The forestry sector has been given a $58 million injection with Rotorua to reap the benefits.

Forestry Minister Shane Jones made the pre-Budget announcement yesterday and said the extra funding would create about 80 jobs at a new Rotorua premises.

A new Forestry New Zealand premises will be built in Rotorua, a town Jones coined "the heart of the forestry sector".

The premises will create 80 jobs nationwide with a substantial amount here in Rotorua.

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Jones said the premises would create a host of well-paying jobs for men and women, and assured the building "would be made completely of wood".

Jones said this was a clear demonstration the Government was willing and keen to move to the regions.

Aerial view of Red Stag Timber in Rotorua. Photo / File
Aerial view of Red Stag Timber in Rotorua. Photo / File

The new premises would allow Te Uru Rākau (Forestry New Zealand) to increase its regional presence and ensure foresters and landowners had the support they needed, he said.

Jones said it was highly important that landowners in the central North Island had the ability to seek professional advice regionally.

Shane Jones announces $48m for forestry sector

He said growing this presence would open up opportunities to work even more closely with landowners, particularly Māori and farmers across the country.

The additional funding would also provide the option to explore the creation of more forestry processing plants nationally, as opposed to the current system overseas.

He said Rotorua's timber processor, Red Stag, was a great example of what was needed throughout the country.

"Red Stag is roaring and we need more stags like it up and down the country."

Red Stag Rotorua chief executive Marty Verry said the investment and the new building was a welcome move for the industry and would be crucial in getting everyone in the sector on the same page.

He hoped the building would be one of the first in the Government's imminent wood-first policy rollout.

"It will certainly help support investment and create demand in the wood-processing sector."

Jones said it was important for landowners to see that planting trees on their properties was a crucial part of combating climate change.

"Forestry is a great choice which will help landowners to diversify their income, invest in a sustainable future and increase productivity through improved land use, including tackling erosion."

He said some Māori land was screaming out for productivity and the planting of trees was a good way to utilise this.

Forestry is expected to add $6.8 billion to the New Zealand economy in 2019.

Rotorua mayor Steve Chadwick believed the announcement reaffirmed Government's commitment to relocate Te Uru Rākau to Rotorua as the heart of New Zealand's forestry industry.

Rotorua mayor Steve Chadwick. Photo / File
Rotorua mayor Steve Chadwick. Photo / File

"The aspiration of 80 jobs is substantial. Anything that creates employment and career opportunities locally, for locals, also adds to the ongoing revitalisation of our growing district."

Forestry and wood processing accounts for about 15 per cent of Rotorua's GDP currently.

"One thing I'd like to see happening here is the manufacturing of pre-fabricated homes which would provide further employment and economic benefits as well as providing an opportunity to contribute to addressing our housing shortage."

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

Rotorua Chamber of Commerce chief executive Bryce Heard was delighted by the announcement.

"Eighty jobs is pretty significant. We hadn't heard much about the Rotorua premise for a while so it's great to hear the real McCoy, that we are locking this in ... We are the heart of the forestry sector here, and people like the mayor have worked really hard to secure this."

Scion chief executive Dr Julian Elder said the announcement was "very positive" and a "welcomed reinforcement of the Government's support for forestry".

He said Scion had been a long-term supporter of locating Te Uru Rākau in Rotorua "as it brings government closer to industry and Scion's science".

"The commitment to build a new wooden building is also a great initiative by the Government to support the ongoing development of the wood processing sector."