Fletcher Forests opts out of plan

By PAM GRAHAM

Fletcher Challenge Forests has decided not to join the log export marketing company being set up by Carter Holt Harvey and the Central North Island Forest Partnership's receiver Ferrier Hodgson.

Fletcher Forests said it did not want to join the plan to stop New Zealand forest companies competing with each other in log export markets until it was developed further.

"It would be useful if there were more people involved," said Fletcher Challenge Forests' chief operating officer Ian Boyd.

Chief executive Terry McFadgen, who promoted industry co-operation in a speech last year, said the company was attracted to the concept of a collaborative marketing entity for exports but strategic, structural and governance issues had to be resolved.

Carter Holt and the CNIFP receiver said they were pursuing the plan. The entity will be established by June and the intention is still to invite others to become involved.

Details of the plan are subject to confidentiality agreements but it has been reported that Export Co will buy the logs it handles and will have some former Carter Holt Harvey staff on day one.

Industry participants have said the initiative will work only if it is independent and transparent because small forest owners will contribute as much as two-thirds of the increased harvest forecast in the next decade and will require reassurance that large companies will not control supply.

Fletcher Forests is selling forests to focus on distribution and processing businesses and betting that the return of proceeds to shareholders will address a deficit between the company's share price and asset backing.