Forestry sector humming as $40m processing plant for Rotorua nears opening

Red Stag Group's $40 million large-scale timber processing plant in Rotorua is just waiting for European technicians to give it the all clear. Photo / Supplied

A $40 million large-scale timber processing plant in Rotorua ''tantalisingly close'' to completion will help create upwards of 100 jobs.

However, the company behind the project has job opportunities available now across its platforms - as the industry struggles to keep up with demand.

Business leaders welcomed the jobs and said the forestry industry had significant opportunities for growth.

Red Stag Group chief executive Marty Verry. Photo / Supplied

Red Stag Group chief executive Marty Verry said the new facility would produce cross-laminated timber for surging markets that wanted environmentally friendly ''modern new-age materials''.

The company performed stronger than expected last year with bright forecasts ahead and ''we have continuous job openings and opportunities'', Verry said.

Machinists, forklift drivers, operators, maintenance, fitters and particularly night shift operators were needed as it was increasing its shift patterns due to demand.

''It is a very, very buoyant market at the moment across the sector and across the globe. The materials sector is struggling to keep up with this uptake and there are raw material shortages here and around the world.

''People were starting to realise more than 10 per cent of the world's greenhouse gas emissions are caused by materials used to build with... and there is a big movement to encourage low carbon construction using wood."

Red Stag was investing ''a lot against that in terms of the plant and equipment to gear up for these developments''.

Its export markets included Australia, the Pacific Islands and Asia and had a particular focus on structural lumber products.

The new cross-laminated timber factory at its site in Waipa was being commissioned and was starting to supply jobs but would be fully commissioned in the next few months.

''The last of the European technicians are coming back into the country in the coming weeks so they can finish the commissioning.''

All the equipment was on-site, he said.

''It is very sophisticated technology which the technicians have the skills for. They will be able to customise it and tweak it to get it running perfectly.

''Ultimately they will also endeavour to train up our guys.''

Last year Red Stag received a $15 million loan through the government's Provincial Growth Fund to help develop the engineered wood products manufacturing facility.

Rotorua Chamber of Commerce chief executive Bryce Heard. Photo / File

Rotorua Chamber of Commerce chief executive Bryce Heard said Red Stag should be applauded as ''a lot of people talk about it but they get stuck in and do it''.

''The idea of building cross-laminated timber plants in New Zealand has been around for a long time and they have hopped in and done it and I give them full marks for that.

''There is a world demand for cross-laminated timber and there has been for quite a while. So hopefully this is something that can expand over time and it is great news to see those jobs.''

Rotorua mayor Steve Chadwick. Photo / File

Rotorua mayor Steve Chadwick said "while some sectors are really feeling the impact of the pandemic, our primary sectors are thriving''.

''Now more than ever, council and the wider business community in Rotorua is focused on adding value to our products and looking at new ways of working to create more opportunities to keep locals in employment.''

The forestry sector was incredibly important to Rotorua, she said.

''It is one of the district's key strengths and has significant opportunity for growth. In 2015, council adopted its Wood First Policy to facilitate and encourage wood as a preferred, sustainable building material to help support this sector. The policy recognises the economic, environmental, cultural and social significance of wood and promotes increased use of wood in housing and commercial construction.''

That was also a key priority in Council's Draft Economic Development Strategy Framework, she said.

"I want to congratulate Red Stag Wood Solutions on their innovation which has opened up a range of employment opportunities for Rotorua residents at such a critical time. I look forward to seeing the new plant open in the near future."

Provincial Growth Fund drives timber opportunities

In 2020 the government invested nearly $22 million into four Bay timber companies from the Provincial Growth Fund to boost the local economy and create jobs. But finding people to fill those roles was proving difficult as demand for their products has gone through the roof.

Recipients included loans to Red Stag Group $15m, Te Puke-based Pukepine Sawmills $1.6m alongside KLC Ltd's $3m support package and Tunnicliffe Timber Solutions $2.25m to help the business expand and to increase production.

Pukepine Sawmills general manager Jeff Tanner. Photo / File

Pukepine Sawmills general manager Jeff Tanner said prior to Covid it had 150 staff. Now they employed 185 and had 10 vacancies.

But the mill, based in Te Puke, had no way of keeping up with the unprecedented demand for timber products.

He said there were a number of receiverships and closures of sawmills in 2019 and 2020 which reflected the poor margins caused by rapid log price increases driven by demand in China.

The exit of these mills meant those left were able to run at full production and improve their margin a little.

''Then along came Covid and the lockdown in April 2020. Economists were telling us the sky was going to fall in but many of us in our industry have seen recessionary environments before and we could see the demand building before lockdown for DIY.''

The low interest rates driving the housing market had also had an impact, he said.

''This translates into a unprecedented demand spike across all building products including timber. Unfortunately, we have no way of keeping up with demand and the people are not available to increase shifts or hours.

''So we focus on doing the best for our loyal customer base and allocating products out as fairly as we can to ensure everyone gets something.''

KLC managing director Kevin Lewis said it was hiring for several roles from the shop floor to a chief financial officer.

Like others in the timber industry, it was experiencing unprecedented demand as ''Aotearoa seeks to remedy our housing shortage, Kiwis seek to renovate and improve their homes during a global lockdown and overseas markets look for quality timber products''.

There was particular demand for environmentally friendly Micropro H3.2 and H4 product lines with are produced free of harmful VOC gases, he said.

''We are always open to hearing from people interested in a career in the timber industry and regularly take on new staff from Rotorua, Kaingaroa, Murupara and Whakatāne.''

Tunnicliffe Timber Solutions was approached for comment.