The Chinese Fenglin Group recently announced that the company has decided to terminate its intention to invest a massive wood processing project in New Zealand.
According to Chinese media, the reason for the termination is due to the fact that Fenglin is undergoing a major asset restructuring plan, and the company can not take into account the New Zealand project. Therefore, Fengling decided to suspend the feasibility study for the investment, and company officials said that there are no intentions to restart the feasability study in the future.
Chinese Fenglin Group planned an investment of $250 million to build a sawmill and wood-processing plant in Taupo, New Zealand, last year. Rumours say that the China-based company has put the project on stop, as they became interested in buying a competitor.
Fenglin Group was initiating a study on the possibility of moving part of its operations near Taupo after they had been appealed to by the economic development agency Enterprise Great Lake Taupo (EGLT) in January 2015.
EGLT has been searching for a company to do a feasibility study on constructing, owning and operating a sawmill, laminated veneer lumber and medium density fibreboard plant near Taupo, for two years. According to the initial plan, radiata pine logs would be processed using geothermal energy before being shipped to China, as Rotorua Daily Post stated.
In September 2015, the Chinese group sent a delegation to Taupo as to see about the case and they also appointed a project director. The Taupo business option was very attractive, as it had easy access to forestry, geothermal heat, central location and labour force. The Enterprise Great Lake Taupo general manager Fritz Frohlke stated that there $1 million invested for Fenglin Group to do the feasibility study.
Frohlke added that the payback would come between 4 to 6 years. Money from the Strategic Investment Fund of New Zealand Trade and Enterprise were also invested in the project. Yet, the Taupo study was stopped in March 2016 because the Fenglin Group’s board of directors decided to go for the purchase of Weihua Corporation competitor.
Guangxi Fenglin Wood Industry Group Co.,Ltd. is principally engaged in the production and distribution of middle and high density fiberboards, plywood, shaving boards, as well as forest management and restoration business. The company's fiberboards are mainly applied in furniture, wood floors, buildings, decorations, middle and high cars and ship fitments, handicraft products, high grade loudspeaker boxes, instruments and electronics, among others. Its plywood are primarily used in furniture, floor boards, decoration materials and buildings, among others. The company mainly distributes its products under the brand name of Fenglin. The company's forest management and restoration businesses include growing trees planting, stock growing, as well as woods and stocks distribution.
