Carter Holt Harvey

NOTOC

The company traces its history back ultimately to three namesake companies. The first of these was Robert Holt & Sons, a Napier based company founded in 1921 (though Robert Holt's steam powered sawmill began operations in 1872). The second was Carter Consolidated, whose sawmill ventures began under Francis Carter near Levin in 1896. Alex Harvey & Sons was the third – with humble beginnings manufacturing milk churns in Auckland. On 1 April 1969, Alex Harvey & Sons entered a three way merger with LJ Fisher Co, a steel roof tiles manufacturer, and the New Zealand activities of Australian Consolidated Industries, a diversified conglomerate. The result was Alex Harvey Industries – a sprawling corporation encompassing operations in glass, plastics, steel, wood and paper products. Sir Richard Carter, a great grandson of Carter Consolidated's founder Francis Carter, led the combined company. (nearly NZ$850 million in 2016). This made Carter Holt Harvey, by a comfortable margin, the largest company in New Zealand. However, with CHH burdened by debt from the massive purchase, American International Paper took the opportunity to purchase a 16% stake that year. Their stake gradually increased until a controlling interest of around 50.5% was finally acquired in 1995. Carter Holt Harvey was listed on the New Zealand Exchange with International Paper as the controlling shareholder until 2005. The company, as of 2005, had over 10,000 staff, forestry assets, diversified wood, pulp and paper manufacturing plants and retail operations across Australasia, as well as several Chinese factories. They formerly were involved in consumer products, with leading positions in the Australasian market for: tissues and paper towels, under brands such as Purex, Sorbent and Handee; nappies, under the Treasures brand; and hygiene products such as Libra pads and Tena incontinence products (under Sancella, a 50–50 joint venture with SCA). The consumer operations, with 2004 sales of approximately NZ$765 million, was sold to Swedish Svenska Cellulosa Aktiebolaget (SCA) for NZ$1 billion in 2004. The then fourth largest listed company in New Zealand by market capitalisation was taken into private hands by Rank Group Investments Limited, controlled by New Zealand's richest man, Graeme Hart. The lock in offer of NZ$2.50 per share for International Paper's 50.5% stake valued it at around NZ$1.65 billion, with the company valued at approximately NZ$3.5 billion. Carter Holt Harvey's last year in public ownership involved a 77% drop in net profit, which the company blamed on challenging trading conditions such as difficulties in export markets, the strength of the New Zealand dollar and rising freight costs. The sale was completed that year and Carter Holt Harvey entered a new era under private ownership.

Carter Holt Harvey has been significantly downsized since its reign as New Zealand's largest company ended in the 1990s. The splitting of the company reached its heights under the control of Graeme Hart, after 2005. Barely a year after being taken private, 250,000 hectares of Carter Holt Harvey's 290,000 hectares of forest land was sold to American forest manager Hancock Timber Resource Group (controlled by Canadian investment manager Manulife Financial). The forests, with an estimated book value of NZ$1.5 billion, were located in Northland, Auckland, the Central North Island, the Hawke's Bay and Nelson. Its dairy farming and other properties were also sold separately for approximately NZ$500 million. In 2014, Carter Holt Harvey Pulp & Paper, encompassing the Australia and New Zealand packaging business, Kinleith Mill, Tasman Mill and the Penrose paper mill, were sold to a Japanese joint venture between the Oji Paper Company, one of the largest pulp and paper manufacturers in the world, and the Japanese government backed INCJ. The new company name is Oji Fibre Solutions. Oji already had operations in New Zealand, with investments in Hawke's Bay forestry assets under the PanPac Forests name as far back as 1971 (with over NZ$180 million of investments into PanPac since then, including a major upgrade in 2012). The NZ$1.04 billion sale was announced at the end of April 2014, with the consortium taking full ownership of the assets in December that year. An initial public offering on the New Zealand Exchange was tipped for Carter Holt Harvey around April 2015, which, at an estimated valuation of NZ$1 billion, would have made it the largest flotation on the NZX that year.

As of April 2015, Carter Holt Harvey consists of three divisions – Woodproducts New Zealand and Woodproducts Australia, manufacturers of timber based building products estimated to have about 50% of the structural timber market in New Zealand and 30% of Australia's – together with heavily trade focused building supplies chain Carters, with approximately 50 outlets operating in New Zealand selling a wide range of products targeted at builders. The New Zealand Herald, in an April 2015 article, estimates Carter Holt Harvey to have around 5,000 employees and an annual revenue of roughly NZ$2 billion. It operates four milling sites in New Zealand – in Tokoroa, Kawerau, Nelson and Whangarei – as well as two Australian mills, in Yarram, Victoria and Caboolture, Queensland, and nine frame and truss plants. It was, ahead of a planned initial public offering in 2015, valued at potentially NZ$1 billion, which would not put what was formerly New Zealand's largest company in the top 20 by market capitalisation today (the smallest market capitalisation on the Standard & Poor's/New Zealand Exchange 20 index as of 2016 was approximately NZ$1.5 billion).

Alkyl Ammonium Chloride (AAC) was developed by the Forest Research institute as a more environmentally friendly option to the Copper Chrome Arsenate (CCA) which was the preservative typically used to treat timber used in outdoor structures such as decks, sheds, barns, etc. Approved by the Timber Preservation Authority it was used between 1979 and 1985 with Carter Holt Harvey its biggest user. Others were Pinex Timber Products Ltd (a subsidiary of CHH) and Prolog Industries Ltd (the processing branch of the state owned New Zealand Forestry Corporation). Unfortunately once in use it was found to unsuitable for use with some timber failing within five years.

In 2013 the Ministry of Education launched a legal action against a number of cladding manufacturers due to issues with building cladding allowing water to leak into school buildings. Confidential settlements were subsequently reached with Australian manufacturers James Hardie and CSR, but Carter Holt Harvey fought to have most of the claim struck out as it was outside of 10 year limitation period set by the Building Act 2004. When this was rejected by the Supreme Court with costs being awarded against CHH, the case proceeded and is due to be heard in court in 2020. The Ministry wants Carter Holt Harvey to pay all the costs associated with removing and replacing faulty Shadowclad cladding on approximately 800 buildings, with the estimated repair bill reported as being between NZ$1 billion and NZ$1.3b. In 2014 the Fair Go television program found 24 property owners who believed they had been supplied faulty or substandard Shadowclad material.