A directorof Dunedin's only sawmill has added his voice
to the chorus calling for a fresh look at the pricing structure
of the forestry industry.
The future of New Zealand-produced timber hung in the
balance, Otago Lumber Company Ltd director David Hill said
yesterday following Tuesday's announcement Southern Cross
Forest Products receiver KordaMentha would begin closing down
the company's Otago sites from mid-June.
He backed calls by Amalgamated Workers Union spokesman Calvin
Fisher to look at whether Dunedin City Council-owned forestry
company City Forests could negotiate a long-term supply of
logs to sawmillers.
Dunedin Mayor Dave Cull could not be reached for comment, but
told the Otago Daily Times on Tuesday such an arrangement
would be ''suggesting the ratepayers of Dunedin subsidise the
jobs of the wider Otago sawmilling industry''.
Mr Hill said such a view was ''missing a fundamental point''.
''That point is that forestry is a very long-term business
... yet, at present, we are seeing short-term price increases
forcing or threatening the closure of New Zealand sawmills.
''History has shown that export log markets are cyclical and,
while the Chinese market in particular has been strong for
some time, there is an expectation that it will drop at some
point. Once sawmills close ... they don't tend to open again
and that productive capacity is lost forever.''
Long-term log supply contracts would benefit both parties by
removing price volatility and guaranteeing sustainable
Mr Fisher agreed: ''It's not about subsidy; it's about fair
While more than 200 Otago jobs had been lost because of the
continued unprofitability of Southern Cross Forest Products,
he believed 400 could be affected because other industries,
such as trucking, had links to the forestry sector.
The most recent job losses were a continuation of the
''bloodbath of blue-collar jobs'', he said.
He was angered by Mr Cull's assertion that long-term supply
was subsidising the sawmilling industry.
''That was a b... disgraceful comment,'' he said.
''This isn't about subsidy. It's about a long-term supply
He did not believe the fight to save Southern Cross Forest
Products' four Otago sites was over and ''there's going to be
a lot of discussions taking place before it is''.
City Forests chief executive Grant Dodson said the company
had a supply agreement in place with KordaMentha, as it did
with sawmilling companies.
''We are willing, and will continue, to talk [to
KordaMentha],'' he said.
Receiver Brendon Gibson, of KordaMentha, said he was not
comfortable speculating about what could save the four sites,
although he agreed ''it's like any business, if you can get
those inputs cheaper that will assist the business''.
He reiterated nothing had been finalised in regards to the
four sites and interested parties were ''looking at
individual parts as assets''.
Clutha Mayor Bryan Cadogan said he supported taking ''any
steps that can be taken''.
''I think the discussion has to take place,'' he said.
The Clutha District Council had begun to offer help to the
workers and would continue to help them into new jobs in the
area if the sawmills began closing next month.
''I'm positive in the fact there will be good jobs on offer
for the people here,'' he said.