Manufacturing survey: more jobs at risk in wood industry

Friday April 1, 2011.

A union for wood processing workers believes several hundreds more jobs in the industry are at risk, following a further drop in wood manufacturing reported this morning.

Statistics New Zealand’s just released manufacturing survey reports an overall 3.3% increase in the volume of manufacturing sales in the December 2010 quarter.

However, bucking that trend is a 4.2% drop in volume of sales for the wood and paper product manufacturing industry, following falls in the previous two quarters.

The National Distribution Union says that while exporters of raw logs are making money, with log prices at record highs, value-added wood processors are being put out of business.

“The NDU raised the issue of wood processing job losses with the Forestry Minister and industry representatives at Parliament in January,” NDU General Secretary Robert Reid said.

“We estimated at that meeting that at least 1,129 wood processing jobs had been lost since 2008.”

“However we fear further jobs are at risk, based on the emerging second quarter prices for logs.”

“In the first quarter of 2008, the price for A grade unpruned logs was around $NZ60 per tonne. The prices being quoted to NZ wood processors for the second quarter of 2011 are $NZ125 to $NZ130, which equates to the global price minus shipping and other costs,” Robert Reid said.

“These prices may be great for the raw exporters of logs, but they are unsustainable for New Zealand value-added wood processors.”

“Even at the first quarter 2011 price of $NZ100 per tonne, many wood processing companies told us that they will have to cut back production and lay off workers if the log price does not return to a realistic level.”

“Global log prices are being pushed up China and India, but New Zealand’s competitors for soft wood such as Russia, Canada and Chile all have a two tier pricing system for logs with local manufacturers able to secure logs at a much lower price than the global log prices.”

“While there is talk about making greater use of New Zealand wood in the reconstruction of Christchurch, this will all be hot air if there are no local wood processors left to manufacture the wood required.”

“It seems our “do nothing” government has given up its economic sovereignty under the WTO and free trade agreements to intervene in the setting of the price of logs. The union will therefore take the case for a lower domestic log price to the forest owners,” Robert Reid said.

ENDS

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