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Why Chinese LVL Import Surge Dashed Juken’s Gisborne Sale

Hopes for a ‘white knight’ to save Gisborne sawmill hinged on local production and the age of the manufacturing facilities


Fri 17 Nov 23

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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 latest push to close the mill is five years after Juken NZ pivoted from Engineered Wood Products to high value Solid Wood Products. (Photo Credit: Juken NZ Supplied)
The latest push to close the mill is five years after Juken NZ pivoted from Engineered Wood Products to high value Solid Wood Products. (Photo Credit: Juken NZ Supplied)

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.”

Logs from Russia stacked outside Manzhouli, a Chinese border town, where the wood is processed and then shipped throughout the country and the world. China now makes up more than 60% of Russia's global trade. (Photo Credit: Lam Yik Fei for The New York Times in 2021 taken before the Ukraine War)
Logs from Russia stacked outside Manzhouli, a Chinese border town, where the wood is processed and then shipped throughout the country and the world. China now makes up more than 60% of Russia’s global trade. (Photo Credit: Lam Yik Fei for The New York Times in 2021 taken before the Ukraine War)

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.

Author

  • Jim Bowden

    Jim Bowden, senior editor and co-publisher of Wood Central. Jim brings 50-plus years’ experience in agriculture and timber journalism. Since he founded Australian Timberman in 1977, he has been devoted to the forest industry – with a passion.

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