Steam is rising from the boilers again at Pan Pac after a 16 month clean up at a cost of over $300 million. Fair to say it wasn’t the best way to celebrate 50 years of business.
Cyclone Gabrielle struck with all its fury submerging the Whirinaki site with over 2 metres in water and more than 750,000m3 of silt. Pan Pac Managing Director Tony Clifford, a 30 year veteran of working at the site says at the time the cyclone hit, 3000 tonnes of ready-to-ship pulp stock was on site with just 40 percent able to be sent to customers. About 40% of kiln dried timber was above water and could also be dispatched. It took until October for any form of production from the site.
Pan Pac is wholly owned company by Oji Green Resources which is a fully owned subsidiary of Oji Holdings Limited and Tony says that little thought was given by its Japanese owners to not rebuilding due to how much was at stake.
Tony says in the days immediately after the cyclone its Oji shareholders were more concerned about the wellbeing of staff. It wasn’t until the end of the first week after the cyclone that decision makers turned to discussing the future of the site, the cost of a rebuild and ultimately whether Pan Pac’s strong presence in Hawke’s Bay would continue.
Tony says the Japanese owners probably had more empathy for the situation due to their country being at high risk of earthquakes, tsunami and typhoons. He says they did want to focus on resilience from future flooding disasters. “In Japan they get hit by typhoons every year, so they were concerned that there was a higher risk of getting hit again next year, so they wanted to look at building back higher.
“We have about a billion dollars of assets here and our insurance cover is about $80m, so I knew they wouldn’t walk away from that kind of loss. “I think in the first week it was very much about just keeping in contact with people and they were really wanting to know if any staff had been injured. At that point we couldn’t even get on to the site, which was still full of water and silt.”
Debris from the huge clean up Tony reassured them that although there is a risk of future weather events, “a lot of things have to come together to create a flood of that type of event, it’s all the preceding weather events and where it hits.”
“An earthquake would have been a different story. If all the buildings were down and all the driers were lying on the ground that would be different, but with the cyclone it was just water and silt and that can just be removed.”
Investing in a rebuild is good news when Pan Pac is one of the region’s most important businesses. As well as employing 440 fulltime staff at Whirinaki, it also has over 400 forestry contractors and indirectly creates over 3200 jobs across Hawke’s Bay. The business also contributes 6 percent of the region’s GDP ($1 in every $16).
Tony says building resilience at the site was very important for staff morale and other measures to minimise disruption from another closure include rebuilding the administration offices to two levels high, so that staff can work upstairs afterwards and sealing and protecting all electrical rooms. To minimise any future flooding, the Hawke’s Bay Regional Council stop bank protecting the site will be built higher than the current 8m RL (surveying measure) and will be lengthened to protect properties near SH2 and the Esk River mouth.
With no pulp or timber produced on the site for many months it provided Pan Pac’s competitors the jump in the market but by June lumber operations are back to 100% with the pulp mill back to 50% of capacity and forestry is back to 100% production.
Tony says fortunately 2023 was quite a slow year for its customers and the products Pan Pac supplies.
“So our competitors got the benefit rather than it being a recession for everyone they were able to do ok. Getting back towards full production “All our large customers have said that when we get back up and running they will order from us once again but it will take us time to get our market share back.
“Our sales team is in the market all the time, even after the cyclone. We still had our sales team catching up with clients and seeing how they were getting on and to provide updates on our progress.” As for a big and belated 50th celebration …
Tony quips that it might just be a sausage and bread.
