The Fast Death of Our Major Forestry Mills

2024 is the worst-ever year for our forest export industry as a whole, with most of our largest sawmills closing and the loss of hundreds of jobs.

In the latest, Kinleith is about to close with the loss of 230 jobs. 

The politics of this is simple and clear: National and New Zealand First blamed power companies for the closure of Winstone Pulp’s two plants near Ohakune and Waiouru after 45 years. With all their talk this government achieving absolutely nothing for them. Same result will occur here.

The closure of Kinleith , with another 230 jobs going, leaves no mill of that scale left. It takes decades and decades to build and support major export manufacturing in New Zealand, with central government funding and institutional support, foreign investment, and decades of local worker and union and community support to make it all happen.

Labour knows this. Only last year the previous Forestry Minister Peeni Henare said that working with Oji Fibre Solutions, a new large-scale sawmill to supply timber and bespoke engineered mass-timber products could provide hundreds of jobs and boost the economy.

The Wood Beca study, a project between the government and Oji, showed that upgrading the mill could create an extra 200 jobs and generate up to $566 million in additional GDP, and reduce greenhouse gas emissions by 65,000 tonnes of CO2 per annum.

Labour and National, for multiple decades, treated the Kinleith Mill as a key strategic asset for New Zealand, investing in the infrastructure required for one of our largest industrial sites. Only last year the previous government announced a $57 million fund to partner with wood processors to co-invest in wood processing to create sawn structural timber and engineered wood. 

Across the fields of low-quality volcanic plateau land, Pinus Radiata was identified back in the 1940s as a viable crop that also needed significant investment to turn into export products. By 1947 the Tokoroa township and housing area were being constructed for millworkers. 

State investment to help this massive industrial site become viable is illustrated in the New Zealand Railways purchase of the tramway between Lichfield and the mill, with extensive rail line reconstruction to reduce steep grades and eliminate tight curves. The upgraded line finally opened in October 1952, and continued to be a major source of revenue for Kiwirail.

Government also came to hand with huge investment in geothermal energy at Wairaki to power Kinleith, using steam from the nearby Waiora Valley. This had state support all the way through it, from the scientists and engineers from the Department of Scientific and Industrial Research, Ministry of Works, and the Electricity Department, who together conceived, built, and operated Wairakei.

Kinleith’s massive industrial site was built by F. T. Hawkins for New Zealand Forest Products Ltd: a huge workshop and store, a pulp store, and a causticizing building for bleaching paper. In the 1990s Hawkins became part of Downer NZ.

The whole thing was opened by Prime Minister Syd Holland and NZ Forest Products Chair David Henry in 1952 together with 6,500 people.

Kinleith was a true nation-builder project. 

One of the larger demands for this paper was the large broadsheet-format newspapers such as the NZHerald that was printed in Penrose through Wilson and Horton. Of course, printed newspaper is in rapid decline.

But now Oji Ltd is in full retreat. They were $103m in the red last year, have closed their big recycling plants in Auckland and Wellington, and after Kinleith it’s hard to see Kawerau surviving let alone Oji staying in the country. Revenues shrank 14% from $1.4b to $1.26b, and margins shrinking to 1.8%. 

To add to the damaged Ohakune and Waiouru, we may add Tokoroa with 14,000 people.

Another chapter  to David McGill’s Ghost Towns of New Zealand.

Kinleith will never be able to be replicated again. 80 years of major manufacturing, just gone.

For any political party, this is the truth: New Zealand will simply die without a value-added export economy.

The pulp and finished timber industry here is collapsing on National’s watch and they are letting people and towns and factories simply go to waste. 

This rapid decline in this core exporting industry is entirely on this National-led government, just as it needed central government support to make it happen right from the beginning.