TALL TIMBER
One of New Zealand’s longest-serving forestry bosses steps down from his position as head of PF Olsen at the end of this month and NZ Logger sat down with Peter Clark to talk about his career and the future of the industry.
IF THINGS HAD TURNED OUT DIFFERENTLY FOR PETER CLARK he might have ended up being a fencing contractor instead of running one of Australasia’s largest forest management companies, PF Olsen.
At the end of this month Peter Clark steps down as CEO of PF Olsen after nearly 20 years at the helm – one of the longest serving forestry bosses on either side of the Tasman. Before he departs, NZ Logger caught up with him at the company’s Rotorua head office to discuss his career.
As a teenager, Peter spent many happy holidays on a family friend’s farm in the King Country watching over stock, scrub cutting, fixing fences and learning about trees on the property.
“I quite liked fencing,” he says, adding that he wasn’t too interested in the stock, but the trees grabbed his attention.
“I came from a farming background in Southland and had been exposed quite a bit to sheep and beef. But when I got involved in pines I thought these things are better than sheep and beef because for a start they smell better, they are easy to count because they don’t move around and it was about as simple as that, really.”
Well, not quite that simple. No one at Auckland Grammar School seemed to be able to point him in the right direction towards a career in forestry, apart from suggesting the University of Canterbury, which had just started up its School of Forestry.
“It’s a shame they didn’t point me towards the Forest Service as I went through that whole 4-year course without any assistance, just working in the holidays to help pay my way,” says Peter. “Yes, the fees were less than they are now, but you still had to live and pay hostel money. There were actually scholarships available, but I never got told about them.”
Peter continued to work on the King Country farm in the holidays until graduating in 1977 with a Bachelor of Forestry Science (Hons) degree.
Above:
Peter Clark, retiring head of PF Olsen, outside the company’s Rotorua headquarters, appropriately built with timber.
Ironically, after completing university Peter was offered a job by the Forest Service and thought “cheeky buggers, you didn’t help me at all and I didn’t show much interest in that”.
He goes on to say: “So I formed a little silviculture crew and also did some more fencing, scrub cutting in behind Willow Flat, plus a little bit of work for Fletchers.”
He also cut short pulp from thinnings by hand for NZ Forest Products in Mangakino, which he described as “really hard physical work but quite rewarding”.
Hard work it may have been, but it actually provided the platform for the next stage of his life.
He says: “I’d learnt a fair bit in that contracting work. You learned how to run a small business, you had chainsaws to maintain, spare parts, had to be responsible for people and be able to keep everyone motivated and fed, as well as plan the jobs ahead.
“But after a couple of years of doing that sort of work I decided I had better get a real job and use my degree.”
Living in a hut in the King Country with no power, where the only phone connection was a party line and the mail was a bit slow – “every three days if you were lucky” – he responded to a couple of newspaper job adverts.
“One of them was for Kaingaroa Logging Company and the other for Peter Olsen,” Peter recalls. “I applied for both and Peter Olsen replied straight away by letter and I think I was still waiting for a reply from KLC after I accepted a job with Peter.
“He was based at Ngongataha. I had a lot of trouble finding the office – it did have a sign but that had been overgrown by the hedge. I went to the local post office and asked if they’d heard of this company and was pointed in the direction of a little building opposite the quarry.
“I showed up there and he said ‘actually your job’s in Gisborne’. I thought OK. I had my Vauxhall, my post hole borer and my dog and a stereo and off I went to Gisborne that same day. I slept in
wasneeds the office for three or four months until my new boss over there kicked me out and I had to go get myself a flat – I think he worried because I was surrounded by Paraquat drums where I was sleeping.”
And that was Peter Clark’s initiation into PF Olsen, where he has worked for close to 40 years.
He only stayed in Gisborne for two years but remembers how plantation forestry was starting to take off in the region and also how things were done a little differently back then.
Peter says: “My boss, Peter Wallace, took off to the Solomon Islands to do some work and left some unburnt land that had to be planted that winter and it was already about April/May, no tracks into it and that was hard.
“I was just a young forester, not long out of university and we were doing a lot of physical work and some of the stuff we did then you wouldn’t do now. I was carrying out burns with a flamethrower on my own, starting at the top of a gully and would run down through the rivers, lighting either side and then go home and think it was a good day’s work, having just burned 250 hectares. On my own. We did have a permit, by the way.
“The most important thing for me about Gisborne was that I met my wife there. Then Peter Keach came along to run that office. He’s still blaming me for all the mess.”
Back at the Ngongataha head office, Peter was put in charge of the newly formed consulting division with a brief to “go and find some work and do it – and that’s what we set out to do”.
That work consisted of contracts with the Ministry of Foreign
and External Affairs (MFAT) using NZ Aid money around the Pacific, as well as in South East Asia, including China, under the Asia Development Assistance Fund and also working for the Asia Development Bank. Peter and his team travelled the regions looking at opportunities for afforestation and advising on how to go about it. Whilst the work was interesting, it was complicated by the fact that many of the countries he visited suffer badly from not having clarity about land ownership and many projects failed to fire as a result.
It was during one of his overseas trips that Peter Clark was called back to New Zealand after learning that his employer and mentor, Peter Olsen died in late 1998 of natural causes.
“Peter was a good mentor – he was an entrepreneur so was always trying new things. We lurched from opportunity to crisis and back, but it was interesting times for a young forester like me,” says Peter Clark.
In a bid to improve the business model while Peter Olsen was still alive, the young Peter Clark was also tasked with the job of setting up the company’s forest management systems.
“I studied ISO and TQM and started documenting things and how to use standard forms and processes,” he says. “That was all done before Peter died and afterwards I went back into consulting again.”
A long recruitment process identified a successor for Peter Olsen who turned the job down and the company faced the most challenging time in its history.
“The company wasn’t in great shape at that time, we had a few crises on,” says Peter Clark.
“So after the only candidate that we had identified decided not to take the job, Peter Keach and I discussed it and neither of us were sure we really wanted to do this. The company had a few challenges, we’d just lost a big contract which was a big part of our work and there was a court case that was proving expensive to fight.”
As we all know, Peter Clark agreed to fill the vacancy as CEO and set about putting the company back on a sound footing and preparing for growth.
He says: “We had five years of just stabilising the company, getting things tidied up and then we started to grow and used all of our dividends in those days to buy down shares from the Olsen family, because that’s what our constitution required us to do. But the family still own just under 5% and it’s good that they remain involved.”
It wasn’t just PF Olsen that were under pressure during the 1990s. That was a decade of major disruption in New Zealand forestry, with the demise of the Forest Service followed by the splintering of large companies like Fletcher Challenge. But it was also a decade of opportunity, with private investors flocking to put their money into newly established plantations throughout the country to cash in on good log prices.
“There was a lot of disruption at the time, but we were beneficiaries of that,” says Peter.
“There was a bit of consulting work coming out of the restructuring but more importantly for us, it was quite easy to pick up good staff who had been made redundant or left as a result of all the changes.
“We picked up some good people and hung onto them. That was a competitive advantage for PF Olsen and it put us in a good position for growth. It’s much tougher to get those sorts of people now.”
One strategic move steered through by Peter and his team back then was a switch from consulting to a focus on forest and land management – “that’s something I did deliberately” – and build up the capability to do that well.
Peter adds: “We made a lot of investment in IT, GIS, upgraded our computers and we started developing what we now called FIPS (Financial Information Processing System) and we still use that. It is an integrated system that enables us to track job costs – before that we really wouldn’t know how profitable jobs were until they were finished or well into the following month.
“Once we started FIPS we had live validity on how individual jobs were going across multiple clients and multiple forests. We are using other decision-making software now but FIPS is still there and it’s still the core of our business. It’s brilliant.”
Another strategic move came in the following decade when PF Olsen decided to set up shop in Australia at a time when many private forests where being established there under the controversial MIS (Managed Investment Schemes).
“The move to Australia was prompted around 2005 because we felt we had already picked most of the low hanging fruit in New Zealand and we were looking to grow still, so why not Australia?” explains Peter.
“We went in there a bit early. They don’t have the long tail of
small-to-medium forest owners that we have and their boom in forestry was because of the MIS schemes, which were tax-driven. They looked a little bit like a pyramid scheme and we didn’t know when they were going to collapse but you could see it was going to happen with all the heavy borrowings going on and they seemed to have very high overheads – top heavy in promotion fees, senior staff salaries and so on.
“It looked wrong, because forestry can’t handle that type of high overhead for very long and you’ve got to watch your costs. We could see that something would probably break. It was those MIS schemes that were really the target, or what might fall out of them, because the rest were state forests and we weren’t going to get them because they come with a management team.
“Anyway, we hung in there for a few years and eventually the GFC came along and the MIS schemes collapsed and that’s how we got our leg up in Australia. I have to say Australia is going very well, we’ve got 60 staff there, adding to the 147 we now have in New Zealand, with offices in 13 locations here.”
Peter Clark also ticks off other significant achievements for PF Olsen that continue to be an important part of the company’s portfolio. These include the seed orchard at Seddon, in the South Island, which was established under founder Peter Olsen and has since doubled in size, being one of just three suppliers to nurseries and forest owners around New Zealand.
Another achievement, carried out under Peter Clark’s tenure, was the development of the plantation tree nursery at Glenbrook, south of Auckland, which has also increased in size recently and upgraded with more mechanisation. This year PF Olsen will supply 4.8 million young trees to forest owners and is gearing up to take that figure to 6.3 million in 2019.
During his reign, Peter Clark has seen the business grow significantly on both sides of the Tasman and the most tangible sign of that is the impressive PF Olsen headquarters on the Scion campus in Rotorua. It replaced the cramped Ngongataha building in 2008 and showcased much of the wood products grown by PF Olsen clients.
He, like many others in the industry, thanks the heavens that when the Global Financial Crises hit that same year it was a country he knew well that rode in to rescue New Zealand forestry and many of our other exporting industries.
“China absolutely saved New Zealand in the GFC because it was keen on our food and our trees at a time of austerity around the world,” says Peter.
“Even though China’s appetite for commodities can turn out to be a double-edged sword when prices get ahead of the market and we get collapses – which has happened three times since 2008 – we are still in a pretty good space. But let’s not kid ourselves; we are still in this commodity business and we’ll suffer at some point.”
That won’t be under Peter Clark’s watch. He says 20 years at the helm is long enough – “too long, really” – and after giving the PF Olsen board a one-year notice of his intention to resign and take some well-earned sabbatical leave before looking for a new role, that task will fall to new CEO, Te Kapunga Dewes, from the end of September.
He’s happy to be leaving the company in good shape for his successor, adding: “I think I always had the idea that New Zealand is a country of SMEs, there’s tens of thousands of them, that’s great and there’s lots of entrepreneurs, but I think that if you are going to make a difference you need to be of a scale that has a balance sheet and can try things and take some risks that aren’t going to put the company at risk.
“And that is about where we’re at now. That bit has been achieved. We’ve gone from a very small company to something that can look at new technology, new ways of doing things and help train people, which is the hot button now. I don’t think the growth story is over though; there is plenty of growth opportunities ahead on both sides of the Tasman.
“Recruitment is one of the major constraints on the industry – it needs new blood to ensure its future success. This is something that Te Kapunga is very conscious of. We are not alone in this, a lot of sectors are facing the same thing. Dairy has responded through the Federated Farmers apprenticeship and perhaps we need something like that.”
Maybe that is an idea that Peter could follow-up in the future because he isn’t turning his back on forestry completely. At 62 he still has plenty of energy and a love for this business and after a well-earned break he will look for new opportunities in the industry.
NZL