Winstone’s confident mill will succeed

Press, 13 May 1981, Page 22

Winstone’s confident mill will succeed

PA Auckland The announcement of Government assistance to the Karioi Pulp Mill operated by Winstone Samsung Industries, Ltd. was the outcome of discussions the company began with Government 22 months ago. Winstone's managing director (Mr B. D. Bamfield) told a press conference yesterday that no progress whatever had been made on the issues initially discussed (concessions on power, or recognition of mill output as a new product qualifying for a higher level of export incentive.)

But he said that the Government participation would enable capital formation of Winstone Samsung to be changed quite significantly. Originally, Winstone Samsung had been designed as a highly-geared company with

offshore borrowings of SUS 22 million. This level would not hold for very, much longer because a “significant amount” of the funds provided by Government would be used to reduce these borrowings.

The balance of Government participation would enable certain plant additions to be installed. These centred on the pre-steaming of wood chips which would improve the uniformity of mill input, and the installation of bark burning equipment to replace oil-fired heating machinery.

This would reduce dramatically the mill’s present high usage of oil — in fact, consultants had advised the company that it could cut its oil usage completely in two years. Other work being considered included chemical. pretreatment of wood chips which would enable the production of higher value pulp. Ultimately, the mill would

produce a fully-bleached thermo-mechanical pulp which would have a significant added value.

The impact of moves planned would be to reduce costs, lower exposure to currency changes, and improve cash flows. Mr Bamfield said that the agreement with the Government had yet to be signed, and some’ fine points remained to be settled. He said that the mill was currently operating five 24hour days a week and producing at an annual level of 50,000 tonnes a year (it has a potential output of 68,000 to 72,000 tonnes a year).