Sawmill Closure Tip of the Iceberg

Media Release
30 January 2007

Sawmill Closure Tip of the Iceberg

The Government’s ability to meet its climate change obligations are being threatened by a looming meltdown in New Zealand’s sawmilling and wood processing industry says Wood Processors Association Chairman Dave Anderson.

This follows an announcement that the Bright Wood Sawmill, which exports a large proportion of what it produces and employs around 100 people, is to close because the high level of the dollar is making its products uncompetitive in key markets.

“Bright Wood is just the tip of the iceberg. Delays in deciding whether the Laminex Mill in Taupo will be rebuilt after its fire late last year and the proposed closure of the Pederson Mill in Taupo are also signs that the wood processing sector is not in good shape.

“Added to that is the recent closure of a paper machine at Norske Skog’s Kawerau plant with another pulp operation at Kawerau also due for closure in May” says Anderson.

“Government should be very concerned about these ominous trends. It has invested a great deal of reputation in its climate change policy, but if the New Zealand business environment makes it uneconomic for owners of forests or processing plants to grow and process trees, we are likely to see increasing conversion of forests to agriculture – a trend which is already gathering momentum. The result will be increased greenhouse gas emissions and decreased CO2 absorption, which is directly contrary to the Government’s commitment to Kyoto.

“What’s more, forest owners need the wood processing sector, not just to serve the local market, but also to ensure that value is added to exported product. We need to process wood domestically, as this provides jobs and allows wood residues to be recycled, minimising the emissions of greenhouse gasses involved in log transport.

“If this situation is allowed to continue for very much longer the Government’s climate change goals will become out of reach”, says Anderson.

The Wood Processors Association represents sawmillers, the engineered wood panel, and pulp and paper industries.

ENDS

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