Secretive firm invests $100m in Gisborne mill

By KEVIN TAYLOR

A Malaysian-owned company plans to spend more than $100 million building a "world-class" sawmill in Gisborne, but details are sketchy because the company refuses to talk.

Economic and Regional Development Minister Jim Anderton said yesterday that the venture would be the largest wood processing plant in New Zealand by volume.

He praised the planned investment as the biggest single success of Industry New Zealand, the Government agency he helped to form more than two years ago.

Hikurangi Forest Farms, the New Zealand company behind the planned development, is fully owned by Malaysian company Samling Group.

Hikurangi said in a statement through Anderton's office that the efforts of Government and local agencies over the past two years in streamlining investment in the New Zealand forestry industry were appreciated.

But Hikurangi general manager Paul Ainsworth would not comment further and managing director Rob Hunter could not be contacted.

The sawmill will be able to make quality cuts of wood in big volumes.

Anderton said the venture would produce "hundreds of new jobs".

But exactly how many jobs and what the plant will process from the logs have not yet been decided.

The project manager for Industry NZ's wood processing strategy, Pelenato Sakalia, said the number of jobs would be known only when it was decided what the plant would make.

The plant would be a world-class sawmill producing many different types of sawn timber for the high-end of the market.

At full capacity it would process about 700,000 tonnes of logs a year.

That is more than three times the 200,000 tonnes processed annually by Gisborne's Juken Nissho plant.

A Business Herald forestry source yesterday questioned whether Hikurangi would get enough logs from its plantations without sourcing them from other forest owners.

The company owns about 27,000ha of forest on the East Coast, an industry minnow compared to a forestry giant like Carter Holt Harvey, which has more than 300,000ha planted.

But Sakalia said Hikurangi's forests were top quality and the firm would not need to buy logs from other plantations to feed the plant.

It would be built on industrial land in Gisborne, but the location, too, had yet to be decided.

Sakalia said the company would like to get the plant operational within two years.

Resource consent applications had not yet been filed, and would be only when what the plant would make had been decided.

Anderton's announcement followed confirmation this week of a deal which clarified the ownership of Port Gisborne.

The Gisborne District Council decided a few months ago to sell the port, a move which Anderton said threatened wood processing investment in the region.

The port needs a multimillion- dollar upgrade to handle the volume of wood projected to cross its wharves in the next few years, and Anderton argued the sale threw the development into jeopardy.

But Gisborne Mayor Meng Foon said this week that an agreement had been signed for the sale of the port's assets and operations to the Eastland Energy Trust, a council-controlled body.

Anderton said the new plant would be nearly double the size of Rotorua's Waipa sawmill.

"The new plant will be so large that it will process the equivalent of the volume of logs currently shipped out from the Gisborne port per year and will be three times the size of the largest plant in the region," he said.

The plant would address the "wall of wood" coming on-stream in the region.

It would offer the East Coast sustainable employment and economic development.

Over the next 20 years, the volume of logs and wood products coming from the region is expected to increase from its present annual level of fewer than 800,000 tonnes to about 4 million tonnes.

Julian Kohn, chairman of the East Coast Forest Industry Group, said the sawmill was a big boost for the local forestry industry and the region.

It also was an endorsement of the strategy to attract down-stream wood processing that Anderton, the local council and the East Coast forest industry had been working on for more than a year.

The Government plans to sink millions into upgrading the East Coast's roads in the next few years to handle increased logging traffic.