Gisborne is the centre of a potential $200 million "revolution" in wood processing and New Zealand house-building after the official opening of a world-first plant.
The plant is the only one of its type in the world. It produces Wood Engineering Technology's breakthrough product OEL, which is one of only seven engineered lumber products ever commercialised.
Wood Engineering said earlier this year its laminated engineered wood planks, 40 per cent stronger than equivalent standard structural timber, will revolutionise building practices and will ultimately be worth millions of dollars earned from global licences, and contracts to build state-of-the-art plants overseas.
OEL is made from thin strips of wood that are finger-jointed and laminated together. By laminating wood the stiffness and strength is improved and allows the use of low quality and small diameter logs for a high quality structural product.
Wood Engineering Technology (Wet) director and founder Tony Johnston said the structural lumber produced would be solely for the domestic market.
"Today was a celebration that we have got this one to a fully-operational level. It's servicing customers and it's doing what we wanted it to do.
"Probably what's more significant is what we've learned from this plant. . . . and now we have the funds available and made a number of decisions on how to significantly enhance the process. We are ready now to start implementing that second phase.
"This second line will be just over two times the capacity. It will be about 50 metres longer but it will do all the same things — just in a more efficient way."
The company raised $30m through a combination of the Provincial Growth Fund and private investors to build the new line.
"This second line will need about 20 technically qualified, highly-paid people working here."
Two more plants, each with two production lines, were also planned for Gisborne through a $200m expansion plan.
"We haven't got that funded at this stage but like all these sorts of projects it will attract funding as people see its usefulness, its utility and its profitability," Johnston said.
When completed, the Gisborne location will have six production lines producing up to 140,000 cubic metres of OEL — enough for more than 11,000 houses — and employing more than 130 people.
Wet chairman Angus Fletcher said the Gisborne plan was "the biggest development in wood processing in over 30 years".
"But more importantly, OEL is helping New Zealand address its biggest challenges — climate change, productivity, regional development and the need for higher-density housing.
"Our disruptive technology turns unprocessed logs that would have otherwise been sent overseas into an innovative, high-value product. And it does it in a fully automated, artificially intelligent, robotic factory in less than 12 hours while creating skilled, higher-paid jobs in our regions — New Zealand innovation at its best."
Fletcher said the Gisborne operation — run by Wet Gisborne Limited, a joint venture between Wet and Trust Tairawhiti — had been 16 years in development.
Economic and Regional Development Minister and Forestry Minister Stuart Nash was in Gisborne yesterday to open the OEL production line.
Nash also turned the first sod on the company's second production line, construction of which will start in six months and will take about 20 months to complete.
"We have a lot more (houses) we need to build and we have a new wood-first policy that says any new build that is built for the state sector or by the state sector must be built out of wood.
"This is really strong wood. It has a structural integrity that is probably better than concrete and steel.
"This is really important in terms of driving the sort of homes we want to build. They will be working with Kainga Ora, no doubt, and other contractors because if you are building for the government it has to be built out of wood, and this fits the spec."
Nash said the development of the second line and the company's plans for more plants here would help raise the region's wealth.
"These guys pay fantastic money. These are high-skilled jobs. You are getting $500 per hour of output — that is massive productivity and it's happening here in Gisborne."
Nash said the Government had provided about $10m in concessionary loans and had also worked closely with the company to make sure this could happen for several years.
"To see it in full production mode is just fantastic. This is a revolution."
Wet Gisborne Limited (WGL) chairman John Rae said the development was a "game-changer" for the regional economy and forest owners.
He also praised regional economic development agency Trust Tairawhiti (formerly Activate Tairawhiti) for having "the cojones" to invest about $20m over the years, following an initial $4.7m investment in 2016, which established the Gisborne plant at the Prime Wood Cluster Centre of Excellence at Matawhero.
Trust Tairawhiti economic development general manager Richard Searle said: "Trust Tairawhiti is pleased to have invested alongside Wood Engineering Technology to continue to drive increased processing of our logs in the region to create further high-value jobs and build our economic resilience to the fluctuations of international log markets."