Carter Holt Harvey looks at closing Tokoroa sawmill

More than 130 workers at wood processor Carter Holt Harvey's Tokoroa operations look likely to lose their jobs after the company today "announced a proposal" to close its sawmill and parts of its re-manufacturing plant in the town.

"The future of the sawmill has been under a cloud for some years, and the company has reached the difficult position where it believes it is unable to keep the mill operating," Carter Holt Harvey (CHH) said in a statement.

CHH chief executive Peter Springford said the company believed it had exhausted all its options to keep the mill running, "however we will be asking our Tokoroa sawmill and re-manufacturing employees for their views before a final decision is made".

The Tokoroa sawmill has a workforce of 90 salaried and waged employees and seven contractors. It currently produces outdoor, decking and framing timber for the Australasian market.

CHH's Tokoroa re-manufacturing facility has a workforce of 51 salaried and waged employees and six contractors. CHH is proposing to close the plant's kilns, planers, finger jointing and chopsaw operations, which employ 38 workers.

"Unfortunately given the age of the equipment and the market these products need to compete in, this facility is unable to be competitive and continues to lose money," Mr Springford said.

CHH was facing challenges such as energy price increases and the strengthening New Zealand dollar and didn't see any reduction in the cost of doing business in New Zealand in the forseeable future, Mr Springford said.

"We are operating in an increasingly challenging environment and it is a sad reality that there will continue to be casualties as the industry does what it can to improve its competitiveness internationally," he said.

"We will be working with our employees and aiming to give them clarity over the mill proposals as soon as we can."

Mr Springford said the company was well aware of the impact the closures would have the on the community and it would be "offering all the support and assistance we can throughout the consultation period".

Nearly 400 CHH employees were laid off at the company's Kinleith pulp and paper mill near Tokoroa last year. The company said in August this year than 70 workers would lose their jobs at its Tasman pulp processing mill in Kawerau.

Earlier this week CHH confirmed it was considering selling its tissue products arm, saying the business did not fit well with its decision to focus more on its core businesses of wood-fibre processing and marketing.

CHH shares were 4c lower at 183 at 10.45am today having traded between 157 and 192 in the past 12 months.

- NZPA