Timber production set for expansion

It is hoped a new wood processing plant in Rotorua will go some way towards helping New Zealand’s current timber shortage.

Timber has been in short supply after Carter Holt Harvey cut supply to some of its regular customers, including ITM, Bunnings and Mitre 10 in late March, due to production issues and heavy demand.

The move has seen other mills redirect export timber into the local market to help alleviate the shortage and the problem is not expected to last long.

However, longer term, a new cross laminated timber factory in Rotorua, will increase supply in New Zealand by five per cent.

Red Stag group CEO, Marty Verry says that is the equivalent of about 2000 dwelling units, or most of the estimated shortfall in current timber supply.

Cross laminated timber is a new ‘mass timber’ construction product being adopted rapidly worldwide. It is made by gluing successive layers of timber laid crossways over the layer below.

The engineered timber panels are then precision cut by CNC machines in factory and can be quickly assembled on site.

In Red Stag’s case the CLT panels can exceed 16 meters by four meters in size, making for fast construction.

Costing $50 million, the CLT factory is located by the Southern Hemisphere’s largest sawmill, Red Stag, in Rotorua. It will employ 40 people initially, rising to double that over time, and is part-funded by a $15 million loan from the Provincial Growth Fund.

Red Stag Timber supplies about 25 percent of New Zealand’s needs, and is pulling back uncommitted supply from export markets and squeezing out more hours and capacity to help keep its ITM, PlaceMakers, Mitre10 and independent clients.

“We plan to bring forward further expansion of both the mill and CLT factory on the back of Carter Holt Harvey’s decision to stop supply to key merchant chains,” says Verry.

The New Zealand Timber Industry Federation says the decision by Carter Holt Harvey to discontinue supply to some merchants came as no surprise.

In a statement the NZTIF says all New Zealand sawmills have been under pressure to supply a booming domestic timber market.

However, based on available timber milling production capacity and previous cyclical shortages, the New Zealand Timber Industry Federation doesn’t expect the timber shortage to be prolonged.

Efforts are being made to supply the demand in some cases mills are diverting export timber back into the New Zealand market.

“However, sawmills’ ability to ramp up production quickly has been constrained in regions by a lack of availability and rising costs of logs and labour.”

That, in turn has been disputed by the Forest Owners Association.

Association president Phil Taylor, pointed to the two biggest wood processors in New Zealand, both publicly stating that the shortage is mostly caused by a covid emergence building boom.

“Carter Holt Harvey issued a statement stating the shortage was short term and industry wide caused by a huge timber appetite as well as CHH’s difficulties with upgrading capacity at its Kawerau mill.”

Red Stag’s  Marty Verry says there is a worldwide building boom and New Zealand was no exception.  He has said that it was good to have the wisdom of hindsight but no one was going to pick Covid happening and its “construction aftermath”.

Phil Taylor says the volume of the New Zealand timber market has been remarkably stable for at least the past two decades.

“On top of that you can’t expect processors to have capacity on stand-by for extra sales at a level which hasn’t happened in the past 20 years.”


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