Farm Forestry New ZealandCollective blackwood marketing
Malcolm Mackenzie, New Zealand Tree Grower November 2013.
I am keen to respond to the excellent ‘From the Patron’ in the August Tree Grower and hopefully stimulate a wide-ranging discussion among fellow members. I agree with Wink Sutton and Allan Laurie that there is a very good case for collective marketing of blackwood timber, far better than for radiata pine. However, I have some strong opinions as to how this could best be achieved.
The main markets for blackwood are in the furniture, joinery and flooring industries. There has been a significant contraction in the New Zealand furniture industry in recent years as it struggles to compete with large scale Asian producers. Everwood of Mount Maunganui was once a significant producer of furniture using locally grown blackwood, but under new ownership it prefers to use imported American oak. Oak is available at less than half of the cost of blackwood timber.
There hopefully will always be a small-scale furniture industry locally producing high quality custom-built items, but I suspect the joinery and flooring markets will be larger buyers of our blackwood timber. My reading of these industries is that they tend to be based around smaller localised businesses. They do not want to carry large inventories of timber and prefer to buy ready-to-use timber at short notice from merchants. As a result they pay high prices using the merchants’ price lists.
Good prices
A quick look at a representative merchant price list shows imported Australian blackwood select clear grade, kiln dried and rough sawn, ranging from just over $3,000 to just under $8,000 a cubic metre.The lower end is for lots over a cubic metre and small dimension of 100 mm by 25 mm. The highest price is for small volumes of less than a quarter of a cubic metre and larger dimension of 150 mm by 50 mm. To these prices you need to add 30 per cent for lengths over two metres.
I have been marketing blackwood timber on a small scale for over two years after a series of small harvests of mainly faster growing edge trees from our north King Country forest. I have supplied blackwood timber to Kings of Carterton on a regular basis and, more recently, a couple of other local joinery businesses.
While attempting to establish a reputation and a toe-hold in the market, I have been accepting $3,000 a cubic metre for air-dried clear grade timber and have yet to find buyers for feature grade. Needless to say I am working on it as it is impossible to only saw clears. I am also yet to find a market for sapwood.
Central supply register
I agree that collective marketing of blackwood is desirable, but I feel that a tender process is not the best way. Having to tender for supply would be a chore for small business owners. They want to have ready-to-use timber supplied promptly following a customer order. Blackwood growers will need to be prepared to organise harvesting, milling, and drying to optimise value. A central register of suppliers, as mentioned by Wink Sutton, would therefore be of growers and suppliers of dried sawn timber. I can imagine regional co-ordinators between growers and buyers but working to a realistic price schedule and agency fee.
I have been working on this basis on behalf of fellow farm foresters locally. It requires a committed person, preferably one with a significant financial stake in the industry. There is a need to spend time building relationships with joinery, furniture and flooring companies.
The Specialty Timbers Marketplace developed by Dean Satchell is good. However to supplant the existing business model of small business owners sourcing their timber requirements direct from importing timber merchants will require a major effort on a regional basis. Collective marketing under an approved national brand would perhaps help this effort. Does selling ‘All blackwood’ sound good?
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