While the value of City Forests' $9.1 million Milton sawmill has been written down to $3 million, the company has no regrets being out of the sawmilling market, which is showing signs of revival.
The closure of the sawmill was announced in April 2012, because of an untenable 20% revenue decline for City Forests at the time, with the loss of about 30 jobs.
Craigpine Timber took a five-year lease on the mill, and employed at least 10 of the affected staff.
City Forests chief executive Grant Dodson said when contacted it was a well-considered attempt to diversify into sawmilling, but ultimately ''the US market fell over, virtually weeks after opening''.
Mr Dodson said 39ha of farmland had been initially purchased for the project and City Forests was about to start marketing 30ha for sale, which could raise around $500,000.
Given sawmillers were successfully exporting to the US again, Mr Dodson was asked if he regretted not still having the Milton sawmill working directly for City Forests.
''No. I don't regret not being in the sawmilling market.
''It's a low [profit] margin and hard work. Our primary expertise is log growing,'' he said.
Since opening more than six years ago, during each of the (two) most recent financial years the sawmill depreciated in value by $3 million, and at the end of the year to June its book value was just above $3 million.
City Forests chairman Ross Liddell said it suited City Forests to have the sawmill leased to Craigpine, with four more years to run, and also because it was selling its ''best quality'' logs to Craigpine for processing.
When quizzed on City Forests going into sawmilling, Mr Liddell said it was ''poor timing'', in that the global financial crisis struck at the time and US demand ''dried up''.
''The market just worked against us that time,'' Mr Liddell said.
In cutting 302,000cu m from its forests this year, City Forests was 10% above its long-term sustainable cutting level, but Mr Dodson defended that decision.
''The marginal over-cut is the right thing to do when there's a strong market, and has only a minimal impact on the long-term harvest levels,'' he said.
Safety issues in the forestry sector across the country, including severe accidents and deaths, has been under increased scrutiny during the past two years.
Mr Dodson said while the 70-80 contractors used year-round were technically not direct employees, he highlighted safety certification with the Forest Stewardship Council, and improved safety across all operations during the past year.
''There was not a single 'severe accident' recorded across operations this year. We want everyone working for us to be safe,'' he said.
