Construction begins on Waikato recycling steel plant

Construction has begun on a fast-tracked structural steel manufacturing plant at a 53-hectare site in the Waikato region, with production set to start by the end of 2029.

With investment of more than $100 million, the project is the brainchild of National Green Steel director Vipan Garg, who immigrated to New Zealand from Ludhiana in the Indian state of Punjab in 1995.

"Once fully operational, the plant will process about 200,000 tonnes of recycled steel annually," Garg said.

"[It] will reduce the country's structural steel imports and reduce the export of scrap steel," he said.

"Based on current import volumes and price differentials, our plant could realistically reduce foreign exchange outflows by up to $320 million per year, even after accounting for the loss of scrap export earnings.

National Green Steel has already set up collection yards in Auckland, Wellington, Hamilton, Putāruru and Christchurch - where metal is recovered from end-of-life vehicles, sheet metal and beams.

"We as a country currently don't re-use steel, which means most of our scrap metal is exported. Our project will change this," Garg said.

"We will be using state-of-the-art electric furnace technology to recycle and manufacture structural steel right here in New Zealand, and that too with a very low carbon footprint."

Compared to traditional methods of producing steel, which emit 2-3 tonnes of carbon dioxide to produce 1 tonne of steel, Garg promised his plant would be more efficient.

"As we will be recycling steel, our average emission will come out to be between 200 and 300 kilograms of carbon dioxide per tonne of steel produced," he said.

The Hampton Downs project is expected to generate hundreds of jobs in the region, which has pleased Waikato District Council Mayor Aksel Bech.

Bech welcomed the decision when the project fast-tracked approval was announced in a statement in March, noting it represented a "major investment in advanced manufacturing, jobs and skills within the district".

"The project is expected to create around 200 skilled jobs, supporting high‑value employment and building capability in advanced manufacturing," Bech said.

"It will allow New Zealand to recycle and manufacture structural steel here at home for the first time, using scrap metal sourced from across the country rather than exporting it offshore.

"The fast‑track process has provided certainty for an investment that will support employment, innovation and a more sustainable construction sector, while still being subject to robust conditions."

In addition to 200 direct roles at the new plant that will receive remuneration rates that are significantly higher than the Waikato average, 25 to 30 people would be employed to operate the shredder and supporting roles, he said.

At a ground-breaking ceremony last Thursday, Prime Minister Christopher Luxon hailed the proposed plant as a "wonderful facility".

In a social media post later, Luxon highlighted the plant as a model of circular economy, with all scrap metal being recycled and processed in the country once the plant is commissioned instead of being exported overseas.

A chartered accountant by profession, Garg, who struggled to get a job in his field after moving to New Zealand, ran several retail outlets for 15 years before starting his metal recycling business in 2010.

Since 2019, he has also operated a metal processing facility shredding cars in Ludhiana, contributing to India's circular economy through recovery and recycling of ferrous scrap.

"We are [now] bringing this expertise to New Zealand," Garg said.

"We have chosen to build the new plant in New Zealand because of a stable regulatory environment, access to renewable energy and a growing demand for structural steel."

Garg said the availability of locally sourced structural steel would reduce construction costs in New Zealand, particularly in high-growth areas such as Auckland.

"Our exposure to international price volatility amid shipping disruptions will be reduced, while construction companies will have certainty in supply chain management," he said.

"This will strengthen our balance of payments and support the country's transition to a lower carbon, circular economy."