At a time when a building boom has put pressure on the lumber supply, Red Stag helps ensure that the nail always gets through.
It’s no secret there’s a housing shortage, and that the subsequent scramble to build places for people to live and work has put pressure on the industry and the lumber supply. Companies like Red Stag work steadily to ensure ITM customers have the timber they need, when they need it. Red Stag has a relationship with ITM that goes back to 2003, when the Waipa Mill was purchased from receivership by Phillip Verry and his son Marty Verry, and the new company was formed.
Investing in the future
Does the current pressure on timber supply mean we’ve mismanaged our timber resources? Dave Butler, Red Stag’s marketing manager, believes not. “I think the industry has been pretty much on the button to this point in terms of supply and demand, but rapid change can’t be catered to immediately,” he says. “It’s a capital-intensive industry that requires plants and equipment, so if there’s a major change it takes a while to bring in new equipment to increase production.”
Red Stag has done just that, investing ahead of demand since starting its upgrade programme in 2006. It’s that kind of commitment to the industry – and to ITM – that has helped Red Stag go from nowhere to number two in the structural timber market in less than 15 years.
Dave says that over time the company’s site has totally changed, and that most of Red Stag’s earnings are reinvested in development with the aim of ramping up production to ensure the timber supply keeps flowing and quality is best-in-market. “Three or four years ago we spent $60 million on a new sawmill,” Dave says. “It’s probably the most advanced sawmill in the world; everything is state of the art.”
That’s not Red Stag’s only big-ticket purchase. Dave points to other developments and reveals that a $40 million cross-laminated timber (CLT) plant is currently being commissioned.
“ITM is very much the same as us."
Multi-million dollar spends indicate confidence in the future, not just of Red Stag but the industry. However, while Dave admits that investing in technology is crucial, he says that’s only part of maintaining a successful timber business.
It requires common sense and, more importantly, relationship maintenance. “In the fast market we have now it’s tempting to open the doors and say, Bring on the customers!” says Dave. “But that’s going to jeopardise service levels, and we won’t go there.
We have a number of very strong ITM customers who have been with us for many years and we choose to recognise that loyalty.”
ITM and Red Stag haven’t simply worked together for a long time; Dave says there’s compatibility in how the two companies see business. “ITM is very much the same as us: they are independent and we are independent; we recognise and understand each other, and we think and plan for the very long term – intergenerationally. We’d rather satisfy the demands of loyal customers ahead of short-term gains.”