No further Govt funds for Karioi

Press, 10 February 1983, Page 19

No further Govt funds for Karioi

PA Wellington The Government would not put any more money into Winstone Samsung's pulp and paper project at Karioi. the Minister of Trade and Industry (Mr Templeton) said on Tuesday. After attending evaluation trials of Karioi newsprint at the press of Wellington Newspapers. Mr Templeton said the Government was watching the project. ' A Government injection of SISM in the plant aroused controversy in mid-1981. “We are keeping ourselves continually informed of developments at Karioi. and we hope these end in a satisfactory manner. We are anxious to see a well-planned rational development at Kaioi. with good partners.” He said the Government would like to see the marketing arranged before the expansion project. There was a general understanding that the Government would reconsider its financial involvement in due course. Winstone's managing director. Mr John Ede, said: “The Government will be getting all its money back.” Mr Templeton said he hoped that any arrangement on Karioi would be flexible. Karioi had gone through a difficult period because of unexpectedly poor pulp prices.

The trials of various graders of Karioi newsprint on the Wellington press, the third in a series, were described by Mr Ede as a success. The tests almost complete the first stage of trials to test the possibility of hooking up a paper-making machine at Karioi. The Karioi mill, working on low-quality input timber, has run into a string of problems, the latest being the protracted downturn in the world pulp market. Previous tests of the newsprint have been made at Phoenix. Arizona, at a newsprint mill, and at the "Daily Mirror." in Sydney. Mr Ede said there had been particular excitement when it was found that the thermo-mechanical pulp produced at Karioi could be converted, without additional materials, into newsprint. “We didn't think this would be possible." The newsprint tested in Wellington was also mixed, in different ratios, with recycled de-inked newspaper and kraft paper from N.Z. Forest Products. Grades included the new 45 grams per square metre and the traditional 48.8 gsm. The lighter paper is more popular because it produces more pages of newsprint to

the tonne, lowering freight costs. Mr Ede said after the tests that newsprint was the best long-term prospect for the mill. "These tests have shown there is no real impediment why that option shouldn't succeed. They prove that the paper is good in New Zealand conditions." It would create 260 more jobs at Karioi. Mr Ede said the first stage of the testing — seeing if the paper could be produced — was now virtually complete, and a report would be made on this to the next directors' meeting. The second stage — the preparation of financial reports on the project — was also in hand.

the tonne, lowering freight costs.

Then equity partners in the venture would be considered. A number had shown interest.

“We want to negotiate proper equity arrangements and negotiate long-term contracts with people of substance.”

Mr Ede said a decision would then be made on the construction of the mill. It would take between 24 and 36 months and be smaller than the planned No. 4 machine at Kawerau.

he did not put a figure on the cost, but agreed that it could be around S2OOM.