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Successful recovery of Waitane Mill bad debt proves PF Olsen Payment Protection

With limited options for pruned log sales for Napier clients, PF Olsen applied for trade credit insurance for Waitane Mill Ltd in late June of 2016. This was approved promptly by the insurance broker National Credit Insurance via its very efficient on-line application process. Getting log sales access to this mill with the peace of mind of our trade credit insurance cover proved the great benefit of PF Olsen’s latest enhanced service offering – PF Olsen Payment Protection.

“We had recently commenced export log sales to an Indian log purchaser at the Port of Napier”, explains Peter Weblin, Chief Marketing Officer for PF Olsen. “The unpruned prices were $3-$5/JAS better than other export prices available, but the Indian market struggles to take pruned logs. On reviewing domestic options, Waitane was offering a good price for quality pruned logs. This resulted in a net return to the forest owner $20/tonne better than the only other domestic pruned log sales option available.

“The combination of the pruned logs going to Waitane and the unpruned logs going to an Indian log purchaser increased net stumpage by 25%”, explains Weblin. “However, this would not have been a comfortable position without PF Olsen Payment Protection.”

Regrettably, in late August 2016, Waitane Mill went into liquidation along with its major shareholder Verda. PF Olsen immediately initiated a process to minimise the loss and make an insurance claim. In early November a successful net insurance claim of $25,949.47 was paid out to the forest owner.

Forest owner Landcorp was a beneficiary of the above example. Gordon Williams, National Forestry Manager for Landcorp, recalls that he needed some persuading in regards to payment protection when it was first introduced to him. This is what Gordon has to say now: "We were relieved to have the PF Olsen Payment Protection in place. The claims process was tidy and timely - we are really happy."  Gordon goes on to say, "On two prior occasions I have been asked to approve sales of logs to purchasers considered higher risk. This is not an easy situation as I don't know the details and I put my reputation on the line. With PF Olsen Payment Protection this decision is made with more information and by financial experts."

Gordon Williams, National Forestry Manager, Landcorp