Kawerau's mayor says looming job cuts at Norske Skog Tasman Mill will hurt Kawerau and impact the entire Eastern Bay.
But Malcolm Campbell is adamant it will not break the town.
Mr Campbell said news yesterday of the company's proposal to close one of two operating pulp and paper machines, potentially resulting in big job losses, was not unexpected.
But he conceded the expected job losses were a setback for the town and said he felt for the families who would be affected.
"The possibility of job cuts has certainly taken the winds from the sail of a region basking in the afterglow of the Olympics.
"To say any possible closure would only affect Kawerau is crazy, this will impact on the entire Eastern Bay and also have tentacles reaching into other national businesses,"
He wished Norske Skog Tasman's announcement hadn't come, but there was no changing the situation.
"We've half-pie been waiting for it."
He believed that in 10 years' time, paper would no longer be produced in Kawerau.
"A long time ago I asked my councillors what would happen if the mills did shut down and, because of that thought, we have been working hard to ensure growth in other areas.
"A number of skilled people have been brought on board and we have several initiatives we are working on."
Tasman Mill general manager Peter McCarty said management was consulting with employees concerning the need to reduce capacity in the face of declining global and regional demand for newsprint.
The Tasman site would remain an important employer in the region and the mill would continue to produce newsprint for the New Zealand, Australian and Pacific Island markets, and was actively pursuing a range of renewable energy opportunities.
Kawerau New World owner Greg Dyson said the news was not good.
"It's devastating in a community like ours when there is already high unemployment. It's another kick in the guts for sure."
The effects would be felt throughout the Eastern Bay and possibly beyond, he said.
Mike Bryant, Bay of Plenty regional commissioner for Ministry of Social Development, said staff had contacted the Norske Skog Tasman Mill to offer support to affected workers.
"In these situations our focus is on helping affected staff find new jobs and, if needed, providing income support," Mr Bryant said.
"It is always a difficult time when a community faces closures of this nature and we would encourage anyone who is struggling as a result to talk to us to see how we can help."