Woodchip plant goes on the block

Gisborne's $7 million woodchip plant - an important part of the region's forestry sector - has been put up for sale after losing its major customer, Marubeni, of Japan.

East Coast Pulp Processing owner Barry Caulfield said he was also selling his Wairoa sawmill, East Coast Lumber, and would be getting out of the forest industry after 30 years.

The Crimson Galaxy, the last ship to take chips for Marubeni, finished loading on Tuesday night, leaving the $7 million plant standing idle.

Marubeni had decided to pull out of the Gisborne area after failing to secure a long-term pulp log supply, Mr Caulfield said.

There had been ongoing problems with the depth of the channel and the export levy imposed by Port Gisborne for port redevelopment "sealed the deal". "What it has done for Marubeni is that Gisborne is no longer viable on the world market for wood chip," he said. "It is a major blow for this area."

His company had been exporting 100,000 tonnes a year.

But Mr Caulfield said his company had started out exporting this much and by now he had expected to be shipping 250,000 tonnes a year. As the volume grew in the area, however, the price had gone up.

"We could not grow with the area because we were struggling on the world market to be competitive.

"For some reason, pulp logs in Gisborne have been $5 to $10 a tonne more than anywhere else in New Zealand."

He said logging conditions in the East Coast area were more difficult than most others in the country. Logging, cartage and wharfage costs were all higher.

The company's plant would be put up for sale at the end of the month. There was interest from two people for continuing to run it in Gisborne, and from two companies looking to buy the plant and move it elsewhere.

Mr Caulfield said his was the only independent chipper in New Zealand.

The demand for woodchips remained, but international prices were at an all-time low.

- NZPA