KEY POINTS:
Wood Engineering Technology aims to turn the lumber industry on its head with a process that can turn low-value pallet wood into high-value structural timber.
Director Tony Johnston says the Auckland company can process all of a log, which is made up of different standards of wood, into
high-value structural lumber, compared with potentially only about 30 per cent using a conventional sawmill.
"We don't have a lot of friends out there in the structural sawmilling world because they see this as more of a threat than an opportunity because it basically [makes] obsolete the existing sawmilling assets," Johnston says.
The process can use small diameter, crooked and short logs not suited to sawmilling, which are sawn into thin strips, dried, graded and reassembled combining different grades to produce high-quality timber.
"You're reassembling the strength of the tree into the strength of each piece," he says.
The cost of producing a high-quality piece of lumber is similar to the traditional method but the potential revenue is higher because of the ability to maximise the raw materials.
The company has received more than $225,000 of investment from the Foundation for Research, Science & Technology towards the cost of building a $2.5 million pilot plant during the next 18 months in South Auckland to verify the manufacturing process.
A $35 million commercial plant with capacity to produce 50,000 cu m of the engineered lumber a year is planned to follow the pilot.
Sales of framing lumber in New Zealand, Australia and the Pacific Islands are worth about $1.2 billion a year, while Johnston says the output from the planned new commercial plant would account for about 2.5 per cent of the market.
"We're in discussion with three parties to take an off-take agreement," Johnston says. "The intention is that the total output of the first [commercial] plant will be sold before it's built."
Johnston believes the company's technology will change the nature of the industry. The finished product will be able to be marketed at a lower price than traditional structural lumber.
"We've long known that a large export opportunity exists for engineered wood products, an order of magnitude larger than the New Zealand market, but until this breakthrough we have been unable to meet the required price point. Now, we can do better than that."
