The middle man in forestry

By MIKE MATHER in Rotorua
Business Profile: Supreme Business of the Year winner

They have been confirmed as the best business in all of Rotorua, but the average Rotorua resident is likely to know little about PF Olsen and Company.

The winner of the supreme business of the year at the Rotorua Business Awards last week, the mention of Olsens had more than a few people sitting around the dining tables at the Rotorua Sportsdrome asking each other: "What sort of things do they do?"

"That did occur to me at the time that a lot of people there might not have known too much about us," chief executive Peter Clark said. "The best way of describing it is that forestry is a business. Most forestry owners are absentee and are not tied up with the day to day management of their forests. These are not just the smaller land owners but the bigger corporates as well."

Founded in late 1971 by the late Peter Olsen, the Ngongotaha-based company manages more than 125,000ha of industrial timber plantations, for numerous forest owners.

It has 45 staff based in Rotorua and more based in 10 offices around the country.

In January last year it took over management of much of the old Fletcher Challenge Forests in a deal with United States-based Prudential Timber Investments.

This year is the second time Olsens has achieved glory at the local business awards, the first being in 1996 when the company was the winner of the primary sector category.

Much has changed for the company in the intervening time, Mr Clark said, not least of which was a major flagging in the company's fortunes about six years ago, the time of the Asian financial crisis.

That was the time when Mr Clark, who had been with PF Olsen since 1979, took over as chief executive. Along with others in the industry, the company had also been attempting to persevere through some turbulent recent years of very high freight rates and a strong New Zealand dollar - both of which made for unfavourable conditions for exporting logs overseas.

"Putting it in a nutshell, we are in the business of optimising the value of forests. That means protecting them from physical risks, ensuring statutory compliance, environmental compliance and overseeing the health and safety of the workers. We are also technical advisers, we can oversee land acquisition, insurance arrangements as well as all aspects of silviculture.

"Olsens also acts as the agent for forest owners when it comes to engaging contractors. We are kind of the middle man there."

The company's win at the business awards was a timely recognition that forestry was still a major player in the Rotorua region, despite the prevalence of tourism in recent years, he said.

"The forestry sector makes up a third of Rotorua's economy and our own input is worth $4 million a month into [Rotorua's economy].

"It all flows through to wages, to goods and services and the rest of the town."

There was very little chance that forestry would ever be completely overshadowed by tourism or any other industry.

"Rotorua and the Central North Island industry is the most well served part of New Zealand for forestry. We have the best road infrastructure, apart from some parts of the East Coast, the best port, the best labour force, the best heavy machinery, the best logging truck consortium and, thanks to Scion and the Waiariki Institute of Technology, the best training and research to support the industry."

It was a healthy environment and Olsens was poised to take advantage of it, he said. An expansion into the Australian market was on the drawing board.

"The key is having a vision, he told the audience at the Sportsdrome on accepting the business of the year award. We have a vision of being a $100 million company within 10 years ... we have a really exciting time ahead of us.

"It's still early days, but it is no secret that we are actively seeking new clients there. There has been a very aggressive investment in Forestry in Australia. There were 100,000 hectares of new plantings there last year alone, as opposed to virtually nil in New Zealand. Their investments in blue gum projects are reaching harvesting age and they will be needing some experience assistance. There is also a dearth of firms that have invested in backroom systems, such as financial and strategic compliance issues."

For now, the company and Peter have been basking in the glow of their recent win.

"It's been very positive for staff morale, which was pretty high already and it has been great to get some very complimentary comments, some cards and phone calls from our competitors and other Rotorua businesses."