Millions invested by Northland wood processors

Millions being invested by Northland wood processors

Northland wood processors are investing millions of dollars to expand their production capacity, while international experts are endorsing the potential for wood processing in Northland.

One forest industry consultant recently identified Marsden Point as “the world’s most attractive place to build new wood processing plants.”

At least four Northland wood processing companies have expansion projects underway or recently completed. Another new sawmill is being planned for Ruakaka, while a new dry storage facility at Marsden Point will open up new overseas markets for wood processors.

These projects are in addition to the mill which is under consideration by Carter Holt Harvey.

Wood processors – sawmillers, remanufacturers and timber treatment plants – create products such as weatherboards, framing and structural timber, interior mouldings, flooring and panelling, and timber for use in high-quality furniture.

Processing logs increases their value many times over and Northland’s wood processors have the objective of ensuring that more processing takes place within the region, reducing the proportion of logs which are exported before value is added.

A recent survey of nine of the 14 members of the Northland Wood Processing Cluster showed that they generate a combined turnover of $142 million and exports valued at $65 million, and employ 530 people.

“There’s plenty of work around,” said cluster chairman Garth Mortensen. “The opportunities that are floating around are quite amazing and it’s just a matter of being able to capture it.”

He added that district and regional councils have an important responsibility to encourage the expansion of existing businesses, as well as attracting new employers from outside the region.

Mr Mortensen’s own company, Northsawn Lumber, has relocated from Whangarei to Ruakaka and installed a new finger-jointer, a treatment plant and a paint line to pre-prime timber, worth a total of about $550,000. A second shed is also under construction.

The new equipment will be running early next year, creating six new jobs in addition to Northsawn Lumber’s existing 12 staff.

Meanwhile, TDC Sawmills has recently announced that it has consents to build an additional sawmill at its Port Hills site. This will increase the company’s capacity for “green sawn” timber – which goes on to further processing, such as treating or kiln-drying – from the existing 100,000 cubic metres a year to 400,000.

The new mill, scheduled to be commissioned in October next year, will lead to more exports by TDC.

Northport is about to complete a new $2 million dry-storage facility at Marsden Point. Northport CEO Ken Crean says while the 5000 square metre clear-span shed replicates an existing facility at Port Whangarei, it will allow wood processors to link up with new markets and shipping operators that have not come to Whangarei previously because they require deepwater access.

“There are a couple of shipping operators simply awaiting the establishment of the dry storage,” said Mr Crean. “We are opening up new opportunities for the wood processing sector – new shipping services and new markets – where previously wood products have had to go out through Auckland or Tauranga. So there will be significant savings in transport costs as well as expanded markets.”

A recent article in NZ Forest Industries magazine identified Marsden Point as “the world’s most attractive place to build new wood processing plants.”

“There are numerous unique advantages – a major deepwater port, oodles of industrial land, major uncommitted wood resources nearby, the strongest wood in New Zealand, a mothballed power station that could be rebooted, industrial labour skills, etc,” wrote Dennis Neilson of DANA, an international forest industry consulting, publishing and investment firm based in Rotorua.

His views are shared by Michael Edgar of Global Forest Partners, a US-based timber investment management organisation. The company has US$1.3 billion of funds invested and managed in plantation forests in the southern US, Uruguay, Chile, Argentina, Brazil and Australia as well as New Zealand.

“When we look at opportunities throughout the Southern Hemisphere, it’s not common to find the same combination that Northland has – excellent resource, increasing availability and most of the infrastructure already in place,” said Mr Edgar. “What would really benefit the region and all the participants is the development of additional processing.”

Northland representatives will be attending a conference in Rotorua this month which aims to build a coalition of New Zealand exporters to work together in the China wood products market.

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