Billion-dollar plans for the upgrade of Kinleith Mill

Wednesday, 9 August 2023

Forestry Minister Peeni Henare is calling plans for a billion-dollar upgrade and expansion of the Kinleith Mill a “game changer” for the South Waikato, and for New Zealand’s forestry industry.

A joint report proposes upgrading Kinleith Mill’s energy infrastructure and building a new large-scale sawmill to supply timber and bespoke mass-timber products, which could provide hundreds of jobs and boost the nation’s economy by more than $500 million a year.

The mill is owned by Oji Fibre Solutions, which carried out the study with Te Uru Rākau – New Zealand Forest Service.

Oji chief executive for Australia and New Zealand, Jon Ryder said the project could be a significant transformation for the company and the region, but more investigation needed to be done.

“The scale of the project is at least $0.9 billion, but this could expand to nearly $1.7 billion depending on the findings of further feasibility work.”

He said the aim was to upgrade to the mill’s energy infrastructure, using more biomass for energy, and eliminating the use of natural gas during processing.

“In addition, a modern sawmill will be integrated into the pulp mill.

“This will process at least one million logs per annum and include a facility to make high-tech engineered lumber.

“The sawmill integration will provide wood chips for the pulp mill and take steam and electricity in return.”

Henare said the study found the project could reduce yearly greenhouse gas emissions by 65,000 tonnes of CO2-equivalent and had the potential to divert roughly 150,000 tonnes of urban wood waste from landfill.

“Such a big project will inevitably involve many further studies before deciding to build,” Ryder said.

“We are encouraged by the findings of the initial work announced by the Minister, but decisions on progressing to the next steps are yet to be made.

Ryder said further Government collaboration would be important and “the challenge for the Government is to find ways to attract the investment it wants”.

“Oji has a great track record in New Zealand, with over 40 years of investing here, including hundreds of millions of dollars in recent years, so I believe this is the right company to spark the transformation of the bio-economy in this country,” Ryder said.

Henare said Kinleith Mill, which employs more than 500 people, is a key strategic asset for Aotearoa New Zealand, and one of the country’s largest industrial sites.

“It requires some upgrades of its energy infrastructure to remain competitive, and this presented an opportunity for Government to partner with Oji to investigate how a redevelopment could deliver on key Government objectives through the creation of a bio-hub.”

Te Uru Rākau is partnering with private companies and government agencies to explore the feasibility of additional wood processing, bioenergy and bio-products.

“Earlier this year I announced a $57 million fund would enable the Government to partner with wood processors to co-invest in wood processing capacity to create products like sawn structural timber and engineered wood.

“This could help make upgrading the Kinleith Mill a reality if it can raise the funds needed.“