New era for Prime site as sawmill reopens
7 February 2018
BETWEEN 50 and 60 new jobs will be created with the sale of Prime Sawmill to New Zealand-owned Far East Sawmills this week.
A joint announcement by Activate Tairawhiti and Eastland Community Trust says jobs at the Matawhero site, which has been empty for the past seven years, will be in place by April.
Far East Sawmills, a subsidiary of Spectrum, is a fully integrated forest products business.
The company owns the Tregoweth Sawmill at Te Kuiti, forests in Northland, a forestry harvest company and a transport fleet.
It will replicate product mix from the Te Kuiti mill, targeting high-value, appearance-grade lumber for export to European and US markets.
It will also partner with any secondary processors on the mill site in Gisborne.
Far East managing director Wade Glass said the investment was a strategic one, with log supply, skilled labour and a proactive business network contributing to its decision.
The company is already in direct discussions with Juken over staff recruitment.
Juken announced late last month it proposed to cut its Gisborne staff in half, by about 100 jobs, as part of a restructure. That decision will be finalised by February 12.
Mr Glass said Far East Sawmills intends to employ up to 60 staff to produce about 60,000 cubic metres of timber a year.
It is likely to invest a further $9 million in the sawmill, initially upgrading ageing technology to improve efficiencies.
It was the company’s goal to run multiple shifts, eventually employing up to 100 staff, he said.
Eastland Community Trust chairman Michael Muir said the sale signalled a new era for the Prime site.
“We are thrilled to have such a respected operator on-site and that we can go some way to saving local jobs.
“This is a massive win for our community.
There is no way we could have done this without the foresight of the community in establishing the ECT with a mandate to focus on the region’s economic growth”.
The ECT retains ownership of the land (22 hectares) and can now move forward with its phased master plan, unlocking further jobs on the site and improving the value of the region’s forestry stocks.
Activate Tairawhiti chairman John Rae said the organisation was excited about the next steps.
Advanced discussions with a second wood processor interested in establishing its business at Prime were under way.
Securing an operator for the sawmill would now fast-track those conversations, he said.
This is the second investment at the Prime site, with the Wood Engineering business on the same site employing 15 staff and working to improve its technology.
Prime Sawmill announced in December 2010 it would close its mill on Christmas Eve that year and “mothball” the plant.
That was a bitter blow for the workers, the company, the community and the forestry sector in the East Coast region.
The mill, managed by Winstone Pulp International (WPI) and owned by Ernslaw One, struggled with the downturn in the US property and construction market and the high value of the NZD.
Despite successful efforts to increase productivity at the mill, the combination of increased log prices and lower sawn product revenues has resulted in an unsustainable operation in the current economic environment.
WPI said the mill was not being “scrapped” and should conditions change in the future, they would expect to possibly re-start operations. The mill remained closed since then.
In September 2015, ECT made the biggest single investment decision in its history, approving a $7.4 million purchase of the Prime Sawmill.
It occupies 22.32 hectares just south of the city and approximately 10ha and contains a modern, fully operational sawmill. It includes a green mill, capable of processing 500 cubic metres of timber in 10 hours, and a dry mill which dresses timber for market.
The facility also includes an export shed and facilities for log storage, debarking, cutting, kiln drying, processing, dry storage and dispatching via rail. A further 3.4 hectares between the railway and the road has been planted in Pinus Radiata, and seven hectares has been leased for annual cropping.
For more information about the Prime Sawmilling Centre of Excellence visit the website.