9 December 2011
Ranex Group, a privately owned company based in Christchurch, is closing the Upper Hutt sawmill operated by its subsidiary Eurocell Limited. Potentially useful plant from the mill will be stored at its remaining operation in Nelson. Ranex has previously closed frame and truss plants in Christchurch and Timaru and with the shutdown in Upper Hutt its main business is now in the Nelson region. Ranex bought the Moutere, Nelson, mill in 2006 and has 35 workers, processing timber from Nelson forests for the domestic market. It also owns Hunter Laminates in nearby Richmond.The Upper Hutt sawmill produced mostly radiata and some Douglas-fir timber for framing, trusses and fencing. At its peak it processed 360 tonnes a day from forests in Karapoti, Wairarapa, the Kapiti Coast and Makara.
In October Ranex shed more than half its Upper Hutt staff and put the site up for sale. At the time, the sawmill manager told The Dominion Post that the company planned to keep the mill operating if a sale did not eventuate.
The mill had looked to expand last year, hiring 14 new staff. However, the economic climate had changed, Mr McIlvride said.
"Regrettably the Eurocell mill is a victim of the market conditions that have seen massive volumes of logs shipped off shore and poor timber demand at home and in overseas markets impacted by the global financial crisis," said Howard Tonge, president of the New Zealand Timber Industry Federation.
Export markets for processed timber have a been brittle due to the impacts of the global financial crisis. But it is the historically low levels of building activity within New Zealand that is the biggest cause of issues facing the sawmilling industry.
The country's smallest sawmills have been closing for years, as the industry consolidates around the bigger players with the money to invest in more productive machines.
Wood Processors Association chief executive Jon Tanner said the industry is currently rationalising, meaning fewer jobs but more efficient mills. He says clearly some sawmills are doing much better than others and the closures may be related to the scale or cost of the operation or the use of new technology.
Mr Tanner says new technology can mean upskilling workers to operate new hi-tech machinery and the outcome of that is sometimes the loss of jobs, but a greater efficiency to the mill.
He says at the some time as there are reports of mills going out of business, other mills are making new investment and expanding, so it's highly variable and depends on what market the mills are in, the scale of the operation and the kinds of products they are producing.
Mr Tanner says the Christchurch rebuild will be a great opportunity to demonstrate that New Zealand has some unique technology and intellectual property around building multi-storey, commercial, wooden buildings that are seismically tolerant. Efficient machines will be needed for this work.
Meanwhile, forestry minister David Carter says he has encouraged the use of local products for the rebuild of Christchurch, but he can't assure the wood-processing industry that only NZ-processed timber will be used.
Official figures made public this week showed residential building work in the September quarter was at its lowest levels in 18 years.
Sources: Fairfax Media, TIF media release, Radio NZ