From the chief executive: Red Stag's Marty Verry on business and our economic future

Red Stag chief executive Marty Verry. Photo / Supplied

The economic effects of Covid-19 and New Zealand's subsequent nationwide lockdown have been felt far and wide by our business community. Journalist Stephanie Arthur-Worsop asks Red Stag chief executive Marty Verry to reflect on his own company's survival and what he thinks needs to be done to help the local economy bounce back.

How has the Covid-19 pandemic affected your company?

Sawmills were not considered essential but during the last two weeks of alert level 4 Red Stag opened to supply the wooden pallet industry.

This was essential to ensure Zespri and other horticultural producers could move their produce to local and export markets.

There is a degree of normality now which we expect to continue for another month or two while building projects that were already in place are completed. As framing timber producers, Red Stag is fairly early in the build processes so others like painters, gardeners, and tradespeople will likely see a reasonable spring.

Come summer, the level of government building will ramp up but nowhere near the reduction we will be seeing from the private sector due to immigration stopping and low confidence. That will be a great time to build for those unaffected by Covid-19.

What are you doing to ensure the company survives the pandemic and/or thrives after it?

Years of investing in technology and maintaining a prudent cost and debt structure will pay off at this time.

The company has high productivity and would be the lowest cost producer in New Zealand, which puts it in a strong position.

Several smaller and medium-sized mills, or inefficient mills, have prospered in the good times but as we saw in the Global Financial Crisis, a tightening market or banker concerns can lead to closures.

Red Stag is well-positioned to pick up market share, meaning the downturn may affect the company less than the overall market trend, and mean the recovery is earlier and faster.

This is good for Rotorua, our employees and our suppliers. It will make the region's economy more resilient long-term.

What are the benefits and challenges of running a business in the Bay of Plenty?

For our business, the benefits are numerous.

Firstly the CNI region has the largest forest resource in New Zealand and it is run by professional, long term thinkers, meaning we can invest in world-scale processing operations.

We also have a very skilled, loyal and stable workforce that's committed to our company missions to be the best in the industry, and to solving climate change by massively transforming the use of wood materials in the bioeconomy of the future.

Location-wise, we are also very well positioned with an efficient port, pulp mills to take our wood chip, and easy access to the "golden triangle" population growth region of Tauranga, Auckland and Hamilton.

What do you believe should happen in order to revitalise and rebuild the local/regional economy?

My main concern is tourism, and it's great to see New Zealanders hitting the region en masse during the long weekend.

The transtasman bubble should be a priority and this is a perfect time to re-initiate flights direct to Rotorua. I really hope our mayor and tourism agencies are working on that with Air New Zealand and the Government.

On the forestry/wood processing side, wood first or Carbon Zero Construction procurement policy adoption by Government will support jobs and trigger investment. If embraced fully, it could mean building structures in New Zealand can be carbon zero by 2030, instead of 2050.

We're hoping central and local governments recognise their transformational role in this green re-set opportunity.