Chinese investors sought for sawmill

CATHERINE HARRIS
Last updated 05:00 17/06/2013

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Chinese investors are being sought to back a huge sawmill project in the central North Island.

The concept of a "mega-mill" is being floated to a potential consortium of investors by Taupo District Council and New Zealand Trade & Enterprise.

The council has sister-city links with the Chinese city of Suzhou.

Will Samuel, the council's business development manager, said talks were "still exploratory" and the council's role was purely as a facilitator.

All regions across the central North Island were asking how they could get more value out of the flood of logs leaving the country, he said.

An alternative to building a new mill was co-ordinating excess capacity at the region's many sawmills.

China is now New Zealand's biggest export destination for wood products and a close second to Australia for sawn timber.

As New Zealand's wood harvest rises, forest industry players have called for further investment in the processing sector to give it the necessary scale.

For investors, the central North Island area has several attractive features with almost a third of the country's plantation forests and a good infrastructure already in place.

But its biggest advantage is likely to be its geothermal power, says Glen Mackie, the Forest Owners Association's senior policy analyst.

"China has started to flag that it's having energy issues and may start to ration energy to certain sectors."

There was plenty of wood, "but it still has to be proven to be economic to process the lumber in New Zealand and ship it to China and compete against other lumber suppliers".

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- BusinessDay.co.nz

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