Benefits of Investing in Kawerau Explored

9th July 2013

Benefits of Investing in Kawerau Explored

The ISKawerau group has commissioned Scion to produce an analysis of wood processing opportunities in Kawerau.

This analysis will look at the benefits of wood processing in Kawerau, where delivered log costs are expected to be lower than many NZ locations and energy costs can be reduced by the incorporation of geothermal heat. It will also assess the impact of clustering complementary technologies compared to stand alone operations.

In addition to investment metrics, such as Return on Capital Employed and EBITDA, the study will measure the effect increased wood processing will have on both employment within the District and the GDP of the local economy.

“This is an important study for Kawerau and the Eastern Bay of Plenty because it will provide quantifiable information to support investment propositions for industrial development in the district.” Su Cammell, Project Manager of the Industrial Symbiosis project explained. “The recent release of the WoodScape study which was developed to evaluate potential opportunities for investment in traditional and emerging wood processing opportunities has been the catalyst for this analysis.”

The initial WoodScape study looked at five wood supply regions to understand the different wood processing options in these regions and took a financial modelling and market review approach in assessing the potential of a range of traditional and emerging technologies. This base data will be layered with Kawerau specific information to provide comparisons between Kawerau and other operational centres and regions.

Dr Michael Jack, Scion’s Science Leader for Clean Technologies and co-author of the original WoodScape Study, described the Kawerau project as a practical extension to the initial work. “The Woodscape model is a valuable tool for investors because they can use it to identify investment and employment opportunities that are region or site specific.”

The NZ Government’s Growth Strategy targets a rise in exports from 30% to 40% of GDP by 2025. In today’s terms this means an increase of $20B. Enabling growth in the wood processing industry will play a substantial role in meeting these targets. The WoodScape results show that the Central North Island (CNI) has by far the biggest forest resource of any region in New Zealand and due to its ability to support large scale wood processing facilities, has the potential to make a significant contribution.

ISKawerau’s aim to reduce unemployment in the District to below the national average through increased investment in the sector is something Mayor Malcolm Campbell welcomes. “Kawerau’s potential is largely untapped.” Mayor Campbell said “This study will highlight our resources and infrastructure and our ability to service industrial growth. Higher levels of employment due to increased development will have a positive impact on both Kawerau and the wider Eastern Bay.”

Toi EDA, the Eastern Bay of Plenty’s Economic Development Agency, supports the analysis. “This is an important step in the development of the wood processing industry” Chairperson Tony De Farias said. “The study will provide potential investors in the wood processing space with clear information on the benefits of establishing their operation in this region.”

It is expected the results of this study will be available in August 2013.

About ISKawerau
Industrial Symbiosis Kawerau is an industry/community based economic development initiative focussed on developing new investment opportunities in waste management, bio based products, food production, forestry/wood processing and geothermal energy industries. The initiative instigated by a partnership between NZTE and Kawerau District Council is built on developing sustainable interconnected businesses that intrinsically balance social, environmental and economic imperatives.

www.embracechange.co.nz

About WoodScape
WoodScape is a national-level financial modelling analysis and market review to assess the potential of a range of traditional and emerging wood processing technologies. The WoodScape study was commission by Woodco to identify pathways forward for the sector to realise its strategic aim of increasing the volume of wood processing in New Zealand and doubling exports to $12 billion by 2022.

ENDS

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