• Attracting new entrants by developing career opportunities based on formal education and training pathways
• Introducing practitioner events, training and annual awards
• Research and product development.

It is envisaged that the activities of a new industry association would initially be centred on small-scale sawmilling businesses. However, membership and participation could extend to timber merchants and end users such as joiners, builders, furniture makers, boat builders and craftspeople.

Asking the sector what they want

In August 2020 a survey of the small-scale sawmilling sector was carried out. The survey targeted sawmillers and people employing sawmilling contractors. The main aim was to establish whether those working in the sector would be motivated to begin the process of establishing an industry association, but the survey provided an opportunity to gather some useful extra information.

The survey, along with a discussion document, was publicised widely −

• Direct emailing to our own list of sawmilling contacts
• Via the Mahoe and Peterson websites and newsletters
• Via a media release with links to the survey and discussion document
• Through the Ministry for Primary Industries and Te Uru Rakau indigenous forestry section newsletter, which was distributed to all 140 sawmillers with a licence to mill indigenous timber
• On a Facebook group of small-scale sawmillers.

Links to the survey and discussion document were also available on the Forest Growers Research website.

Responses to the survey

A total of 75 valid responses were received demonstrating quite a high level of interest. The questionnaire was designed to provide information about the sector which is generally lacking.  For example, we asked about who is operating portable and mobile mills, the size and scope of their operations, how they currently publicise their services and products, the problems they encounter and their suggestions for potential solutions. The information generated will provide a valuable resource to guide the strategy of an industry association, should this eventuate.

Responses came from throughout New Zealand.  Over half the sawmillers who responded have a commercial element to their operations. Seven responses came from relatively large businesses with three or more employees, and an additional nine were fulltime operators with one or two people working in the business. The largest group of respondents were parttime commercial operators and several of these operators commented that they are hoping to increase their business. The sector is strongly male-dominated, and almost half the respondents were over the age of 65.

Levels of satisfaction, problems and solutions

We asked how satisfied or dissatisfied people are with the industry. Only a small proportion of respondents are actively dissatisfied with the industry, the majority are either neutral or satisfied, suggesting that they will continue operating everything else being equal.

Respondents were asked to identify the top three problems they encounter in their sawmilling activities and their top three solutions. In both cases, several recurring concerns cropped up so responses could be divided into broad categories. The categories of problems and solutions were slightly different:

Main categories of problems ranked from most to least mentions	Main categories of solutions ranked from most to least mentions
People-related	Collaboration
Technical	Promotion and marketing
Markets and marketing	Compliance, grading and standards
Log supply	Education, training and certification
Financial	Technical

We also asked how sawmillers publicise their services.  A total of 64 per cent said they only use word of mouth which confirms the status of this industry sector as one which largely operates under the radar.

When respondents were asked about areas where they would specifically like support and where an industry association could assist, the top six areas identified were −

Wood first policies from national and regional authorities	74 per cent
Industry collaboration and coordination	69 per cent
Increased domestic manufacturing	51 per cent
Training	46 per cent
Branding and marketing campaigns	44 per cent
Long-term log supply contracts suited to small-scale sawmillers	39 per cent

In theory, all these could be addressed by a well resourced industry group. The responses give encouragement for continuing with this project.

Support for an industry group

In response to the question ‘Would you be interested in joining an industry association for small-scale sawmillers?’ 86 per cent answered yes. Many additional comments were received related to this question.

Some qualified their answer with an ‘it depends’, but the majority were supportive of the idea. Examples of comments from people who answered yes include −

• I think it is long overdue
• To connect with others, to share resources and connections
• To learn from and exchange insights with others
• To improve marketing opportunities, increase income, and share ideas and learn more from fellow sawmillers.

One survey participant commented −
This industry is waiting for an opportunity to become larger scale. New Zealand needs more sustainable housing, built using untreated wood, and farming using untreated timber. A strong coordinated group can do this and will create employment and keep New Zealand heading towards healthy choices for ourselves and the environment.

The next steps

Overall, we believe the results of the survey demonstrate a good level of interest and support for establishing an industry group or association for the small-scale sawmilling sector. With sufficient resources and support, in the short-term a new association could focus on some quick wins amongst the problem areas identified in the survey, as well as putting some longer-term development plans in place. Priority work areas would be decided by a proposed new project steering group.

The plan now is for a workshop to be convened and survey participants to be invited. Representatives of the government and the forest industry will also be invited. The aim of the workshop will be to identify a framework and timetable for the next stage of work, select members to form a project steering group from within the sector who are prepared to lead the next stage of the project, and identify what level of cash investment could be raised to gain government support for the next stage.

The work to date has been funded by the Specialty Wood Products Research Partnership but there will be limited funding available from this source from now on.  This initiative has evolved into an industry development project which needs to be led by the industry. The role of the working group from here is likely to be to suggest a framework for a way forward. The workshop will determine whether there is a small group of people within the sector who are prepared to lead the initiative from now on and look for alternative sources of funding.

This project is supported by a working group − Peter Berg, Specialty Wood Products Chairman, NZFFA Executive, Tanes Tree Trust; Gabrielle Walton, Summerhills Timbers, Tauranga; Richard Thompson, MacBlack Timber Ltd, Whanganui; Vaughan Kearns, Ruapehu Sawmills, Raetihi; Justin Wells, Logs2Lumber, Nelson; Angus Gordon, NZFFA Executive and Forest Research Committee; Marco Lausberg, Manager, Specialty Wood Products Research Partnership; James Powrie, forestry project manager, Napier. The work has been funded by the Specialty Wood Products Research Partnership which is part of Forest Growers Research and receives funding from MBIE, the Forest Growers Levy Trust and industry partners.

Paul Millen is Project Manager, NZ Dryland Forests Initiative.

Harriet Palmer is an independent forest communications specialist.