Forest Service split may kill timber companies

Press, 10 January 1986, Page 8

Forest Service split may kill timber companies

PA Wellington Sawmillers and timber companies relying on state wood for raw material face collapse if a Government forestry corporation becomes a full competitor. The Timber Industry Federation has described the Government’s proposal to intrude into what has effectively been a private sector domain as horrifying. The controversy centres on a decision made late last year to split the Forest Service into three, with its production side becoming a corporation which will become a fully commercial competitor in the forestry industry. Until now many sawmillers and timber firms have tendered competitively for state wood grown by the Forest Service. But if the corporation becomes a competing business, it is unlikely this state wood will remain available. Bruce Anderson describes

his sawmilling company, Anderson and O’Leary, as fairly typical of others in the country. It relies on the state resource for processing material. He has been an aggressive marketer and his company is now committed to exporting about half its products, or ?2 million worth, a year. It is established in Australia and Singapore -

and in fact was one of the earliest companies to develop the latter market. But he faces collapse if state wood becomes unavailable.

“The difficulty that we find ourselves in as a private sawmiller without its own resource is how at this stage we can survive?” Mr Anderson said.

It appeared there would be a monopoly of exports and state control of what had been a resource available for competitive tendering.