Financially stricken wood processor Southern Cross Forest Products has attracted both local and international interest from potential buyers, and its receiver hopes to progress the sale next month.
KordaMentha's Brendon Gibson today announced plans to shut the Dunedin-based company's Rosebank sawmill after a fire at its Mosgiel remanufacturing site cut its drying capacity, reducing the volume of timber it can process, and decided to wind down its unprofitable Australian distribution business.
An information memorandum in the market for potential buyers has attracted a "mixture of both" local and foreign parties, though the strong New Zealand dollar and high log prices are a challenge for the export-focused business, Gibson told BusinessDesk.
"We're hoping people still see an opportunity," he said.
More than 40 sawmills have shut in the past decade, and local wood processors have had to compete for supply with global demand pushing up raw log prices, while at the same time low-cost Chinese rivals squeeze export-focused New Zealand mills.
"It is no secret that the company has long struggled to secure sufficient log supplies to feed its South Island mills," Gibson said in a statement. "That issue has continued to compromise trading in the receivership, but performance has now been further affected with fire damage at the Mosgiel mill."
