Timberlink’s Blenheim sawmill employing 75 staff could close as an “urgent” review of operations is carried out. Timberlink New Zealand has been negatively impacted by higher log costs, lower Asian prices, and a strong New Zealand dollar since it purchased the mill in 2015. Source: Stuff NZ
Timberlink chief executive Ian Tyson said the company was “at the mercy” of a number of factors outside its control, and it was “difficult to see those changing anytime soon”.
“It has become clear that we need to seriously consider whether the business is sustainable,” Mr Tyson said.
“We have tried hard to avoid the need for a review and arriving at this point is extremely disappointing.”
Staff was informed of the review on yesterday.
“We have a really talented team in Blenheim, and we really feel for them. We also know this will be a big blow for the local community during these uncertain times,” Mr Tyson said.
“While Covid-19 has had an impact on the markets we distribute to, it is not the driving force for this review.”
Timberlink would provide the site with an update on 8 September. The review was being carried out in conjunction with PwC. The sawmill, off Battys Rd, was taken over by Australian company Timberlink in September 2015, after they bought the site from Flight Timbers.
The company claimed NZ$520,190.40 from the wage subsidy for 74 employees. It had invested more than NZ$10 million into the Blenheim site, where it processed 123,000 tonnes of radiata softwood log from South Island plantations.
Its products were distributed throughout New Zealand, Australia, Asia and Europe. Locally these were supplied to retail hardware stores and re-processors.
An economic response team in Marlborough set up to help the region recover from the impact from COVID highlighted the importance of forestry to the region, contributing NZ$164m to Marlborough’s GDP annually.
Marlborough Forest Industry Association executive officer Vern Harris said he was surprised to hear of the review.
“It’s disappointing to hear, but hopefully it is just a review,” Mr Harris said. Blenheim also had a second sawmill, Kaituna Sawmill, owned by OneFortyOne.
Mr Harris estimated between the two sawmills, about 35% of Marlborough’s annual forestry cut was processed locally.
“It could possibly be mitigated by Kaituna [Sawmill] picking up some of the slack, but I don’t know whether that would be immediately possible,” Mr Harris said. “It’s not a good thing, and we don’t want our processing capacity to diminish in Marlborough or on a national basis so it would be very disappointing if they did.”
Mr Harris said, as far as he was aware, Timberlink would not have a problem with sourcing material.
“Individual companies will be affected to a degree by something like [Timberlink closing its Blenheim site], depending on their circumstances.”
