Mill workers 'fingers crossed'

Otago workers of Southern Cross Forest Products are hoping the business will be bought as a going concern and they will retain their jobs.

The company was placed into receivership on Monday, thrusting its 400 staff throughout the country into uncertainty.

All but 120 Thames-based staff worked at the company's timber processing and manufacturing sites in Otago. Most were not union members, although 15 belonged to First Union.

General secretary Robert Reid said the union was involved in discussions with staff and receiver KordaMentha.

''We have our fingers crossed that they may be able to sell it as a going concern, but we also are aware of the huge pressures that are on the forest products industry at the moment,'' he said.

Mr Reid cited the ''triple whammy'' of factors contributing to the industry's decline in New Zealand.

They were the high New Zealand dollar, the high price of logs, and the Government's ''inadequate'' procurement strategy for the Christchurch rebuild and government house-building programme.

''While our guys are losing their jobs, we are buying wood from Chile, Canada and Russia,'' Mr Reid said.

Late last year, Tachikawa Forest Products in Rotorua was placed into receivership, resulting in the loss of 120 jobs, and since 2003 about 40 sawmills throughout New Zealand have closed.

Mr Reid said Southern Cross Forest Products was a significant employer in Otago, and it would be a massive blow to the region if jobs were lost.

''This receivership comes on top of a prolonged period of difficult times for wood processing firms,'' he said.

New Zealand First leader Winston Peters yesterday called for a log price to be set, to end the ''regional devastation'' occurring with the closure of sawmills.

''In the past decade, more than 20 big sawmills, and many smaller ones, have closed with the loss of more than 1700 jobs. Meanwhile, the value of log exports has tripled in the same period,'' he said.

''It is the export log price that is killing local industry, with Kiwi sawmills unable to buy logs for processing. A set log price for Kiwi firms will arrest the decline of sawmills.''

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