Trial lease for sawmill

WAITING: The Far East sawmill before it closed down during the Covid lockdown. File picture by Liam Clayton

The former Far East sawmill at Matawhero should be back in operation by the end of next month, employing 45 people.

The mill was closed down during the Covid-19 lockdown and bought back by Prime SPV, a subsidiary of Trust Tairawhiti. The trust had previously paid $7.4 million for the Prime Sawmill before selling in to Far East Sawmills, with the trust retaining ownership of the 22ha site.

Hastings-headquartered company Kiwi Lumber has now agreed to lease the mill on a three-month trial basis and is already looking for workers.

“We are looking to start the mill in late June and will make a decision at the end of the three- month period as to whether or not we will take over the mill on a permanent basis,” managing director Adam Gresham said.

“We are just going to start the site on a three-month trial, there's just some things we need to check with the site before we commit to it long-term.

“If we take over the site permanently we have a significant capital investment programme planned to be completed within the first three years.”

Kiwi Lumber is a privately owned, growing and progressive sawmilling company marketing radiata pine to the US, Australia, Europe, Asia and New Zealand markets and employs more than 220 staff across three sites located in Masterton, Dannevirke and Putaruru.

In addition to general mill staff it has also advertised for a timber grader, a filleter, a forklift operator and an office administrator for the Matawhero site.

Former Far East employees had been asked to re-apply for their positions, Mr Gresham said.

“They are being interviewed today and tomorrow.”

The Herald understands 41 staff members were kept employed by Trust Tairawhiti after its purchase of the mill, with the help of the government's wage subsidy scheme.

“We will have about 45 staff on the site initially,” Mr Gresham said.

“If things go well on the site, staff numbers could increase gradually over time.

“We sell to a lot of different markets and so we have very good demand across all our markets at the moment. But who knows what the global economy will be like in six months time?”

However, the demand, and good diversification, were “positives around how we see the future”.

The mill itself was recommissioned in 2018, when the Provincial Growth Fund (PGF) invested $500,000 with the expectation of establishing a workforce of about 50. The total cost to recommission the mill was more than $3.6 million, with the rest of the funding coming from the Eastland Community Trust and Far East Sawmills Limited.

Since then the Government has confirmed $20m of support, through the PGF, for establishing a wood centre of excellence at the site. Then on March 20, with the Covid-19 crisis having already made its presence felt in the forestry sector, the Government announced a $12.1m loan to further support the venture.