Closure of sawmill indicicative of state of timber markets

New Zealand Timber Industry Federation Inc

Closure of sawmill indicicative of state of timber markets

The closure of the Eurocell sawmill in Upper Hutt is symptomatic of the state of timber markets in New Zealand and overseas.

Any suggestion that New Zealand sawmills are non competitive and have not invested in new plant are way off the mark said Howard Tonge, President of the New Zealand Timber Industry Federation.

New regulatory requirements, buyer needs and a drive to greater efficiency have been major reasons for continual upgrading and investment by sawmills in this country. Timber grading equipment, more efficient sawing technology, labour saving grading and sorting equipment and focussed management have been some of the improvements introduced by New Zealand sawmills in recent years. These have all resulted in a vastly more efficient industry.

Regrettably the Eurocell mill is a victim of the market conditions that have seen massive volumes of logs shipped off shore and poor timber demand at home and in overseas markets impacted by the global financial crisis.

The explosion in log exports to China and the demands of the supply chain to that market have left local sawmillers struggling for logs to process at times over the past year and more.

Export markets for timber have been brittle due to the impacts of the global financial crisis.

Here at home historically low building activity is the biggest cause of issues facing the sawmilling industry. Tonge says our population and household formations continue to grow at a pace that is quicker than building activity. It is here that central and local government has an ability to ease the burden facing first home buyers and others keen to set up house. Shifts in policy that will encourage the direction of savings into housing rather than funds management will achieve a great deal for many families and the industries and trades associated with construction to say nothing of the spillover effects to the wider population. Even simple measures to reduce the compliance costs of land development will have major positive affects says Tonge. As an example, reducing the local government charges associated with the development of sub divisions would be a huge boost he says. Over recent days we have had some publicity about the cost of housing in New Zealand. Here are some thoughts about how we can simply fix that problem.

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