A sawmill company with about 400 employees and about $100 million in annual sales has been placed in receivership.
Brendan Gibson and Michael Stiassny, of KordaMentha, were this afternoon appointed as receivers of Dunedin-headquartered Southern Cross Forest Products.
The company has four sites in Mosgiel, Milton, Balclutha and Milburn around Dunedin and another site in Thames. In 2012, the last figures available, the company generated revenue of just under $95m.
Receivers spent the day meeting with staff at Southern Cross sites, assuring them they would be paid while a buyer is sought for the business.
Managing director Tom Whitefield this evening referred questions to the receivers.
Gibson said he had spoken to staff throughout the day. He had told them it was hoped the company would be sold as a going concern.
"Certainly at the moment we think it is [a going concern]," Gibson said.
"It's got profitable parts. It's in a tough industry, but it's got some good products, some good customers, but obviously the business has got too much debt so we are trying to get it out.
"We're putting it on the market as a going concern.
"We're talking to customers at the moment to get their support to do that," he said, adding that receivers had the support of bankers ANZ to try to find a buyer.
Sawmills elsewhere have recently complained that forest owners are bypassing them to export the logs, while exporters are under pressure from the strong New Zealand dollar.
"It's been well publicised that the wood processing industry, with the current macroeconomic conditions can be a difficult game," Gibson said.
As well as selling products domestically, Southern Cross exports logs to Australia, the United States and Asia.
Labour economic development spokesman Shane Jones said the latest development came just days after warnings of a likely restructure of operations in Nelson and Marlborough last week. A major sawmill had closed down in Rotorua last week.
"The National Government's forestry policy is akin to a chainsaw massacre," Jones said.
"The work force has been maimed and the businesses are being ruined."
The Government needed to establish a "wood first" policy to favour local firms in the Christchurch rebuild, "so that the Crown's expenditure, a significant proportion of it, goes to sustaining these businesses and employees", he said.