Commission clears wood industry applications

Fletcher Building has been given the go ahead to acquire the acquire the assets of Carter Holt Harvey's (NZSE: CAH) doors business while Nelson Pine can acquire Rayonier's MDF plant at Mataura.

In the Carter Holt Doors case the Commission admits the acquisition would give Fletcher Building a large share of the national market for the manufacture and importation of general-purpose wooden doors.

However it says FBU would also be constrained by the combination of existing competitors, potential competitors and the countervailing power of buyers.

Commission chairman John Belgrave says it is also satisfied that should Nelson Pine's acquisition of Rayonier MDF go ahead, the merged entity would be constrained by buyers and existing competitors.

"The buyers, who in this market are wholesale distributors and large manufacturers of kitchens and furniture, told the Commission that they are prepared to switch to different suppliers if prices or service quality changed.

"The competitors, Fletcher Wood Panels Limited and Carter Holt Harvey's subsidiary Canterbury Timber Products Limited, have the ability to increase the amounts of MDF that they supply to the New Zealand market. There is also some scope for importing MDF from Australia."

Nelson Pine is ultimately owned by Japan-based Sumitomo Forestry.

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