Australia's Wood and Paper Industry

The Wood and Paper Industry produces a wide range of products including sawntimber, wooden structure, fittings, manufactured boards, decorative veneers, furniture, parquetry, market chip and pulp, paper, paperboard and paper products. The major industry sectors are pulp and paper, sawmilling and wood-based panels.

Employment

Australia's wood and paper industry employs about 82,500 people according to the latest labour force estimates from the Australian Bureau of Statistics. The total includes people employed in the following sectors: sawmilling, manufactured boards, woodchips, wooden furniture and other wood products, logging and forestry, pulp, paper and paper products.

Value of the industry

The industry's turnover in Australia was $9.91 billion, or around one per cent of GDP in 1992-93 (latest available data).

Investment

New investment in the wood and paper industry could be $4 billion to $6 billion over the next five years. Feasibility studies are being carried out on a range of value-adding projects including new pulpmills, paper machines, sawmills and wood-based panel products.

· These potential investments can bring about substantial import replacement and boost exports.

Imports and exports

· In 1994-95, Australia exported forest products worth around$1 billion and imported forest products worth about $3 billion. The deficit was approximately $2 billion.

· New investment is needed to improve Australia's balance of trade position which has deteriorated in recent years.

Balance of Trade in Forest Products 1990-95

More than half the exports, by value, are woodchips. Most of the imports are high value added products such as paper.

Forest Products - Imports and Exports 1994-95

Production and consumption

Domestic production of paper and paperboard in 1994-95 was around 23 million tonnes which. represents about two thirds of domestic consumption.

Opportunities exist for a significant increase in local production.

Paper and Paperboard Consumption by Volume

More than half of all fibre used in Australia to make paper now comes from recycled material. Australia is one of the leading countries in the use of recovered paper for paper production.

The total Australian market for sawn timber in 1994-95 was nearly 46 million cubic metres. SoRwoods sourced from domestic plantations accounted for more than 42 per cent of the market by volume. Imports supplied around23 per cent of the market and consisted mainly of softwoods from New Zealand, USA and Canada. Major import sources for hardwood are Malaysia and Indonesia.

Market for Sawnwood 1994-95

In 1994-95, Australia produced close to 3.6 million cubic metres ofsawnwood. About 43 per cent was hardwood and 57 per cent softwood.

Plantation softwoods are increasingly displacing hardwoods in many applications.

Sectoral characteristics

The pulp and paper sector is highly capital intensive and concentrated in a few key regions. Five major companies operate 22 mills across Australia. These mills produce almost 65 per cent of Australia's newsprint requirement, over 30 per cent of our printing and writing paper, over 95 per cent of Australia's industrial packaging and the majority of our tissue and sanitary paper needs.

The sawntimber sector is the largest processor of wood in Australia. Almost 50 per cent of wood is converted to sawntimber. This sector is the most geographically dispersed and accounts for over 20 per cent of the industry's employment. There are around 1,070 hardwood sawmills. Many are small, labour intensive and independently owned. By contrast, the 235 softwood mills are generally large scale and operated by larger companies. A number of new investments in sawmilling are either underway or being considered.

The wood-basedpat~els sector consists of 37 mills. They produce a range of products including particleboard, plywood and medium density fibreboard (MDF). Particleboard and MDF are made from residue and lower grade pulplogs. Production of these materials is usually either integrated with plantation or native forest-based sawmills. Plywood manufacturers, in contrast, use high quality sawlogs. This sector has been growing quickly in recent years. International investors are building new production facilities predominantly aimed at export markets.

Sources: