Whakatāne Mill gets expansion green light after nearly closing last year, securing hundreds of jobs for region

The Whakatane Mill is set to expand. Photo / Supplied

Whakatāne Mill Limited will expand the size of its operations just a year after it was set to close down completely.

The company recently received approval from its holding company, Power Paperboard Limited, for the expansion, which is expected to significantly increase production of paperboard about 40 per cent, or the equivalent of 60,000 tonnes a year.

The expansion, set to begin in July 2023, would employ more than 300 hundred people.

The mill came under the threat of closure in 2021 when former owner, Swiss company SIG Combibloc, signalled its intention to close it down given its struggle to remain competitive.

However, it was purchased by the present owner, a consortium of international businessmen along with local investors, in May, averting the loss of more than 170 jobs.

In a statement today, the company said the expansion costs would be funded jointly by WML's internally generated cash and a loan from the Bank of New Zealand, which the company said had been "very supportive and encouraging of the newly formed company".

Executive chairman of WML, Ian Halliday. Photo / Supplied

WML executive chairman Ian Halliday said the expansion would provide a huge boost for the local economy, and was also good news for the region.

"The mill is already a significant employer and contributor to the Whakatāne and the Bay of Plenty region, and during the construction phase is set to employ more than 300 people.

"The raw materials needed to ramp up production will be almost exclusively sourced from local timber and pulp mills, with the value-added product and increased tonnage expected to boost export revenues for the country."

Specialised equipment needed for the expansion will be imported from Europe, however, ancillary equipment including motors and piping will also be sourced and manufactured locally for the most part, as will construction.

"In addition, we will be introducing measures for increased sustainability, so we can continue to build an even more environmentally aware business. This is a big focus area for us as we head to a more sustainable platform for future-proofed growth," Halliday said.

As part of the upgrade, WML will remove plastic wrapping for its finished products and replace it with paper wrapping, a change that is expected to reduce the country's plastic use by 160 tonnes.

It will also reduce its gas consumption by eliminating its gas-fired infra-red dryers and adopting new drying methods.

The aim was eventually to generate steam from wood burning rather than gas, further reducing emissions in line with government priorities. Collectively, these new measures would move the mill closer to becoming a carbon-neutral manufacturer and a sustainable manufacturing processor of forest products.

Within three months of the purchase by PPL, the mill had stimulated substantial amounts of interest from domestic and international customers, with order books full well into 2022.

WML has been producing paperboard and paper and packaging products for 80 years.