A Bay sawn timber firm has laid off 14 staff after its main overseas customer refused to pay higher prices caused by the strong New Zealand dollar. Frank Davis, managing director of Mount Maunganui-based Arbor Reman, delivered the shattering news to his 18-strong staff yesterday afternoon. He will keep the business operatingwith four people. Nine of the workers laid off had started on a second shift two weeks ago. Mr Davis said the NZ dollar had moved from 69c to nearly 75c against the US greenback over the last three months. "That's a 10 per cent increase in costs for our customers; the unfortunate fact is we have the stock but nobody wants it any more. The customers are fixed against the US dollar and they don't care what our currency is doing," said Mr Davis. Arbor Reman, just off Hewletts Rd, was established six months ago to precision cut kiln-dried sawn timber for exporting. A lot of the cut timber was used to make crates and pallets. Mr Davis built a 3000 sq m factory and invested $1.5 million in new plant and equipment. "We found a motherload of markets (in Asia, China, Middle East, United States), we were as efficient as anyone, but we have been priced out of reach pure and simply by the high NZ dollar," he said. Mr Davis also faced 50 per cent increases in power, rent and seafreight. From April 1, the cost of shipping one 40-foot container will climb from $800 to $1200. The crunch came this week when his main customer in the United States told him he would turn to South America for his timber stock. Arbor Reman had been sending up to eight container-loads a week to the US and planned to increase the business to 15 containers a week. Mr Davis added: "I may be seriously wounded but I'm not dead. We will keep looking for opportunities to move the stock."
