Time is running out to save two significant mills in Kaitāia from closure. Northland Regional Council (NRC), Far North District Council (FNDC) and Northland NZ (NNZ) are calling on central government step in to limit job losses, as NNZ continues to work with potential investors.
Juken New Zealand, a Japanese-owned company, earlier this year sought expressions of interests to buy its two mills in Kaitāia – Northland Mill and Triboard plant. That offer process closed at the end of May.
Government investment would see good financial returns, jobs and capability retained in the region, and it would protect the forestry industry, while closing the Northland Mill and Triboard plant would devastate the Far North town and Te Tai Tokerau Northland, says Head of Investment at NNZ, Tui Rutherford.
“Conservative modelling predicts that investing right now will generate a good return over five years on an initial government investment. Acting soon also avoids economic damage and disruption which will cost the government dearly in the long term.”
Northland NZ understands that while no outright buyers were found for either mill before the offer deadline, expressions of interest were received in respect of both. Interest in the Northern Mill centres on site plans to upgrade equipment and modernise the operation. NRC, along with FNDC, is backing Northland NZ to facilitate discussions that firm up both deals, says NRC Chairman, Pita Tipene.
“This includes working on a consortium of investors to back the commercial upgrade plans for the Northland Mill site. That model would require investment by the government.”
The proposed Northland Mill redevelopment would make use of skilled staff, the existing site, site permissions and some existing infrastructure.
The opportunities presented by the Northland Mill site are underpinned by a strong and sustainable forestry resource, experienced workforce and access to domestic and export markets, says Far North Mayor, Moko Tepania.
“There is a significant opportunity to build on these assets, which are supported by experienced operators and well-established infrastructure.”
Alongside the modernised mill, a second operation is proposed – turning the waste and low-grade wood into woody biomass biofuel. This operation is also expected to employ some of the existing workforce.
Early government investment in both proposals would help secure a successful transition of the milling operations, retain jobs, and provide a financial return to the government, says Mr Rutherford.
“The regional economic agency is working alongside the councils to ensure potential investors understand the strategic value of the operations within Northland’s wider forestry system, along with the robust returns forecast.”
