Mowbray patriarch who eyed up Whakatāne mill glad it's saved

Tuesday, 1 June 2021

Harry Mowbray, who has a passion for saving heritage buildings, is also a specialist engineer who wanted to save Whakatane mill.

Whakatāne’s packaging mill has been saved by an Irish-led consortium – and that’s just fine by the local guy who considered buying it.

Harry Mowbray, a local farmer, forester and father of the Mowbray siblings who founded Zuru Toys, says the outcome is a good one.

“One of my main drivers was to save the mill and the jobs, so the fact another company has come and been willing to do that, I’m pretty happy with that.”

Mowbray is a consultant engineer who has specialised in paper mills for 45 years and knows the mill well – enough to know it and the 210 jobs it generated could be rescued.

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Energy Minister Megan Woods told Parliament in April she was taking the situation in the electricity market very seriously.

Unlike newsprint, which is a fading industry, pulp products are in demand, particularly folding boxboard, which the mill was designed to manufacture.

“It’s a product that is growing rapidly in the world,’’ Mowbray said.

The 80-year old mill is Whakatāne’s biggest employer, with many others contracting to it.

But deep pockets were required to switch the mill away from its current focus on liquid packaging.

Mowbray estimates that it will take $100 million of investment to make it competitive again.

The successful owner is Power Paperboard Ltd, a consortium of European and local investors, led by Dr Dermot Smurfit, whose family created Jefferson Smurfit Group (now Smurfit Kappa), one of the top packaging companies in the world.

Power Paperboard is equally split between Smurfit, Swiss-based Raymond Alan Dargan and Ross George, of New Zealand's Direct Broking.

Its Australian-based chairman, Ian Halliday, who has worked with Smurfit for many years, said the revamped mill would need a smaller staff of 160 to 170, but some people were already considering taking redundancy.

Unions said one of the clinchers for the Smurfit deal was the retention of skilled staff to help keep the mill going.

Power prices here are double what they are in parts of Europe, Ian Halliday says.

It was a close run thing. The vendors, Swiss-based SIG Combibloc, signalled the mill would close on June 21, and Halliday said he was not aware the mill was up for sale until March’s announcement.

Unions had been “very supportive,” he said.

Smurfit and his colleagues have developed a track record of turning mills around, particularly in packaging powerhouse Finland.

But Halliday ruled out rescuing the ailing Norske Skog newsprint mill in nearby Kawerau, which is considering closure.

He was also well aware the consortium was stepping into a market with high energy and wood costs.

“Actually the biggest cost base is pulp and that’s going through a resurgence of pricing at the moment as well, which is difficult but we think it’s cyclical.”

Electricity prices here were double what they were in Finland and another concern was the price and supply of gas.

“I think that’s a concern for most industries in New Zealand today. What the solution is there, I’m not quite sure.

“But we’ve got a couple of projects in mind, and towards the longer term, we would have a biofuel burner that would burn wood waste which at the moment goes to landfill.”

New Zealand’s timber prices were also “extremely high, it’s probably close to double what you would pay for it in a European context.”

Nevertheless, as the only folding box board manufacturer in Australasia, “we will make it very successful”.

Meanwhile, having reached his key objective for the mill, Mowbray has plenty of other projects to keep him busy, including creating a village of heritage buildings south of Hamilton.

“I’m towards the end of my life rather than the beginning of it, and it’s not as though I haven't got 101 other things going on,” he said.