New forestry body 'spells end for mills’

Press, 4 February 1986, Page 6

New forestry body 'spells end for mills’

PA Wellington The formation of the new Forestry Corporation would probably sound the death knell for many sawmilling firms, the OtagoSouthland Timber Industry Federation president, Mr Dave Coyle, said on Sunday. The proposed corporation could use monopoly powers to force private timber companies out of business, he said. A Forest Service confidential bulletin to staff has indicated that the corporation, which is to replace the service, would be run as a vertically intergrated business,

growing the raw material and handling it right through to and the retail stage.

It would have the power to process more state timber in competition to the industry it previously supplied. If the corporation was to run as a business, basing its decisions on profit, it was hardly likely to sell raw materials to its competitors, Mr Coyle said. Most timber companies got their logs from state forests. The industry wanted guarantees of continued availability of wood at competitive rates, and no privileged competition.

There had already been early indications of things to come, Mr Coyle said. In the Tapanui region of West Otago, two private timber mills compete with one state, mill. The Forest Service said last October that the State mill would get .14,000 cubic metres of radiata saw logs more over the next few years, and logs for private mills would drop by exactly that amount.

Mr Coyle said the formation of the corpora- > tion was the first step towards the nationalising of the timber industjy.— x The industry _did -not mind competition, but it_, did not want privileged—competition. ~ The forests were planted using taxpayers’ money; the industry would not mind as much if its competition was funded by private investment. The private timber industry had developed after years of hard work, with many of its members now highly experienced. There had been no consultation with the industry by the Government, and there had been no acknowledgement of the Southland industry's submission to the Govern-c; ment on the corporation.