Dunedin sawmill's future unclear

Dunedin's only sawmill - Otago Lumber Ltd - faces an uncertain future.

The board of the Bush Rd, Mosgiel company will hold a conference today to "discuss all available options" to continue trading, chairman Harold Hill said last night.

The family-owned business employs 27 full-time staff.

"No decisions have been made yet but, at the same time, I'm not saying things are going well. I've been involved in this industry for more than 50 years and it's the worst I can remember," Mr Hill said.

"We've got nothing to hide. The timber market is very poor world-wide. Low timber-selling prices make it very difficult to compete with prices that the Chinese market will pay for logs. Many sawmills in New Zealand have already closed."

The export sales of woodchips have also virtually collapsed.

"The woodchip pile at Port Chalmers has been full for several months and a new one was installed at Burnside and is now also full. I understand there's a woodchip ship coming into port soon," he said.

"This is a major problem for all woodmills in the Deep South, as this is the only part of the South Island that exports woodchips."

Mr Hill's son, managing director David Hill, took over the company in 1997.

"We're very concerned for our staff. We've been talking to staff and told them the situation last week. But, we certainly haven't told anyone that we're closing down, or talked about redundancies," he said.

"We're still hopeful we can carry on and we're looking at every possible option. No decision has been made yet."

Otago Lumber processes 29,000 tonnes of radiata pine logs a year, generating 15,000cum of sawn timber. The company produces radiata pine solid wood products for the domestic, Australian and Asian markets.

-nigel.benson@odt.co.nz