The NZ government will support the energy upgrade of Oji Fibre Solutions operated Kinleith Mill.
In addition, it will assist in building a new large-scale sawmill to supply mass timber products.
The upgrade will support 200 additional jobs, generate more than NZD 566 million in GDP and reduce emissions by 65,000 tonnes of CO2, according to NZ Forestry Minister Peeni Henare.
The upgrade is supported by a six-month study project undertaken by Wood Beca, examining the feasibility of developing a Bio Hub at the mill.
Around half of Kinleith Mill’s electricity requirement is generated by their co-generation plant, with the remaining balance purchased from the grid.
Oji Fibre Solutions CEO Jon Ryder said the study was a fantastic opportunity to look at “increasing value from the wood we grow by making a mix of products, like solid wood, packaging, wood-based chemicals, and bioenergy.”
The mill, one of eight still in operation New Zealand-wide, produces 330,000 tonnes of paper grades per year, plus 265,000 tonnes of bleached pulp.
The proposed Bio Hub will create a sustainable pathway for investment and develop a regional bioeconomy cluster that supports the growing demand for products derived from wood fibre.
It will also include a modern large-scale sawmill, enabling the production of primary solid wood products and the likelihood of engineered wood products such as CLT, contributing to export development.
The sawmill will also provide commercially competitive fibre residues for manufacturing and energy production.
Commitment supports NZ’s Forestry and Wood Processing Package
“This Government is committed to investing in our people by creating more jobs,” Peeni Henare said.
“Earlier this year, the government 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.”
As reported by Wood Central in June, the ‘Forestry and Wood Processing Industry Transformation ‘launched by the Te Uru Rākau (NZ Forest Service) in 2022 – has allocated NZD 57 million for industry capacity building.
“This could help make upgrading the Kinleith Mill a reality if it can raise the funds needed.”
Minister Henare said, “The government wants to see more logs processed onshore, help move our forestry sector from volume to value, lift our economic performance and resilience and create high-wage jobs in our regions.”
The sawmill output could also help increase the quantity of carbon stored in wood and create low-emission products for building and construction.
Depending on the staging and configuration of the possible options, the construction phase could contribute $2.5 billion of additional GDP over three years.
“I’m excited by the potential of this project to help build a high-value, high-wage and low-emissions economy in line with the vision set with the sector in the Forestry and Wood Processing Industry Transformation Plan,” Peeni Henare said.