Sawmiller opts for kinder conditions across Tasman

By PAM GRAHAM

McVicar Timber Group is building a new sawmill in Australia because the country is friendlier to business.

The Christchurch-based family-owned sawmilling company started looking at Australia before the last election, when it thought there was going to be a change of government, said spokesman Mark Ockenden.

And it does not regret the decision.

"We started looking in Australia because we didn't like what we thought might be happening here - and since then it has been even worse than what we thought it would be," he said.

The company starts building a $6 million to $10 million sawmill in New South Wales in the next few months.

Australia was also preferred because it is the company's biggest market. The company has negotiated log supply with state-owned forests in NSW and resource consents for the mill were easier to get than in NZ.

Ockenden said compliance costs of health and safety laws, new employment contracts law and the high kiwi dollar all weighed against New Zealand as an investment destination.

Australian state regional development agencies had smoothed the road wherever they could and "fronted with a bit of finance as well". And the wood supply in Australia was cheaper, longer term and more guaranteed.

The company is not alone in eyeing processing in Australia. Carter Holt Harvey has built up $1.4 billion of processing assets across the Tasman in the past decade.