$50m expansion at karioi studied

Ruapehu Bulletin, Volume 9, Issue 428, 17 March 1992, Page 1

$50m expansion at karioi studied

There are many aspects of the Karioi Pulp Mill expansion to be studied before it is to be considered by the Winstone Pulp Industries Board. Winstones Pulp Industries general manager told the Bulletin this last Thursday, following reports in the country's daily papers about a $35 -$50 million expansion at the mill. Mr Anderson said feasibility studies had been started about November last year on the expansion. Work on the idea was stepped up in recent months when, during a visit to Scandinavia, Mr Anderson and Winstones executive director Klas Kronkvist found there was quality second hand milling machinery available. A number of mills that are weaker in the pulp market place were closing down, said Mr Anderson, leading to the machinery being put up for sale. The mill expansion would take its potential production from 120,000 tonnes of chemi-thermo-mechanical pulp (CTMP) to 175,000 tonnes per year. "But there are many irons in the fire, which makes it impossible

to say what chance there is that the expansion will go ahead," said Mr Anderson. He said once the feasibility study was completed it would be presented to the board of directors, which would happen later in the year. If it goes ahead commissiong would be expected in 1994. Mr Kronkvist said the owners of the mill had two good years after their purchase in September 1988, before being caught in the cyclical downturn in pulp prices of 1991. Two Indonesian based Chinese families, the Budiman and Sulistyo families, own the mill under the company name "Perfect Match". The mill managed to maintain its operation above break-even in 1991, when production was $85 million worth of 116,000 dry metric tonnes of pulp. The mill is budgeting for a lift in earnings this year. The mill is surviving through the efforts of the staff having achieved an operating rate close to 100 per cent capacity making Karioi one of the lowest cost pulp producers in the world.