PF Olsen Supports Marlborough Sounds Harvesting

We all know that harvesting and marketing is a challenging business at the best of times, but harvesting in the Marlborough Sounds brings its own set of unique challenges. These include demanding resource consent requirements for engineering works (roads, landings and barge sites), steep country, the need to transport logs and machinery by barge and for workers to be transported to work by boat or be housed in temporary accommodation close to remote operations. In addition, limited domestic markets and the high price volatility of the log export market can make attractive returns turn negative very quickly.

Therefore, a major issue for Sounds harvesting is investing in all of the costs of planning and mobilising harvesting on the basis of a satisfactory projected return, only to have that turn into a negative return through factors beyond anyone's control.

Solutions to the Challenges

PF Olsen has determined the two most critical factors for our clients to commit to harvesting and for harvesting operations to be successful:

  1. Export log price stability.
  2. A competent harvesting crew with the right configuration of harvesting equipment who will commit to harvesting in the Sounds.

We have been able to reduce the log price volatility issue by working with Asian log purchasers who provide fixed prices for the all the harvest volume for smaller jobs or for a known period of time for larger harvesting operations taking in excess of six months to complete.

With this higher security of returns, PF Olsen is able to package up blocks of work which are more attractive to a harvesting contractor. Most importantly, the fixed prices give the contractor more confidence that the forest owner isn't going to want to stop the harvesting part way through.

PF Olsen worked with Kelvin Proctor who was looking to start his own hauler crew after many years of working in the sawmilling and the harvesting industry. Despite Kelvin's industry experience and obvious hauler harvesting skills he was unable to secure finance through the banks due to their current strict lending polices and Kelvin's lack of recent credit history. PF Olsen stepped in to provide finance to purchase the hauler as well as working capital to get the operation started.

This all came together and in November 2011 when Kelvin Proctor commenced harvesting with the new (second hand) hauler at Manaroa Forest in the Marlborough Sounds. Kelvin has assembled a great team of experienced guys and had them working as a team from day one.

While it is early days the operation has got of to a great start and this can be attributed to a number of things as follows:

  • PF Olsen providing a re-conditioned, work-ready, fit for purpose hauler which has performed well.
  • PF Olsen assisting with a small amount of start-up finance and on going financial support through regular and timely payments for work completed.
  • Working with a motivated, experienced competent operator in Kelvin Proctor as the principal contractor.
  • The ability of Kelvin to attract an experienced skilled harvesting work force.
  • Kelvin being well organised and flexible which allows the harvesting to continue when the inevitable break down happens, and weather or other issues occur?
  • Kelvin's ability to manage the log stock issues that arise when you are two staging to barge sites with irregular access to a truck and barges.
  • Kelvin's management focus on the things that matter including health & safety and environmental management and log quality.

We are pleased this project has provided a solution to the challenges of harvesting and marketing in the Marlborough Sounds, not only for the forest owner, but also in increasing the harvesting capacity in the region.

View of hauler with truck being loaded to go to barge site 3 kilometers from the landing.