Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Southern Cross Forest receiver to close mill, exit Australia

Southern Cross Forest receiver to close sawmill, wind up Australian business

April 24 (BusinessDesk) - The receiver for Southern Cross Forest Products plans to shut one of the failed wood processor’s sawmills and wind up the unprofitable Australian business as it continues to find a buyer for the business.

A fire at the company’s Mosgiel mill cut drying capacity, reducing capacity to process timber, KordaMentha’s Brendon Gibson said in a statement. To stabilise productivity across the group the receiver will close a sawmill at Rosebank, and Gibson said 79 jobs will be lost across South Cross Forest’s South Island sites.

“It is no secret that the company has long struggled to secure sufficient log supplies to feed its South Island mills,” Gibson said in a statement. “That issue has continued to compromise trading in the receivership, but performance has now been further affected with fire damage at the Mosgiel mill.”

More than 40 sawmills have shut in the past decade, and local wood processors have had to compete for supply with global demand pushing up raw log prices, while at the same time low-cost Chinese rivals squeeze export-focused New Zealand mills.

Gibson said South Cross Forest’s unprofitable Australian business will also be wound down, and he is exploring options to realise the investment in that business.

“Our focus remains on trying to sell Southern Cross Forest Products as a going concern,” Gibson said. “The restructuring in the South Island does not affect the Thames plants.”

Southern Cross Forest Products had borrowings of $17.7 million as at Dec. 31, 2012 with ANZ Bank, UDC Finance, 321 Ltd, Hunter Finance and Heartland, according to its latest financial statements lodged with the Companies Office.

Its loans with ANZ and 321 were in breach of certain covenants at the time, and the 2012 accounts were tagged by auditor Deloitte over the company’s ability to trade as a going concern.

After the balance date, Southern Cross Forest Products negotiated a new funding facility with ANZ which it said would be reviewed in March, 2014.

The company narrowed its annual loss to $1.58 million in calendar 2012 from $2.92 million a year earlier, as it booked a $2.34 million gain on the value of a 2009 acquisition. Revenue climbed 16 percent to $95 million in 2012, though the gross margin was squeezed to 4.6 percent from 8.6 percent in 2011, as the cost of sales rose at a faster pace.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news