Port of Tauranga today announced its subsidiary Quality Marshalling Limited lost a major log marshalling contract at Mount Maunganui and Murupara resulting in a loss in share price today.

The revenue loss represents approximately 60 per cent of Quality Marshalling Limited's revenue at the time of acquisition, Port of Tauranga chief executive, Mark Cairns told the NZ Stock Exchange today.

Logging work at Port of Tauranga.

While the outcome of the competitive tender process is disappointing, Mark says there is still remain significant growth opportunities for Quality Marshalling in New Zealand.

The Port of Tauranga announced it was paying $34million for the second largest log marshalling and handling company in the country on December 12, 2012.

The purchase became effective from February 1, 2013.

The port company bought Quality Marshalling off Ken Holmes, and Mark Cairns commented at the time that QM has a long serving staff with a can-do approach to customers and a strong focus on innovation.

Ken recognised the close alignment between the Port of Tauranga and Quality Marshalling and made the choice to sell Quality Marshalling to Port of Tauranga, says Mark.

Shayne Jenkins, who has more than 20 years' experience in the forestry export sector, became General Manager of Quality Marshalling upon settlement and took over the leadership of the business from Ken, who was to remain associated with the company in an advisory capacity, PTL announced in December.

Quality Marshalling's revenue for the 2012 year was $18million. At the time of purchase Quality Marshalling handled about 2.5million cubic metres of logs at Mount Maunganui and Northport. It also has operations at Kopuriki Log Yard, Murupara, Waipa Sawmill, Kaingaroa, Napier, Auckland.

Between now and when the contract expires on January 1, 2014 the port will attempt to secure other marshalling contracts locally and nationwide.