The new Japanese owners of the pulp and paper manufacturer arm of Carter Holt Harvey are to invest $30 million into an upgrade of the company's Penrose, Auckland, bag-making facility, which services the dairy, food, agriculture, minerals, chemical and building sectors, among others.

Oji, a global pulp, paper and packaging company based in Japan and the Innovation Network Corp of Japan bought CHH unit last April, promising to inject new capital into the operations.

The project will extend an existing hygiene hall and upgrade critical hygiene elements of the manufacturing process, as well as new bag-making machines and on-site warehousing.

Of particular importance is CHH's supply of food grade packaging for the dairy industry, with production exceeding 100 million bags annually, CHHPP chief executive Jon Ryder said in a statement.

"When we have finished the project in 2016 we will have a leading dairy bag manufacturing facility in the Southern Hemisphere, meeting current international food safety contracts," he said.