TIMBER’S LEAN YEARS

Sun (Auckland), Volume III, Issue 766, 12 September 1929, Page 7

TIMBER’S LEAN YEARS

IMPORTATIONS AND PRICE-CUTTING MILLERS need organisation! HJWWWOttJBrf B.xns 3 [IX) j PARLIAMENT BLDGS., Wed. 4 severe decline in New Zealand’s timber trade, but hopes for future development, are the main features of | the survey of the industry made in the annual report of the State Forest Service tabled in the House of Represen- ! tatives today. The lowest exports since the beginning of the trade an( l price-cutting ha ve aided in placing the timber industry in a depressed condition. The causes for this are all inter-related, and more or less well known. New Zealand sawmills have a producing capacity at least 100 per cent, in excess of present consumption, and, owing to the small size of the average mill, its short life, and the tendency . 10 r merchantable timber to become more inaccessible, the inherent tendency of the miller is to work as near full-time conditions as possible. Cnder-capitalisation of plant makes it essential for many operators to effect sales immediately on cutting to enable wages and current expenses to be paid. ACCUMULATED STOCKS On the other band, over-production during the previous three years has created an accumulation of stocks at most mills for which no immediate sale has been apparent, and has led to a buyers’ market in the trade. As a result, operators have cut prices to a point which in many cases allows little margin of profit, and in some instances does not return the cost of production. Moreover, the forcing of timber upon „ slow market by price-cutting has led to an artificial and speculative demand in advance of real consumption, and has demoralised the price structure, without increasing the total sale of timber. Indeed, continues the report, the price fluctuations and pricecutting which have been prevalent throughout both islands have reduced the annual returns to the industry during the past three years by approximately £500,000, but have not increased the total sale of its products by a single board foot. During the past year the industry has made a genuine attempt by interned reorganisation to effect an improvement in its condition, aud in this respect has been aided to a considerextent by the State. Uniform clissifieation and grading rules have been devised through the agency of the Government and the Sawmillers’ Federation, and an increase in the utilisation of local timber, combined with a more balanced consumption of the product of the log, can be confidently expected when the new scheme comes fully into operation. In the main producing districts the sawmillers have succeeded in organising marketing associations, which have the power to control production and establish a firm price policy. This does not in any way imply price fixation and ircreased cost of timber to the consumer, but guarantees a fair and reasonable return to the producer 5f the timber. The Dominion Federated Sawmillers’ Association has investigated ruling conditions with minute care, and as a result of its deliberations is seeking Parliamentary power during the session to organise efficiently the timber industry. The Bill, which is known as the Timber Industrial Efficiency Bill, is ‘an attempt by the industry to govern itself from within by the formation of a board with power to institute uniform classification and system of cost accounts, to collect and distribute information relating to economic industrial methods and practices, to make »n investigation for the purpose of eliminating waste, and, in general, to bring about improvements for the benefit of the industry. The much-discussed question of railway freights on timber was further investigated. and a study inaugurated to determine the possibility of freighting timber by weight instead of by measurement. The former system, which is in vogue in many foreign countries, gives seasoned timber a decided advantage in freight charges, and thus considerably aids those millers who set,son timber in their bush yards.