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7
NOV 13

An interesting thread - Supply chain conflicts




As part of the thinking for my presentation at the WPA/PMA/FTMA conference I did a bit of background checking, where the below thread went was illuminating and supports my other post “Milk powder, logs and China”. Following is my conversation with Professor Göran Roos


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I am in conversation with a number of wood processors in NZ, they have a problem that they can’t add sufficient value to the processed logs to pay the forest owners price for the logs as China will take all it can for packing. Most of the forest owners are not resident in NZ (institutional owners) the forest maintenance is continually being cut so production is only really fit for packaging – structural and appearance grade timber is increasingly hard to get as short term decisions of owners are forcing long term outcomes on everyone.

This must have been an issue in Scandinavia – individual interests in supply chains threatening the interest of others in the supply chain and reducing overall value add to the raw material – was there a Scandinavian solution? If so can you point me at the literature?

John

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This has not really been an issue in Scandinavia since, firstly the ownership is mainly private with one exception, secondly the value adding is substantially higher in Scandinavia and hence the prices paid are and have been better. Green triangle stakeholders in the big study made if you are interested.

Göran

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So Scandinavia never faced the problem where forest owners could get higher prices offshore than with local processors? We're the forest owners also local as opposed to offshore? Did you never encounter supply chain conflicts of this sort?

John
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No, this has never been a problem. The local large paper and pulp and timber players are fighting each other for access to the raw material so exporting it has never really been an option outside very special niche products.

Göran
   


tags: goran roos, exports, china, scandinavia, supply chain, adding value
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