The shadow of closure hung over the Juken forest processing mill at Gisborne in northeastern New Zealand as Japanese owner Wood One hoped for a ‘white knight’ to keep the facility and 80 jobs afloat.
But time ran out this morning, with Wood One announcing the mill’s closure.
The Hiroshima-based company has invested over $700 million in processing machinery for LVL and plywood production at Gisborne, most of it well past the use-by date.
The company’s plywood mill was shut down seven years ago and hasn’t operated since.
As reported by Wood Central, Juken New Zealand managing director Hiroyuki Kawado said the company had considered all options and the impending sale was brought about by ongoing financial difficulties and market conditions.
On top of this, the market and Australia are sinking under a flood of engineered wood products from China.
“Mountains of Chinese LVL are coming into New Zealand almost every week, seemingly out of nowhere,” an industry observer told Wood Central.
“To establish a new LVL plant in New Zealand, or Australia for that matter, would need at least a five-year lead time that includes two years of planning and two years to get council approval and process another year to complete construction.”
“The Chinese are building one LVL plant every three months.”
He said the Engineered Wood Products ‘ mix’ from China more than likely also included logs from Russia processed into LVL in a ‘back-door diplomacy’ arrangement by the two countries.
Wood One also manages 40,000 hectares of certified forest on the east coast and Wairarapa regions of the North Island for integrated production from seedlings to wood products, using a 30-year cycle of afforestation, cultivation, harvesting and afforestation.
However, it has been more profitable to sell this resource to China, which, in turn, sends it back to New Zealand as LVL.
The decision to close the mill was made this morning, November 17, 2023, after Wood One failed to find a buyer for the mill.