Dunedin-based Southern Cross Forest Products, which operates five sawmills across New Zealand, enters receivership; escalating log prices, difficult industry environment, seen as key factors
March 5, 2014
(Industry Intelligence Inc.)
– New Zealand's Dunedin-based Southern Cross Forest Products, which operates five sawmills, has entered receivership, The National Business Review reported on March 3.
According to receivers KordaMentha, the core business is profitable, but the company has suffered a difficult industry environment.
A number of sawmills have raised concerns in recent months about escalating log prices driven by increasing export volumes to meet growing demand from overseas. The New Zealand Forest Owners Association estimates that around 40 sawmills have closed since 2003. In October, the Tachikawa Forest Products sawmill in Rotorua entered receivership with the loss of 120 jobs.
KordaMentha says it will seek a buyer for the profitable parts of Southern Cross Forest Products' operations, and will work to keep the business trading profitably while running the sale process.
Financial statements show that Southern Cross Forest Products had borrowings of NZ$17.7 million as at Dec. 31, 2012, as well as a $22.6 million trade finance facility. At that date, total liabilities were $58.29 million, The National Business Review reported.
The primary source of this article is The National Business Review, Dunedin, New Zealand, on March 3, 2014.