Pan Pac Forest Products is spending more than $70 million on upgrading its pulp mill at Whirinaki, north of Napier.
The mill, a wholly owned subsidiary of the Oji Paper Company in Japan, produces lumber, wood chips and pulp for export.
Pan Pac also owns 33,000 hectares of mainly radiata pine forest.
Managing director Doug Ducker says the upgrade is the first at the pulp mill in more than 20 years.
Mr Ducker says it involves installing equipment for state of the art bleaching capability which will upgrade the quality of the mill's product.
He says that will enable the company to access a wider global market rather than the traditional market it has been supplying in Japan.
Mr Ducker says there are markets for the higher-grade bleached pulp in China and other parts of Asia.
He says the development, which includes the construction of effluent treatment tanks, should be completed by April.
