Anger builds as forestry jobs axed

By PAM GRAHAM


Anger flared on the East Coast yesterday at cuts to forest contracts as Malaysian owners take over a collapsed Chinese forest venture.

Ernslaw One, which takes up ownership of 33,000ha of forests in the region this month, is cutting the harvest by nearly a quarter. It will be about half the level of two years ago.

Some contractors briefed on new contract arrangements on Wednesday are up in arms at cutbacks, having endured losses in the receivership and invested in the workforce. It is not clear how many jobs will be lost, but more than 100 people are employed by contractors. One contractor, ForestOne, said it was facing a 75 per cent loss of work.

Forestry sources say blockades of forests near Ruatoria and Mangatu are to be discussed this weekend.

Other sources say any new owner will build its own relationships with contractors and that the issues involved are complex, especially with respect to output of crews.

Word that eight crews were being cut to two spread round Ruatoria yesterday, said Radio Ngati Porou talkback host Heni Tawhiwhirangi.

She said there was talk of extreme reactions to the cutbacks because of frustration with the industry.

She advocates an end to forestry because it has "buggered the roads up" and put pressure on small communities.

ForestOne chief executive Andrew Montgomerie expects many of his workers will not turn up today and he is still talking with Ernslaw One. His firm employs about 75 people.

Montgomerie said another foreign company was coming in and slamming the East Coast.

And the Crown and Overseas Investment Commission had signed off on it, he said. The forests are on Crown land.

"New Zealand is not benefiting from this," he said.

Ernslaw One managing director Thomas Song said it was necessary to take a step back before taking a step forward. His company was trying to find markets in China for non-pine species and if it was successful there could be good news for workers within three months.

Ernslaw One intended to build a sawmill in the region and increase the harvest in future years.

Contractors said the infrastructure in the region was fragile. Many of the best contractors had already left and workers were drifting away from the industry.

The forests in the East Coast are mostly maturing for the first time, so owners face the challenge of finding markets for them. Harvest and transport costs are higher than in the central North Island.

The previous Chinese owners, Huaguang Forests, paid US$63.5 million ($96 million), widely regarded as too much. The bank debt the receiver was seeking to recover in the sale was thought to be US$30 million. Interests associated with Ngati Porou were understood be be interested in buying the forests but lacked the funding.

Contractors argue that the cutbacks in crews put to them suggest the harvest will be cut further than the 280,000 tonnes a year signalled.

Harvests around the country have been cut because Asian log markets are weak. Some companies that have overcut in the past are taking the opportunity to rebuild the age profile of forests.

On the East Coast, the poorer-quality parts of logs are left to rot because it is not economic to take them to pulp mills or chip them.