Chinese company looks to add value to New Zealand forest exports

WELLINGTON -- A Chinese company is looking into building a state-of-the-art wood processing plant that would assuage New Zealand concerns about the lack of value added to its timber exports.

Fenglin Wood Industry Group, based in Nanning, capital of South China's Guangxi Zhuang autonomous region, is carrying out a feasibility study on building and operating a highly advanced sawmill in the central North Island, it emerged Thursday.

"The estimates are around 250 jobs and a $250 million investment to build the plant using world class state of the art technology," said Fritz Frohlke, general manager of the Enterprise Great Lake Taupo development agency.

Enterprise Great Lake Taupo, Taupo District Council and the government's New Zealand Trade and Enterprise agency are this week hosting Fenglin Group senior managers and an inter-agency delegation led by China's Ministry of Commerce.

Enterprise Great Lake Taupo had for two years been seeking a commercial stakeholder to undertake an in-depth feasibility study to construct and operate a world class sawmill, producing laminated veneer lumber and medium density fibreboard, in Taupo, Frohlke said in a statement.

The Fenglin Group feasibility study was due to be completed by early 2016.

Fenglin Group chairman Cui Jianguo said the project would be "a true win-win deal for both New Zealand and China."

"New Zealand wins as we would process these logs onshore here rather than in China. This would add more value to the product before it is shipped, generating more money into the local economy and creating jobs," Cui said in the statement.

"China wins as we will have a higher quality product as radiata pine is far superior to the eucalyptus that we currently process," he said.

"The environment also wins. This plant would process the raw materials in a sensible and sustainable way. By having multiple processes together at one site, we maximize the raw material, achieving optimal utilization of the valuable radiata pine."

Taupo, considered the "wood basket" of New Zealand, was located on one of the world's largest geothermal fields, which provided low cost thermal and electric energy, Taupo Mayor David Trewavas said.

"About half the logs that leave New Zealand have not had any value added and most of those go to China," Trewavas said.

Figures from the Ministry for Primary Industries in June showed that unprocessed logs accounted for almost 46 percent of all New Zealand forestry exports, with China taking 70 percent of log exports.

The mass export of logs has become a political issue in recent years as New Zealand sawmills have closed.