The Amalgamated Workers Union New Zealand has laid blame
for the impending closure of Southern Cross Forest Products
squarely at the feet of the Dunedin City Council and local
Yesterday, receiver KordaMentha announced 101 Otago-based
staff at SCFP would be laid off progressively from mid-June.
Staff were told there was no interest in buying the company's
South Island assets as a going concern and KordaMentha was
attempting to sell the sites separately.
The decision affects 66 staff from the company's New Zealand
Wood Mouldings plant in Mosgiel, 26 from Millstream Lumber in
Milton, one from its Milburn site and the eight remaining
staff at Rosebank Sawmill, in Balclutha.
Union spokesman Calvin Fisher said the attempt to sell SCFP
as a going concern was doomed from the start because
DCC-owned forestry companies were taking recent record-high
market prices for its locally grown logs and getting maximum
profit, rather than lowering prices to support the
beleaguered local business.
''It was never going to be a runner if they [SCFP] couldn't
secure the wood, and those forest owners who had the
opportunity simply saw the short-term gain for the log price
at the wharf.
''That's why it's failed.''
He said market prices had grown so high because New Zealand
was the only country in the world that did not place tariffs
on its logs at the wharf to protect local industry-added
The industry had been burdened for decades because bought and
sold cutting rights were usually held by large overseas
superannuation funds which capitalised on the no-tariff
Mr Fisher said the DCC needed to be ''put on the ropes'' over
''They'll tell you it's about the market forces. Where is the
long-term strategy in that?
''How can people lose their jobs at a local manufacturing
plant when the ratepayers have been told there's always a
wall of wood to be felled and processed?''
He said New Zealand Wood Mouldings was established on the
back of previous council decisions to plant pine trees around
the city, with the promise of more jobs for ''ratepayers'
children'' when the trees matured.
''But it's been bloody disappointing to hear current
councillors and previous councillors comment that they have
an obligation to take the market price.''
There was value in job retention, he said.
''The council need to have a good hard look at themselves,
over long-term job benefits and added value in the region,
because they are going to export hard-working people -
[skilled mill workers] are going to leave the city.
''It wasn't that long ago, that factory [New Zealand Wood
Mouldings] was producing 180 jobs, 24/7, on eight-hour shift
rosters,'' Mr Fisher said.
''To think we've got forests right on our doorstep and we
still can't keep plants running - someone has to be
accountable for that.''
Dunedin Mayor David Cull rejected the criticism.
''What the union is suggesting is that City Forests should
take a lower price, make a lower profit, and pay a lower
dividend to the ratepayers - so essentially, they are
suggesting the ratepayers of Dunedin subsidise the jobs of
the wider Otago sawmilling community.
''It's a reasonable proposal, but that's what it means.''
Mr Cull said the loss of 100 jobs was a great loss for the
local employment market.
''Unfortunately, this is the timber business and it is
becoming too common around the country.
''It's another reason that we need to keep the effort up to
diversify our economy and the employment types that we are
able to offer in the Otago area,'' Mr Cull said.
City Forests chief executive Grant Dodson said the company
had been a significant second-tier supplier to Southern Cross
Forest Products for many years, and had increased supply to
the mill since the receivership was announced. City Forests
sold logs at market prices, he said, declining further
SCFP was placed in receivership on March 3, and about 80
staff were made redundant in late April.
KordaMentha said it would help the 101 staff try to find