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

 

Restructuring of Southern Cross Forest Products

24 April 2014

Restructuring of Southern Cross Forest Products

The receivers of Southern Cross Forest Products (SCFP) announced today a restructuring of the South Island businesses.

Receiver, Brendon Gibson from KordaMentha, said: “It is no secret that the company has long struggled to secure sufficient log supplies to feed its South Island mills. That issue has continued to compromise trading in the receivership but performance has now been further affected with fire damage at the Mosgiel mill. The moulding plant at the Mosgiel mill remains open but due to constraints in drying, the company is now only capable of processing lower volumes of timber.”

A fire at the Mosgiel site in the early hours of Friday 11th April caused significant damage. The fire burnt out an electrical system, shutting down kilns and boilers and massively reducing drying capacity for the company.

“Unfortunately, we now have no choice but to close one site – the Rosebank sawmill – to stabilise productivity at the remaining sites. Regrettably, this will mean job losses which we had worked hard to avoid. However, the restructuring will allow the core business to be maintained while the sale process continues,” Mr Gibson said.

The Millstream sawmill will remain operational and the Mosgiel site will continue to service and supply the core United States’ solid wood moulding business.

The receivers are also winding down the SCFP Australian business and exploring options to realise the investment in that business.

“The Australian business has never been profitable. Following a review of the options it was clear that the Australian business cannot be sustained,” said Mr Gibson.

In total, 79 jobs will be lost across the South Island sites.

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

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Reserve Bank: Official Cash Rate Unchanged At 1.75 Percent

Global economic growth has increased and become more broad-based. However, major challenges remain with on-going surplus capacity and extensive political uncertainty... More>>

Kaikōura Earthquake: Private Insurers Receive $1.8b Claims

Insurance Council Chief Executive Tim Grafton said most is for commercial loss at $1.36 billion, with residential claims amounting to over $460 million. “...We have a high level of confidence that most people will have received settlement offers by the end of this year." More>>

ALSO:

Forms And Data: New Proposals To Simplify Personal Income Tax

The Government is proposing to make tax simpler for individuals, with people whose only income is from a salary, wages or investments no longer being required to file tax returns to receive tax refunds or to calculate any additional tax. More>>