NZ manufacturers can import plywood for “about 60%” of the cost to manufacture it locally, with the cost of power, now amongst the highest in the world, only part of the problem. “A little bit of it is the cost of power, but not all of it. A little bit is the cost of primary products, but not all of it. And a little bit is our own reluctance to go and diversify,” according to Red Middlemiss, an E Tū Union spokesperson who has worked at Carter Holt Harvey’s Tokoroa mill for more than 20 years.
Yesterday, Wood Central reported that Carter Holt Harvey was well advanced in plans to close the plant, leaving more than 100 jobs in jeopardy. Instead, the building materials giant is leaning on Australia to meet local demand. “They’ve found they can import it cheaper than they can make it here,” Middlemiss said.
The closure comes amid what Clive Sommerville, chief executive of the South Waikato Investment Fund Trust, described as “a most brutal year” for the region’s timber sector. “It’s terribly sad. On top of the OJI news, tertiary education retrenchment and broader sector reforms, people have lost their roles,” he said. “We’ve proactively expanded food banks and budgeting services, and invested in business- and people-capability programmes to help families cope.”
In late 2023, Wood Central revealed that local mills were struggling to compete with the influx of imports – especially from faraway China (now responsible for 70% or more of global plywood production), where manufacturers are now flooding the market with plywood and laminated veneer lumber. “Mountains of Chinese products are coming into New Zealand almost every week, seemingly out of nowhere,” an industry observer told Wood Central. “To establish a new plant in New Zealand, or Australia for that matter, would need at least a five-year lead time that includes two years of planning and two years to get council approval and process another year to complete construction.”
“The Chinese can build an LVL plant (for example) once every three months.”
- To learn more about the decision by Carter Holt Harvey to close its Tokoroa mill, click here for Wood Central’s special feature yesterday.
