Pan Pac’s Napier plant reaches milestone in $280m cyclone recovery

Pan Pac general manager Tony Clifford at the Whirinaki plant. Photo / Warren Buckland

Pan Pac is celebrating a major milestone - reigniting its chip mill at the flood-stricken plant north of Napier.

On Monday, it became the first production facility to become operational again at the Whirinaki pulp and timber plant since Cyclone Gabrielle.

As one of the region’s biggest employers, it’s been a big challenge for the past eight months to tidy up and rebuild the plant.

Floodwaters up to 2m high ripped through the site in February, damaging equipment, buildings and electronics.

The company says it is set to suffer a big loss of almost $200 million from the floods, as insurance payments cover only about a third of the estimated $280m cyclone costs and repairs.

The chip mill is the first production facility to become operational again at Pan Pac's Whirinaki plant. Photo / Warren Buckland

Pan Pac fibre supply operations co-ordinator Jason Crawford said it was great to hear the noise of the chip mill running again.

“Just to hear that running again, they [staff] were all smiles,” he said.

“Just getting back to their routine and just seeing something running, they were all happy.”

The wood chips from the mill are being delivered to Napier Port and then shipped to Japan to be turned into paper.

That operation is only temporary, until the Whirinaki plant gets its pulp mill up and running again.

A growing mountain of wood chips will be visible at the port. Photo / Warren Buckland

Pan Pac managing director Tony Clifford said the lumber business and mill at the plant would be up and running again in a limited capacity in November, along with one of the plant’s boilers, and the pulp mill would be operational again in February.

He said the company, owned by Japan’s Oji Group, hoped to have its entire plant back to full operation by late 2024.

Clifford said the cost of the cyclone to them was estimated to be $280 million, taking into account damage and rebuild costs and lost income from the plant not operating.

“Insurance will cover about a third of that. So we are significantly out of pocket.

“It is a little bit of a misconception that there is a big insurance job going on at Pan Pac, but [in terms of] insurance money we spent that months ago.”

Pan Pac fibre supply operations co-ordinator Jason Crawford was rapt to see the chip mill turned back on this week. Photo / Warren Buckland

The company employs about 400 staff, many of whom have been helping with the clean-up and rebuild.

No staff lost their jobs in the wake of the cyclone, and about 30 have been hired since February to fill vacancies and staff turnover.

“There has been a lot of people pitching in and there has been an enormous amount of flexibility from people,” Clifford said of the recovery.

Clifford, who has been with Pan Pac for more than 30 years, said it had been a huge effort and “you wouldn’t want to do two in your lifetime”.

Politician Kiri Allen after the floods, walking on the stopbank next to Pan Pac where floodwaters exceeded. Photo / Warren Buckland

Pan Pac buys 120ha forest in Hawke’s Bay

Pan Pac recently purchased a 120ha forest in Kotemaori as it continues to recover from the cyclone.

The Overseas Investment Office (OIO) approved the purchase of a forest known as Mohaka Bridge Forest, off SH2.

Clifford said it was in a good location and the company already managed 35,000ha of forestry.

Pan Pac's timber and pulp mill in Whirinaki eight months on from the cyclone. Photo / Warren Buckland

“It suited the distance radius of our mill; we can’t be too far from the mill or else the freight costs are too high.”

He said there were several other benefits including not becoming too reliant on external forestry providers.

That forest was purchased from another overseas-owned company.