A renowned timber processing and treatment business whose products have been used by generations of farmers across the lower North Island has gone up for sale.
Located 10 minutes’ drive from Norsewood, in southern Hawke’s Bay, Ruahine Timber specialises in wooden posts and poles suitable for farm fencing, retaining walls, landscaping and sheds. It produces up to 90,000 posts annually, most of which it sells to farming supplies merchants.
Ruahine Timber also provides contract timber processing services for other businesses, including milling, planing for the likes of floor and weather boards, and timber treatments, and has considerable potential for further diversification and growth.
Established in the early to mid-1900s, the business is well known among farmers in the Hawke’s Bay and Manawatu regions with a reputation for supplying quality products.
The land, buildings and business sustaining Ruahine Timber, at 61 Thomson Street, Ormondville, Tararua District, are now being marketed for sale as a freehold going concern. The business is being offered with an asking price of $1,750,000 plus an estimated $250,000 of stock plus GST, through Rodger Howie of Bayleys Havelock North.
Ruahine Timber has generated consistent annual sales revenue over the past three years of $1.7 million, up from $1.3 million six years ago.
The business sale includes more than 4.2 hectares of rural-zoned freehold land and numerous buildings and sheds with a combined floor area of some 1,190 square metres which provide covered working and storage areas for staff and products.
Ruahine Timber also incorporates machinery for milling, post and pole peeling, planing, profiling and resizing timber.
Also included is an onsite autoclave steamer and chemical treatment plant.
Howie said this gave the operation a competitive advantage, as timber treatment plants are scarce in the North Island and those offering contract timber treatment services to other timber owners are rarer still.
Ruahine Timber’s treatment plant has seen a 40 percent lift in contract work over the past year.
The business employs six experienced staff along with two full-time owners.
“Key staff members who oversee the post peeling, autoclave and treatment operations have been with the company for many years. Their experience and operational expertise mean the owners can be away for extended periods and the business can continue to operate smoothly,” said Howie.
Howie said Ruahine Timber represented an excellent opportunity for a new owner to walk into a well-established enterprise with robust operating systems and infrastructure, secure sales turnover and good margins.
“The owners have invested in capital equipment over a period of 40 years. This includes autoclave steam and timber treatment plants and the upgrading of this equipment to meet increasing production demands. There has also been significant investment in timber processing machinery, conveyors, forklifts, loaders and trucks.
“Profitability is strong and there is the opportunity to further grow the posts business as well as expand the timber processing markets.
“Promoted largely by word of mouth through much of its history, there is the potential to scale up revenue quite quickly off the back of strategic sales and marketing.
“There is ample opportunity to further develop the sales of contract services which include all of the services and timber treatments. These services are provided to customers who own their own timber and need to have it reprocessed. Examples include flooring, yard timber, decking timber, tongue and groove and weatherboards,” said Howie.
As an established and successful operator in the burgeoning timber market, Ruahine Timber was well placed to capitalise on evolving supply-and-demand dynamics, he said.
“Demand for timber products from farming, horticulture and construction is high, and continues to grow. Reprocessing timber rather than sending logs overseas is seen as a growth industry.
“Ruahine Timber is superbly positioned to take advantage of this growth with few established competitors. There are very few timber treatment plants in the North Island. Fewer still offer contract timber treatment services to other timber owners.
“Meanwhile, due to the stringent resource consents, legislative obstacles and large capital investment required to set up a timber processing and treatment facility, there are prohibitive barriers to entry facing any new entity hoping to break into this market,” Howie said.