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

 

Post-Post: Brian Roche To Step Down As NZ Post CEO

Brian Roche will step down as chief executive of New Zealand Post in April 2017, having led the state-owned postal service's drive to adjust to shrinking mail volumes with a combination of cost cuts, asset sales, modernisation and expansion of new businesses. More>>

ALSO:

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news