Help is on the way
WITH CARTER HOLT HARVEY (CHH) UNABLE TO MEET DEMAND, the opening of a new CLT wood processing plant in Rotorua this month will help alleviate New Zealand’s domestic timber shortage.
Red Stag group CEO, Marty Verry, says the plant will add five percent to the capacity of the New Zealand wood processing sector. That equates to around two thousand dwelling units, or most of the estimated shortfall in current timber supply.
The factory will produce cross laminated timber, or CLT as it is commonly known. CLT is a ‘mass timber’ construction product made by gluing successive layers of timber laid crossways over the layer below, to form large panels three, five or seven layers of timber thick. The rigid engineered timber panels are then precision cut by CNC machines in factory and rapidly assembled on site.
In Red Stag’s case the CLT panels can exceed 16 metres x 4 metres in size, making for fast construction and few connections.
Kaianga Ora is a major CLT user in New Zealand and use internationally is widespread. Google last week broke ground on its first mass timber building in Silicon Valley using CLT.
Costing $50 million, the CLT factory is co-located with the Southern Hemisphere’s largest sawmill, Red Stag, in Rotorua. It will employ forty people initially, rising to double that over time, and is partfunded by a $15 million loan from the Provincial Growth Fund.
Mr Verry doesn’t expect all of the CLT factory’s capacity to be used in residential units though as there is already a waiting list of other projects, including retirement villages, student accommodation, office buildings, educational facilities and cultural buildings.
“CLT has a value sweet spot in large-format structures, buildings of three storeys or more, and for mid-floors in terraced housing built to the NZS 3604 standard. Apartment buildings and fast-to-install CLT mid-floors will be our residential focus areas.”
Supply of flooring materials such as joists, I-beams and flooring panels has been delayed in recent months, and Mr Verry expects the building community will be quick to take up CLT mid-floors, which drop into place to provide a finished platform to construct the next level on without delay.
Meanwhile the CLT factory’s sister company, Red Stag Timber is also flexing to help with the timber shortage. The country’s largest sawmill, supplying around 25 percent of New Zealand’s needs, is pulling back uncommitted supply from export markets and squeezing out more hours and capacity to help keep its ITM, PlaceMakers, Mitre 10 and independent clients.
“We plan to bring forward further expansion of both the mill and CLT factory on the back of CHH’s decision to stop supply to key merchant chains,” he says. “There are many in the industry that will want to source from an independently-owned supply chain, rather than relying on product from a competing merchant chain.”
Also commenting on CHH’s decision to discontinue supply of structural timber to some merchants, the New Zealand Timber Industry Federation (NZTIF) says this comes as no surprise.
In recent months all New Zealand sawmills have been under pressure to supply a booming domestic timber market for all end uses; residential building and outdoor timber including fencing, decking and landscaping, says the NZTIF.
However, based on other available timber milling production
capacity and previous cyclical shortages, the Federation doesn’t expect the current timber shortage to be overly prolonged.
Efforts are being made to keep up with the demand, including the diversion of export timber back into the New Zealand market.
However, sawmills’ ability to ramp up production quickly has been constrained in regions by a lack of availability and rising costs of logs and labour, the NZTIF adds.
Apart from the two remaining CHH sawmills, there are still a good number of other mills operating and all are lifting capacity as much as they are able, to meet this current increase in demand. “The biggest challenge to lifting production for mills is getting enough logs and in turn, competing on supply and price with the Chinese buyers and the export demand for New Zealand logs. The next challenge then is getting enough skilled staff to put on additional shifts. Getting the mix of skills required, or training staff, has been an ongoing issue to the timber industry for a number of years,” says the Federation.
They suggest that Councils and building consenting authorities put provisions in place to remove compliance barriers and that Government includes the specialised skills applicable to sawmilling, on the Essential Skills Shortage List so the immigrant labour could be utilised in the short term.
“New Zealand sawmills have historically been able to supply all of the country’s timber needs with few shortages ever occurring or lasting for long. Timber retailers and builders have, in the past, been spoilt with timely deliveries and choice of timber suppliers, leading to few supply constraints and timber prices being held down. However, the squeeze between rising log and labour costs and sawn timber sales prices has led to numerous sawmill closures over recent years. Some regions of NZ now have no, or few, sawmills making these communities more exposed to timber supply shortages.
“Over the last two years alone, we have seen five significantly sized sawmills close down, representing an estimated 400,000 cubic meters of production. While the remaining sawmills have taken steps to plug the shortfall, lost capacity to service the local market is evident.”