A feasibility study into a US$250 million (NZ$393 million) investment in a new wood processing plant in Taupo by a Chinese company will be completed by early next year.
Enterprise Great Lake Taupo says it has been working for two years to find someone to build, own and operate a new sawmill, laminated veneer lumber and medium density fibreboard plant in Taupo.
China's Fenglin Group is undertaking a feasibility study, due to be completed by early 2016, and the company's senior managers recently visited Taupo.
The project is being supported by NZ Trade & Enterprise, the New Zealand government trade agency.
The plant could potentially employ 250 people.
"The support of the Taupo community and the local and central government will be essential to our success," the Chinese group's chairman, Cui Jianguo, said after visiting Taupo.
Enterprise Great Lake Taupo general manager Fritz Frohlke said the project will be hugely beneficial to the Taupo economy.
There are large pine plantations in the central North Island but a lot of the land has been converted to dairy farming after forests have been harvested.
The government put the brakes this month on the sale of the 14,000-hectare Lochinver Station to Chinese company Shanghai Pengxin.
China's Citic has previously owned forest cutting rights in the central North Island.