India – Jacob Mannothra

Key’s visit initiative will have a tremendous impact on forestry. Especially if supported by positive follow up action from NZ bureaucrats in tariff reduction.  This will certainly boost lumber exports, a reprieve from the death sentence for the kiwi saw mills and thousands of jobs in our heartlands. The other major thrust required is to remove non tariff trade barriers like phyto sanitary ones which are currently restricting our exports of logs and lumber from south island.

India requires about 50million cbm of industrial logs/annum and demand expected to grow exponentially. With the ban on de-forestation effective from 1996 and the dwindling domestic supplies, India is now emerging as a major importer of logs, hardwoods from South East Asia, Africa ,South America and softwoods from New Zealand and North America.  New Zealand is the largest exporter of softwood into India  with about 98%  market share.  Forestry products mostly Radiata pine, used in boxing and scaffolding by the construction industry and  for packaging account for 21% of NZ’s total exports to India contributing almost $200 million to this country.

Zindia is the only dedicated Kiwi forestry product exporter of Radiata pine into India and owned by plantation owners and a saw miller of this country.

Our market is India. So the FTA is vital for our growth, especially as our thrust is the lumber from New Zealand to that market. Zindia has managed to promote kiwi lumber against all odds by leveraging on its better quality and reliability of supply. Now many of our Indian saw miller buyers are keen to import  green lumber from New Zealand for further processing in India. This is a win win for both Indian and kiwi saw millers.

Our obstacle to growth are tariff and phyto-sanitary based non-tariff barriers and unhealthy competition and dumping by other Kiwi log exporters.

Tariff Barriers           To illustrate this, the current basic import duty of 10% for lumber  is a serious deterrant for growing the trade from New Zealand. When an Indian Pine log importer pays 9.356% of the CIF( Cost Insurance Freight) value, the lumber importer has to pay a disproportionate 14.712% including the basic duty and SAD( Special additional Duty). The Indian import duties increases with value addition upto 31.70% for mouldings and door frames.

Solution- FTA, Repealing of the duties

Non Tariff Barriers- Phyto sanitary– The forestry product exporters from South Island are prevented from exporting logs and green lumber in the winter months. The prevalent low temperatures below 10 degrees centigrade makes fumigation with Methyl Bromide impractical. This can be sorted by negotiating with the Indian authorities to allow fumigation on arrival.

Both Japan and Korea allow fumigation on arrival. The Canadians have succeeded in getting the Chinese to allow fumigation on arrival into two of their ports. There is precedence even in India, as the fumigation of English willow wood and certain pulses are allowed on arrival. Its interesting that New Zealand used to export to India unfumigated  without a single incidence until quite recently.

All it requires is political will and bureaucratic support to negotiate at least the exports of forestry products from South island during winter months. This can be achieved by concerted action by our  MAF, Scion , MFAT and NZTE with an able negotiator like Tim Groser in charge. This will add at least $100million to the bottom line and support thousands of jobs and boost the ailing sawmilling industry of the south island.

It will also make our forestry product exports cheaper and increase options to Indian saw millers as high lighted by the memorandum submitted to our PM by the President of the Pine Importers Association of India during the mission visit. So this is one issue which has support from both the NZ exporters and Indian importers.

For NZ business

I am passionate believer in India as the perfect trade partner for New Zealand as we have English as a language, west minister law, and pacifist ethos. We enjoy similar games like cricket. It offers one of the fastest growing markets for products from commodities such as dairy products, forestry products, wine , coal to technology, software, films and tourism.  The FTA  will improve our ability to join hands with Indian business to set up value addition in India to access the Middle-east, African and even European markets.

If we get rid of the massive Indian import tariffs, New Zealand wine can easily find a market as large as UK. New Zealand’s cool chain technology can save the massive 20 to 30% losses in vegetables and fruits from the field to the table. I can easily see our agricultural scientists working to improve Indian farming and post harvest technology to feed its poor.  Already our Hamilton jets power Indian navy crafts. Sealegs aid Mumbai police in patrolling its sea coast against terrorists. Our architects are building malls. With proper promotion  Indian tourists can keep our hotel industry humming.  With the right  incentives we can easily encourage more quality Indian films  to be shot in NZ using our technicians and our Special Effects capabilities.

Happy to update anyting if you need.

 

Cheers

 

Jacob

 

Jacob Mani Mannothra

 

Zindia Ltd        Sounds of Forest Ltd      Fortimber Ltd          Resources New Zealand Ltd                                                                   

      

jacob@zindia.co.nz         jacob@soundsforest.com              jacob@fortimber.co.nz          jacob@resourcesnz.co.nz

                                       www.soundsforest.com                 www.fortimber.co.nz

 

 

Postal Address        P.O Box 608, Picton, New Zealand

Landline                  +64 3 5739000

Mob                        +64 21 345707

 

Member:                                                                                                           Award

Forest Product Exports Committee (FPEC), New Zealand                                  Zindia- Best Exporter to India-2008

Executive Committee- India-New Zealand Business Council                             Zindia- Best Exporter to India-2009

Victoria University -MBA Advisory Board

 

 

 

 

 

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Hi Fran

Apologies for the delay. I am currently travelling in the US and will send you the detailed info with stats by tomorrow when I am on terra firma.

Wee bit different clearing the immigration que in LA after the Airforce1 experience!

Key’s visit initiative will have a tremendous impact on forestry especially if supported by positive follow up action from NZ bureaucrats in tariff reduction which will certainly boost lumber exports giving a reprieve from the death sentence for the kiwi saw mills and thousands of jobs in our heartlands. The other major thrust required is to remove phyto sanitary non tariff trade barriers which are currently restricting our exports of logs and lumber from south island.

For Zindia, the only India dedicated kiwi forestry exporter, the group photos with John Key with our loyal buyers is priceless as in a master card advert. Especially for a country steeped in status consciousness.

Also greatly appreciate Tim Groser’s match making skills with top Indian companies. Truly amazing that we have a politician who can walk the talk.

Will send you more details by tmrw

Cheers

Jacob