The Coronavirus outbreak has reportedly forced more than 1000 New Zealand forestry workers out of a job, as China closes its borders to deal with the crisis. According to The NZ Forest Industry Contractors Association about 30% of the country’s logging crews are unable to work as they feel the crunch of supply chain disruption with the triple whammy of the Coronavirus, the existing oversupply of logs from Europe and the Chinese New Year shutdown. Source: Timberbiz
This is without taking into account the knock-on effect on the whole supply chain, trucks and service providers, ports and the like.
The Ministry for Primary Industries says while Chinese borders are not closed to New Zealand logs, there are problems with over-supply, and logs backing up at Chinese ports, which means the demand for new logs is falling.
Government agencies are working on a support plan for the East Coast, which is being hit particularly hard, says the Ministry.
With the extended Chinese New Year over, exporters are back receiving logs as of this week, and, according to the Eastland Wood Council there are ships waiting at anchor for suitable sea conditions to come into the port for loading to both South Korea and China.
“We are in uncertain times in our industry at present and we know how stressful that is for our contractors, employees and families. We don’t really know how the situation in China will develop but we are putting contingency plans in place to support our forestry whanau,’’ the council said.
“Some companies and contractors are endeavouring to work through it and assess it day by day, but for those who are immediately impacted the resource is to give you access to information on support services if you need them.’’
The Eastland Wood Council’s Kim Holland told the New Zealand Herald this week that the drop in the log price was probably the major factor having the most impact right now.
“The ramifications of the Coronavirus in China are still unclear, as it is still unfolding. For some companies it’s business as usual, while others are on reduced hours, and some are on stand down,” she said.
“The impact is being felt in our rural east coast communities. One of our domestic saw mills has been able to source logs to keep going for another week, and will reassess week by week.
“We are working with government agencies and other regional organisations to coordinate information and support services for those who might need them. We are rallying to support our business people, our workers, and our community…that’s what Tairawhiti does,” she said.
With more than 800 people dead and 37, 000 people confirmed to have been infected worldwide at the time of going to print (with no confirmed cases in NZ), industry is holding its breath as the virus spreads.
The economic repercussions of the coronavirus outbreak worldwide and for New Zealand are just beginning to emerge.
“There will be an impact globally. It’s inevitable – the scale is really the question,” NZ PM Jacinda Ardern said.
She acknowledged that it comes at a time when forests are being cleared in Europe due to high rates of spruce beetle infestation, with large amounts of stock being sent to China.
Ms Ardern said Forestry Minister Shane Jones was looking at options to keep harvesters going, and that the Ministry of Social Development is looking at “what we can provide support-wise for that impacted industry”.