New port marks new beginning

By PAM GRAHAM

MugCaption1: Chris Liddell
Frustration will tinge celebration for at least one of the 250 guests at the opening of Northland's new port today.

Carter Holt Harvey chief executive Chris Liddell, who has forests ready for harvest in the region, sees it as a project that will add just "single millions" of dollars to his company's earnings from them because other infrastructure - railway links and added-value processing plants - are missing.

The frustration, he says, is that the company and the country could earn much more from New Zealand's huge forestry opportunities if a growth mindset is adopted.

Today, Chris Liddell and Prime Minister Helen Clark will say the Northport, at Marsden Point southeast of Whangarei, is a significant milestone. And it is.

The old port was silting up and faced closure within two years. A vision of sending logging trucks to Tauranga loomed.

Instead, Northland Port brought in Port of Tauranga as a Northport partner, and Carter Holt agreed to put one million tonnes of products through the port each year, for five years, in return for a third share of the operating company.

Construction of the $65 million project, which took three years to get resource consent, started in December 1999.

So far, 1.7 million cubic metres of sand has been dredged from the harbour to form 32ha of the 52ha site. In June, the construction site became an operating port when the first vessel called.

Northport general manager Ken Crean says the weather forecast for today is the same as it is in the region 365 days of the year: "Brilliantly fine. There are no contingency arrangements required."

Carter Holt's Liddell wishes he could forecast an equally bright profitability for Northland's newly mature forests.

Instead, he raises the question: Is it enough to export them as logs and not as value-added products?



"The country has a huge opportunity, the forestry industry is a huge part of that opportunity and Northland is a significant part of that forestry opportunity," he maintains.

For its part, Carter Holt has invested $132 million in a laminated veneer lumber mill at Marsden Pt, and it is currently ramping up.

Liddell says his message to the seven Cabinet ministers who met business leaders yesterday to discuss how to get New Zealand into the top half of the OECD growth tables is: " ... be more inspirational and action-oriented. . In order to export, we need to have a growth mindset. We have to embrace that as a concept."

Northport's Crean agrees there is still a lot of work to be done in Northland.

"The combination of a roading infrastructure which is not designed to cope with a large amount of trucking and the lack of rail through to the new port does, to a degree, continue to hamstring industry," he says.

The Northland Regional Council and Whangarei District Council have funding to study a rail link to the new port.

This week, the Government said Transfund could fully pay for land transport in Northland and East Cape from a $30 million kitty.

Liddell would prefer that trains haul the central North Island's forest crop to the big pulp and paper mills.

Every year, he says, Carter Holt Harvey spends $200 million a year upgrading existing facilities, mostly in New Zealand, and any new investment has to earn more than its 11-12 per cent cost of capital.

Existing facilities such as the Kinleith mill were miles below returning the cost of capital, in part because of weak markets. "We're not short of markets, we're not short of trees - the issue is whether we process them or not."