Dunedin's only sawmill - Otago Lumber Ltd - will develop new
markets to offset difficult trading conditions which have
threatened 27 jobs, the company says.
"Otago Lumber continues to pursue options to restructure its
sawmilling operation and, despite recent difficulties
marketing its woodchip, remains committed to ensuring that
the operation continues in full production," board chairman
Harold Hill said.
The company's board held a conference on Monday to address
industry issues, such as the collapse of the international
The Mosgiel company was now investigating "a number of
potentially promising options", Mr Hill said.
"These include the use of woodchip for dairy wintering pads,
for landscaping use and as a carbon-neutral fuel source."
However, the New Zealand timber industry continued to
struggle, with low timber selling prices and a high dollar,
"High log purchase costs, which are largely driven by log
export markets, make it extremely difficult to return a
positive margin in the current environment. While these
conditions have forced many sawmills in New Zealand to close,
Otago Lumber has continued to trade by keeping operating
costs down and because the company does not have crippling
external debt to service."
"Like many in the industry, Otago Lumber is confident that
the Christchurch rebuild will see a lift in timber demand,
but the industry also needs to see a lift in timber selling
prices," Mr Hill said.
"Otago Lumber is constantly talking with its log suppliers
about the availability of logs at viable price levels, but we
fully understand that the plantation owners must seek the
best available price for their forest product.
"Most of Dunedin's log harvest is currently either exported
for processing overseas, or is trucked out of the district
for milling elsewhere."
Otago Lumber processes about 29,000 tonnes of mainly radiata
pine a year.
"If the company was ever forced to close, that would not only
mean another 27 workers in Dunedin out of a job, but also
another 1000 truck and trailer loads of logs passing through
the city each year for export out of Port Chalmers," Mr Hill
"We are determined not to allow those things to happen."