13 Apr 2015

Wood firms fear dollar linked closures

6:40 am on 13 April 2015

The close to parity exchange rate between the New Zealand and Australian dollars is threatening to send some of this country's wood processors to the wall.

Australia is New Zealand's biggest market for manufactured wood products that range from solid and engineered wood components, to panels and mouldings.

Wood processing

Photo: 123rf

The trade has been worth about $1 billion a year - about a quarter of the total log and wood exports.

The Wood Processors and Manufacturers Association said trans-Tasman sales could make up more than 60 percent of some companies' revenue.

However, chief executive Jon Tanner said the exchange rate was now making New Zealand processors' products more expensive than their competitors' and slashing their earnings.

"Because of the parity of the dollars, we're just not making any profit there at all now," he said. "We've got companies that are losing tens of thousands of dollars monthly and weekly as a result of this.

"So it is really hurting this sector ... we think it's just gone too far."

Dr Tanner said he thought there was a risk of some wood processors going bust, particularly small and medium sized companies, because Australia was such an important market.

He said the exchange rate also made the Government's vision of doubling the value of primary exports by 2025 "a lot hazier".