Winstone Samsung confident about future of Karioi Mill

Waimarino Bulletin, Volume 2, Issue 25, 20 November 1984, Page 1

Winstone Samsung confident about future of Karioi Mill

"I am confident that the pulp-mill will show a profit for the first time ever at the end of this financial year," said Winstone-Samsung Industries' managing director, Mr Klas Kronqvist, when interviewed at Karioi last Thursday week. Speaking before the Budget, Mr Kronqvist said that "the market situation was extremely good, the order books are full well into 1985 and these orders exceed the present capacity of the mill." "That is why we are increasing our capacity from the current 70,000 tonnes to 120,000 tonnes. This month is our commissioning month following extensive additions to plant, equipment and the mill's floor area — about 2,000 square metres. "Next month we should be in full production but there has been a slight .delay to the original schedule. This is because it has taken longer than expected to get

Marine Department approval to import overseas equipment, mainly from Sweden." "We also had a hold-up earlier in the year when a 23.7 tonne motor worth about $250,000 from Japan was damaged following an accident on the NapierTaupo Road. But this machine was returned to Japan, repaired, tested and has arrived back in New Zealand in mid-October fully^ guaranteed and will come into operation early next year." Mr Kronqvist said that, in anticipation of the increased production, the mill had taken on 25 extra people bringing the total staff to 1 26. This would be adequate to handle the mill's capacity into the foreseeable future. He explained that the Karioi Pulpmill produced only against orders and 100% of the mill's output went into export markets in Japan, Korea, India, In-

donesia, Australia and mainland China where they competed against Scandinavian and Canadian products. "We aim for our pulp to reach ourcustomers in these markets within two months of it being produced in Karioi ... it is railed out to Napier from where it is carried on bulk ships to ports around the Pacific." "We are getting relatively good prices for our new BCTM P (Bleached Chemical Therma Mechanical Pulp) product which we introduced last March. Certainly we are not losing money and in fact have made a maiden profit of over $ 1 million in the first half of this financial year." (This compares with loss of $3,274,000 loss in 1983). But we are worried about tonight's Budget (this interview was conducted on the eve of the recent Budget) and the rumoured increases in electricity charges." "We use a lot of electricity

— 27 megawatts before the expansion and a projected 45 megawatts* when we reach full production. We can't pass on any proposed increase to our customers as a domestic manufacturer can do, for fear of risking our competitiveness with the Scandinavians and Canadians." "Already we are at some disadvantage with our shipping and freight costs which are very high in New Zealand. This is because of the transport rates, the greater distances and very few — and therefore less

competitive — shipping facilities out of New Zealand. "One of New Zealand's natural advantages should be the low cost of its electricity because the country lends itself to comparitively cheap hydro electric and other indigenous sources relative to power production methods in our competitor's countries." "T onight's Budget will tell us whether the Government recognises the effect any increase in electricity charges could have on our operation," he concluded.

We hope to bring you Mr Kronqvist's reaction to the 1984 Budget in next week's edition. *(Note: As a matter of interest and comparison the Bulletin has ascertained that a city such as Palmerston - North with its population of 60,000 reaches a peak demand of 28-30 megawatts only at certain times of the day whereas Karioi Pulpmill's requirements will be maintained at a steady 45 megawatts throughout the day. The entire Waimarino region, with the exception of the Mill, peaks at about 6-8 megawatts.)