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Nthld wood processors trading steadily, investing

27 September 2005

Northland wood processors trading steadily and investing for the future

Northland’s wood processing industry continues to be a major contributor to the region’s economy, according to the latest annual survey of members of the Northland Wood Processing Cluster.

The survey, carried out by Enterprise Northland, shows that although growth rates have slowed, confidence levels remain reasonably high.

The Northland Wood Processing Cluster now has 13 members, 12 of which took part in the survey. The 12 companies account for the annual processing of almost 430,000 cubic metres of timber, a combined turnover of $155 million, exports valued at $66 million and the direct employment of 667 people.

Ten of the 12 companies expect to increase the volumes processed and their turnover in the next year, while eight of the 12 are looking forward to higher exports and employment.

“The past few years have seen some of the most difficult trading conditions imaginable for wood processors, and these have taken their toll on a number of companies elsewhere in the country,” said Northland Wood Processing Cluster chairman Garth Mortensen. “However, the companies that make up the Northland Wood Processing Cluster have maintained steady trading levels and continued to invest for the future.

“Having withstood the past few years, they have proven themselves to be sustainable in the face of international instability.”

In combination, forestry and wood processing are Northland’s third-biggest income earners.

TDC Sawmills’ new mill at its Port Hills site, which is scheduled to be commissioned by the end of this year, will eventually increase the company’s capacity for “green sawn” timber – which goes on to further processing, such as treating or kiln-drying – from the current 100,000 cubic metres a year to 400,000.

Rosvall Sawmill is running at full capacity on a single shift. The company has been assisted by its strong retail business, Rosvall ITM, but says key export markets are stable and now showing potential for future growth.

At Legacy Timber, investment in plant has been matched with investment in people – Legacy has employed a design director and a marketing director. Legacy’s focus on high-value projects, such as furniture, and global markets is beginning to pay off, and the company says it is continuing to uncover new opportunities.

Wood processors – sawmillers, remanufacturers and timber treatment plants – create products such as weatherboards, framing and structural timber, interior mouldings, flooring and panelling, and timber for use in high-quality furniture.

Processing logs increases their value many times over and Northland’s wood processors have the objective of ensuring that more processing takes place within the region, reducing the proportion of logs exported before value is added.

The figures produced by Enterprise Northland also include year-on-year comparisons of performance, benchmarked against figures from the original six cluster members which participated in the first survey in 2002.

Over the past year, the original six companies have enjoyed slight increases in turnover while processing similar volumes of wood. The value of their exports increased by three percent and their employment levels rose seven percent.

Their growth projections have been tempered slightly over the past two years but three of the six still expect to export more and take on new staff during the year.

ENDS

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