NZTE probes wood fibre supply concerns for proposed $180M Chinese plant in Kawerau
By Tina Morrison
Sept. 8 (BusinessDesk) - 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.
ENDS