TGL to close three plants, about 160 workers to lose jobs

About 160 staff employed at three milling and processing sites owned by timber company Tanner Group (TGL) will lose their jobs as the company winds down operations and closes its plants within the next four months.

TGL's mills turn out a range of timber products, structural framing, decking and other items for export and domestic building markets.

The plants closing are at Kaitaia (Kaitaia Timber) with 60 staff, Kerepehi (Hauraki Plains), and at Tairua in the Coromandel district, with 100 staff between them.

A statement by TGL chief executive Alan Tanner yesterday, released after staff had been told of the decisions, said the company's board saw no alternative to a managed wind down and closure over the next four months. Mr Tanner blamed ongoing loss of profits sustained by the business through the strong New Zealand dollar reducing company revenue, and infrastructural demands in New Zealand pushing up costs.

He said the company had "no other responsible choices" but to wind down and close the three mills but emphasised the move was neither a receivership nor a liquidation imposed by a third party.

Staff at the three plants are to gradually become redundant as the number of people required to run business decreases.

All employees will get letters today setting out how much longer each will have to work before their job is terminated.

Everyone will get at least one month's notice and Mr Tanner said that to complete the wind down of the company and its subsidiaries, some staff would be retained for up to four months.

All wages and holiday pay owed to employees when they were laid off would be paid.

TGL director David Warburton said later that the strength of the NZ dollar had been the main driver of the decision. But other factors included rising infrastructural, fuel and export freight costs, as well as compliance and regulatory charges.

Mr Warburton said there might be an opportunity for TGL to sell one or more of the three plants within the next four months which, if it was a practical proposition, meant that any such plant could continue operating under a new owner.

New Zealand Timber Industry Federation executive director Wayne Coffey said the effect of the NZ dollar's strength was very serious right across the industry.

Compliance costs involved in trying to be a manufacturer were also rising and the decision by TGL came as no surprise, Mr Coffey said.