Sharechat Logo

NZTE probes wood fibre supply concerns for proposed $180M Chinese plant in Kawerau

Friday 8th September 2017

Text too small?

New Zealand Trade and Enterprise, which has encouraged a Chinese company to invest in a $180 million wood processing plant in the Central North Island to boost regional development, is now looking into whether there is enough wood fibre available to supply the plant following concerns from local industry.

China’s Guangxi Fenglin Wood Industry Group announced plans earlier this year to establish a plant in Kawerau by 2020 to produce 600,000 cubic metres of panel boards a year and generate 100 new jobs, at an expected cost of $180 million.

However, the Wood Processors & Manufacturers Association of New Zealand has raised concerns that timber mills in the region don’t produce enough wood fibre to supply the proposed plant as well as existing big pulp mills of Kinleith in Tokoroa and Tasman in Kawerau, which are owned by Japan’s Oji Fibre Solutions. Fenglin’s proposed plant is expected to initially produce particle board and later expand to medium-density fibre board (MDF).

The WPMA “very much welcomes” overseas investment in the New Zealand wood processing sector, said chief executive Jon Tanner. However, he noted “it is important that this investment is directed to regions where there is not an already constrained wood fibre supply.”

NZTE confirmed to BusinessDesk that it has commissioned Finland forestry consultancy Indufor to provide baseline data on levels of wood fibre available for processing in the region for industry stakeholders.

NZTE general manager of investment Dylan Lawrence said the report will investigate the current and planned harvest levels of timber, the current annual volumes of pulpwood and residues, as well as planned production and consumption levels in the industry.

The report is expected to be completed near the end of this year and NZTE will publish a high-level summary of the findings, Lawrence said.

Fenglin’s planned investment in Kawerau was hailed as a huge benefit to the district by Mayor Malcolm Campbell when it was announced in April, who noted the area had traditionally faced a shortage of job opportunities.

Founded in 2000, Fenglin and was one of the earliest engineering board manufacturers in China and the first in Guangxi Province, according to its website. Listed on the Shanghai Stock Exchange, Fenglin has three MDF plants and one particle board plant in China with total capacity of 810,000 cubic metres a year, and also owns about 14,000 hectares of forests to secure wood supply.

With plants in China’s Guangxi and Guangdon provinces, the company said it began to explore more international opportunities from 2015.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar falls on news RBNZ is looking at "unconventional" policy
Wrightson capital return gets shareholder approval
Morrison & Co eyes asset sales from first PIP Fund
Improved transmission pricing may save $2.7 bln - Electricity Authority
Precision Foundry receivers say no money for unsecured creditors
23rd July 2019 Morning Report
NZ dollar tad weaker, ECB, Federal Reserve in focus
MARKET CLOSE: NZ shares outperform Asia as exporters gain; Sky leads market higher
Significant shortfall for subbies in Ebert receivership
Transpower sees no risk to credit metrics from incentive change

IRG See IRG research reports