While Waverley Sawmills is closed for business its new owner has been working towards a modern state-of-the-art sawmill on the site.

Spectrum Group bought the mill and closed it in March this year. But managing director Wade Glass said its resource consent and surrounding forest maturing in 10-12 years made it an ideal site for a modern, automated mill that would process higher volumes of timber.

His focus for this year was acquiring more local forests to supply it with timber. In April he acquired "a bunch of forests" and is now in negotiation for another large forest.

Also, he said, the second Arbor shareholder vote on forests is forthcoming.

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And, he has identified a promising new product line.

"We've identified a new product line which we intend to trial at our Gisborne mill first, with a view to rolling out at Waverley in one to two years," he said.

He had earlier told Radio New Zealand that he was looking to raise $20 million to $30 million to build a new mill at Waverley in two to three years' time. Equity investors could be involved, as could the Provincial Growth Fund.

Any sale of forests has to be agreed to by 75 per cent of shareholders.

Glass says forest owners really need to work in tandem with the sawmill industry to prevent the failure of more New Zealand sawmills.

"Otherwise in future there won't be much in the way of domestic lumber supply for certain products, and we will be importing most of our lumber - some of it made from the very logs we have exported. If that's not economic suicide, I don't know what is."

Spectrum Group owns Far East Sawmill in Gisborne, RH Tregoweth Sawmillers in Te Kuiti, forests, logging trucks and a log trading business.