40 | Diversity is the key On average PF Olsen sells between 50% - 60% of its cut into the domestic sawmills. T T from page 38 PF Olsen Ltd: NZFOA FORESTRY Silviculture Specialists Rick & Maz Wiringi 34 Unsworth Road, Rotorua 3097 Ph: 0220386093 Email: flowersarespice@hotmail.com “Two or three years ago, in their peak building season in the cooler months, they would typically use double that amount. But the low is now the average of what it has been used all year. So while the Chinese are still wanting softwood and New Zealand wood, in general, we are having to adjust to a much lower level of demand which has been very tough on our business partners — the contractor workforce.” While many contractors have not had work and some contractors have been lost to the industry, Cyclone Gabrielle resulted in thousands of hectares of plantation forestry being knocked out near Turangi, south of Taupo where a lot of contractors redeployed for salvage logging operations. But Scott says that work is now coming to an end as the wood gets past its use-by date. “Quite a few contractors will be returning to the regions and looking for work, and the work is just not there for them. For many of PF Olsen’s clients/forest owners, the forest owners only get one harvest opportunity so their returns would be significantly impacted by harvesting when the market is low. The other issue we have is that business costs have been increasing. We have significant inflation and very high fuel costs. Not only have log prices been low but production costs have gone up. So the poor forest owner is being squeezed in the middle.” On average PF Olsen sells between 50% - 60% of its cut into the domestic sawmills, though the actual percentage varies significantly region-by-region. For example, in Nelson 80% of PF Olsen’s cut is fed into local mills, while in Gisborne limited mill options means that virtually 100% of the cut is exported.” “The domestic market has also flattened, particularly in regard to structural timber. Right now, we are seeing a little bit of a summer boost but expect that to be a shortterm thing. Some of the mills that produce clearwood from pruned logs have had very good markets for several years, but they are now struggling with the slowdown in Europe. In some areas the harvesting levels are so low that some of the sawmills cannot get enough of their usual product, and they are having to buy export grade logs that they don’t normally buy.”
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