Carter Holt shareholders ask tough questions

By PAULA OLIVER forestry writer

Carter Holt Harvey will play a part in the sale of the Central North Island Forestry Partnership only if it "becomes a very good deal", says the company's evergreen chairman.

Speaking at the timber giant's packed annual meeting in Ellerslie yesterday, former All Black captain Sir Wilson Whineray and his chief executive, Chris Liddell, spent much of the morning reassuring shareholders that their team was trying hard to come up with new ways of beating weak markets.

But while they pointed to last year's purchase of the Tasman Pulp Mill as an example of a good buy, both men continued to play down the likelihood of a bid for the country's largest forest estate.

"We have a lot of trees already, and there's a wall of wood coming," Sir Wilson said.

Stung by a $34 million first-quarter loss last week, Carter's leaders repeatedly pledged to do all they could to lift performance.

"We expected it, but I don't think even we could have forecast that the market conditions in all of our major businesses would be at, or near, cyclical lows," Sir Wilson said of the first quarter.

"But, as we have demonstrated in the past, we can respond in a thoughtful, considered and progressive way."

Shareholders' questions shortly after demanded such a response.

Attention was drawn to the company's controversial log-buying strategy, which created huge stockpiles after logs were bought from third parties in an effort to lift prices.

The subsequent sale of the stockpiles at low cost affected the disappointing first-quarter result.

Asked if Carter Holt had stopped buying quickly enough when it saw problems arising, Mr Liddell was quick to reply.

"History will tell if we reacted quickly enough or not," he said.

"From our point of view we will continue to try new and different things."

Mr Liddell and Sir Wilson strongly defended staff salaries, and said they did not expect a significant recovery to be reflected in operations until the end of the year.

But improvement was showing in the company's culture surveys.

"When we first did this survey it was like asking the All Blacks to win without caring," Mr Liddell said. "That has changed."

He spoke of particular concern in the area of the company's waged employees, for whom change was "more threatening", and described a "worsening labour relations environment".

But he said Carter Holt was committed to New Zealand.

As an employer of 11,000, the company believed it had a big role to play in the country's future.