CHH Adopts New Grading for Laserframe

21 November 2003

CHH Adopts New Grading for Laserframe

Auckland - Carter Holt Harvey (CHH) announced today it is re-specifying its Laserframe timber to meet the widely accepted New Zealand F5 quality grade from next Monday (24 November, 2003.)

"This decision follows CHH's comprehensive internal review and its participation in an Australasian industry study of grading standards over the last 12 months that is still in progress. These have shown that it is appropriate to change the grade specifications of the Laserframe product because changes in forestry management practice have made it more difficult for manufacturers to consistently meet the MGP10 grade in recent years," says Devon McLean Chief Operating Officer Carter Holt Harvey.

"At its launch in 1992, the original MGP10 grading was associated with the harvesting of older, more mature timber and it was always recognised that this would eventually have to be reviewed as processing methods and the available forestry resource changed within the industry over time. While it has taken Carter Holt Harvey some time to work through this complex situation, we now believe we have developed a positive and practical solution", says Devon McLean.

The company has appointed international agency Bureau Veritas to independently audit the Quality Assurance program for Laserframe.

F5 is an industry recognised grade, that has a long history of specification in the New Zealand building industry.

The Commerce Commission is currently investigating the product description of Laserframe as MGP10. Carter Holt Harvey is co-operating with the Commission's enquiries.

"Carter Holt Harvey is confident that the grading changes it has made following its analysis have addressed any product description concerns," says Devon McLean.

More information is available on our web site (http://www.chh.co.nz/laserframeupdate) or from our information line (0800 424 496).

ENDS

CHH adopts new grading for Laserframe
Questions and Answers
21 November 2003

What’s the reason for making this change to the Laserframe grade?

The forest resource is changing. This is making it more difficult for manufacturers to consistently meet the MGP10 grade specifications. As a result CHH has decided to change the grading of its Laserframe product from MGP10 to F5.

There’s been talk about changing this MGP10 standard for some time within the industry – why has it taken so long?

Grading is a complex issue for the industry. It has taken CHH some time to develop a positive and practical solution.

CHH has been conducting its own comprehensive internal review, and in the last 12 months has been participating in a trans-Tasman timber grade study that is still in progress. This study involves most of the MGP10 producers, and is looking at how the engineering properties of timber have changed over time.

From Monday 24 November CHH will re-specify its Laserframe MGP10 products to comply with the more appropriate, industry-recognised F5 grade.

What’s the real difference between MGP10 and the new F5 grade specification that Laserframe will be marketed as?

The F5 grade is an industry-recognized grade, and has a long history of specification in the New Zealand building industry. The main difference from MGP10 is that F5 specifies a lower Modulus of Elasticity.

All timber that has been specified previously as MGP10 meets or exceeds the F5 grade properties.

Why is the Commerce Commission currently investigating Carter Holt Harvey’s marketing of Laserframe?

The Commerce Commission is currently investigating the product description of Laserframe as MGP10. Carter Holt Harvey is co-operating with the Commission’s inquiries.

When did the Commerce Commission begin its investigation?

Carter Holt Harvey became aware of the Commerce Commission investigation in October 2003.

Do you know what course of action the Commerce Commission is likely to take in its final decision?

No we don’t. We understand the Commerce Commission investigation has been focused solely on the product description of Laserframe as MGP10.

How will you use the remaining stock of MGP10 timber? Will any of this continue to be sold as MGP10 stock?

All timber that has been specified previously as MGP10, meets or exceeds the F5 grade properties. All existing Laserframe stocks should be used as F5 grade timber. Laserframe will be sold as F5 from Monday 24 November.

Are there any safety or performance issues behind the decision to grade Laserframe differently?

CHH can find no evidence of performance issues specific to Laserframe MGP10. And, an independent expert analysis has confirmed our own assessment that there are no safety issues with the product.

What are the ramifications for your customers in making this change?

All Laserframe product delivered to market from Monday 24 November will be specified as F5 grade. From now on customers should use F5 engineering values when designing for the use of Laserframe. All timber that has been specified previously as MGP10, meets or exceeds the F5 grade properties.

Is Laserframe still a safe product?

Yes. An independent expert analysis has confirmed our own assessment that there are no safety issues with the product. CHH can find no evidence of performance issues specific to Laserframe MGP10.

How will CHH ensure that Laserframe continues to meet the F5 industry specification?

CHH has appointed international quality auditors Bureau Veritas to independently advise on, and audit the Quality Assurance programme for Laserframe.

How is CHH going to communicate these changes to its customers?

We will be advising our customers about the change through the merchant network and information is available on our website (www.CHH.com\laserframeupdate), and information line (0800 424 496).

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