Pine trees are harvested on a hillside in southern Hawke's Bay Photo: RNZ / Kate Newton
A Gisborne-based forest contracting business owner is "devastated" by having to pull the pin on his 23-year-old company.
Robert Stubbs owns Stubbs Contracting and forestry has been his life. Prior to owning the business, he spent 10 years working for others in the sector.
But after much angst and thinking, last week he shut up shop, and on Monday he was sitting on a forest skid site overseeing the removal of his harvest contracting gear. He will sell it on the second-hand market, but that was not going to make him much money.
"The market is flooded with equipment that's not selling. The market is in a downturn situation, for, I don't know, probably the third or fourth time since the beginning of Covid," he said.
This was a situation a number of years in the making, he said - his costs had gone up, margins to make money were slim and as export log prices had kept dropping, forest owners dropped harvesting rates and pulled back on how many trees they wanted harvesting.
At its peak Stubbs Contracting employed up to 70 people - that had now dropped to three harvest crews and about 25 people. Stubbs said the business had been going backwards for some time and it was forest contractors taking the hit.
"I just never seem to be able to get the break or opportunity to turn it around and improve that situation."
Logs stacked after an industry operation. Photo: RNZ / Stock Photo
Asked why contractors did not just ask for more sustainable rates from forest owners, Stubbs said it just never happened.
"Rates are up and down all the time with them, market conditions seem to constantly come into play and those market conditions or prices, fluctuations and low prices sort of tend to roll down the hill and be pushed on to the contractors to sort of compensate for it… whether it's reduced production at times or slight drop in logging rates."
Forest workers earned good money too, and Stubbs said that would no longer be injected into the community. An average take-home pay would be $1500 in the hand a week, sometimes $2000.
He felt some of the people would get other work "but a lot of them won't".
And what about Stubbs himself? "I'm unemployed as well and got to find a job."
The pain and heartache was palpable.
Stubbs said another large Gisborne contractor closed down last week and "as we speak other crews have been cut back to 80 percent work, asked to take a reduction in rates, and woodlot crews being laid off".
There had to be a solution to the forestry issue: "It is wrecking lives", he said. He knew forest companies had to be profitable too, but it was time to take stock of what was happening, he said.
"It's time that, you know, we all sort of looked from the outside and just seeing whether we can't make it a better, more robust industry that looks after us people a whole lot better. The industry needs to look after the sector better.
"We are the third biggest export contributor and we employ a lot of people. Somehow the industry has to find a slightly different model of marketing and selling wood overseas and a mix of domestic sawn wood. Just having that diversity to the market.
"Yep, oh boy, it's a constant boom and bust."
