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