About 210 Whakatāne people could be jobless by June after news Whakatāne Mill will close.
But a union advocate and local MP still have hope jobs could be saved if the mill is repurposed.
Management at Whakatāne Mill Limited broke the news of the closure to just over 210 staff on Tuesday.
It follows unsuccessful attempts to sell the mill, which is Whakatane's largest private employer and has, for more than 80 years, produced paper and packaging products, mostly for export.
At this stage, the company plans to stop production on June 21 and then begin decommissioning the plant. The expected final closure date is June 30.
General manager Juha Verajankorva said it was a "very tough day".
Verajankorva said all staff at the mill would be made redundant, and most would complete their roles by the end of June. A small group would be retained to complete shut down and decommissioning work.
East Coast MP Kiri Allan said she'd had multiple meetings since the initial proposal to close the mill aiming to work out a commercially viable solution.
"The news confirmed the feedback we'd been getting there had not been any purchaser that could take on the mill.
"No stone has been left unturned in terms of the possibilities of the future of the mill.
"I'm still hopeful someone from the private sector might see commercial viability."
Allan said many workers at the mill were fourth-generation workers and the announcement was "devastating".
She said they were also looking at ways to "absorb some of these skilled workers" if the mill did close, perhaps working on major projects the Government has invested in across the Eastern Bay.
First Union transport, logistics and finance secretary Jared Abbott echoed Allan's comments.
"What we really want to do is get something continuing on that site or nearby to support these workers but also the economy. They were bringing in hundreds of millions of dollars every year."
He said feasibility studies had been done into how the mill could be repurposed to meet demand.
This included converting the mill to a plant that could make sustainable packaging or a plant to turn paper waste into pulp.
"This site puts over $20m of wages into the local economy every year. To keep business going makes perfect sense from a national perspective.
"There are plenty of staff but it will take a bit of investment and support from the Government."
Abbott said the closure announcement hadn't come as a surprise to staff but they were still "gutted".
"People did know things weren't rosy."
He said the union would continue to support its members to transition into other jobs.
"There are not these kinds of jobs in that region; well-paid jobs with secure hours. These are working people bringing in good income which is going into the economy."
The closure of the mill followed a decision by parent company SIG Combibloc AG to source its liquid paper board from a lower-cost provider. This meant the company would lose its major customer, accounting for 80 per cent of its sales, Verajankorva said.
"This loss of customer, combined with the serious challenges that the operation has faced for some time, means that the operations are no longer viable."
E tū union spokesman Raymond Wheeler said the announcement of the closure was "devastating" for local industries.
Wheeler said job opportunities in the area were limited, and emphasised the urgency around the Government's work on an Industry Transformation Plan for the forestry and wood processing sector, if local manufacturing was to survive.
Meanwhile, Waiariki MP Rawiri Waititi said he had adopted a "Whānau Ora approach" to addressing the Whakatāne Mill closure.
Waititi said there had been talk about establishing a transition programme bringing relevant agencies and organisations together to work with all individuals on their specific needs and aspirations.
"We need to be proactive, putting politics and egos aside to work together over the next two and a half months to release as much pressure as possible from our whānau while supporting them towards tangible solutions and pathways," he said.
"I will be deploying my team to support the co-ordination of these efforts and will ensure from my end that all relevant agencies in the region are going above and beyond to take care of our people."
Labour list MP Tāmati Coffey said in a written statement the importance of the closure of the Whakatāne Mill to our community and Aotearoa's forestry industry "cannot be underestimated".
"Government has been working with the mill for a more positive solution to this situation since 2019, as soon as we heard a word of the current owners' aspirations to review their ownership.
"While I am gutted our combined efforts have proved unsuccessful, East Coast MP Kiri Allan and I will be working hard with Ministers from Forestry through to Social Development and Employment, as well as iwi and local community leaders to ensure the best support is in place for families affected by this news."
Coffey said the Government was "working hard to open up land development opportunities on whenua Māori", and was looking at formulating a forestry and wood processing industry transformation plan.
Whakatāne mayor Judy Turner said the impact of the closure on the district could not be underestimated and it would be felt beyond those who immediately lost their jobs.
"The impacts on all sorts of businesses that have no direct relationship with the mill, but actually rely on the custom that the workers provide."
She said the council would work closely with Toi EDA and other agencies to explore the wider opportunities.
Toi Eastern Bay of Plenty Development Agency general manager Karl Graodn said the news was "devastating" for those affected.
He said the closure was an implication of selling raw lumber off-shore meaning the added-value sector found it "extremely challenging" to compete at an international level.
He said they were asking for Central Government and ministers to work with the sector to find a solution that encouraged an increase in value in New Zealand lumber.
He predicted this would be the "first of many" wood processors to close, as had been the case with timber.
"This is a Bay of Plenty problem, this is a wood and forestry sector problem. We are fearful that this situation will disproportionately impact Māori above all others."
- Additional reporting Cira Olivier