Nelson Pine plant grows

By LIBBY MIDDLEBROOK

Foreign investment in the timber industry is blooming, with an $80 million lumber processing facility to be built in Nelson next year.

Japanese-owned Nelson Pine Industries will begin building a laminated veneer lumber plant late next year, to process about 200,000 cu m of radiata pine a year.

Nelson Pine is a subsidiary of Japan's largest forestry company, Sumitomo Forestry, which has invested at least $215 million in South Island sawmilling facilities since 1986. The company's new plant will process thin veneers of radiata into a substitute solid wood using hot-press processes.

"All of our investments have been driven by market demand, and laminated veneer is a large growing market for us," said Nelson Pine chief executive Murray Sturgeon.

"The mature infrastructure of the Nelson region in terms of wood supply, transport, electricity, engineering, resin supply and labour are more than capable of supporting this investment."

Sumitomo's decision follows an announcement from United States building products company Brightwood last year that it planned to build a multimillion-dollar sawmill on the west coast of the South Island.

Carter Holt Harvey is also in the process of constructing a $100 million laminated veneer lumber plant near Whangarei.

Mr Sturgeon said Sumitomo had been encouraged to invest further in New Zealand because of an estimated 19 million cu m increase in the forestry harvest during the next two decades. Asia-Pacific and North American demand for processed wood products was also on the rise.

He estimated that the new development would pump an extra $200 million into the economy each year on top of the extra revenue it would generate for Nelson Pine.

"We've done exhaustive market research and that's given us the confidence to go ahead with this development," he said.

Nelson Pine is already the world's largest producer of medium-density fibreboard, a wood product manufactured from low-quality timber chips, processing about 800,000 cu m of radiata each year. It employs 165 people now and the new laminated veneer facility will create up to 50 more fulltime jobs.

Nelson Pine, which had gross operating revenues of $145 million last year, owns about 5000 hectares of forest in the South Island.