East Coast forestry gets $40m government injection

Wednesday 25 Mar 2020

The East Coast is to get a $40 million injection to employ out-of-work forestry crews and sustain development of new wood processing capacity.

The Gisborne-Tairawhiti region has been allocated $28 million by the government to deliver local, alternative work for forestry crews, some of whom haven’t worked since January. It is the first allocation from $100 million set aside for industries hardest hit by the covid-19 outbreak.

The Tairawhiti work package will be administered through the Provincial Development Unit in partnership with the Mayors’ Forum and Gisborne District Council. Affected workers will be referred by the Ministry of Social Development and affected firms.

Potential work and redeployment includes local roading work, hazardous tree removal, accelerated planting under the one billion trees programme, conservation projects and retraining.

“Forestry was one of the first industries to be seriously impacted by covid-19 but by keeping the infrastructure and workforce of the sector intact, we hope it will be one of the first to recover,” Economic Development Minister Phil Twyford said in a statement.

The programme is intended to help redeploy almost 300 workers in the region for the next three to six months.

Forestry accounts for close to 7 percent of the East Coast economy. Eastland Port this week said its log flows to China had stabilised but were still about 30 percent below budget.

Unlike many of the country’s other forestry regions, Tairawhiti has relatively little processing capacity to absorb excess harvest flows.

Forestry Minister Shane Jones said the sector’s future in the region is “extremely bright” but it needs to be sustained while markets return to normal.

“The sector was just recovering from a slowdown over last winter. Many small firms used their cash reserves to get them through that and some companies are now struggling to survive,” he said in a statement.

Separately, Jones today announced $13 million in loans for a redevelopment of the Prime Wood processing facility south-west of Gisborne.

The bulk of the money, from the Provincial Growth Fund, will accelerate laminated processing at the site.

Jones said a $12.1 million loan will enable construction to begin on the processing line, which will increase the site’s capacity from 3.5 days a week to seven-day operation. Up to 74 new jobs may be created at the site in coming months, he said.

Another $980,000 has been lent to project developer WET Gisborne – a venture between Trust Tairawhiti and Wood Energy Technology – for a heat plant planned at the site.

Jones said the fabrication work for both the processing line and the heat plant would help ensure job continuity for local engineering firms.

Trust Tairawhiti - formerly Eastland Community Trust - bought the closed Prime sawmill site at Manutuke in 2015. In 2018 it sold the main mill to Far East Sawmills but retained the 22- hectare site as part of a plan to develop a processing cluster there.

Far East received $500,000 from the Provincial Growth Fund toward the recommissioning of the mill. Last July, the fund agreed to a staged investment of up to $19.5 million to help develop the wood cluster.

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