Napier wood plant shuts - 41 jobs gone

A soft house construction sector in Australia has been given as one of the reasons for Napier's Pacific Wood Products company shutting down, with the loss of 41 jobs. Photo / Paul Estcourt

Napier timber products factory Pacific Wood Products (PWP) is to close with the loss of 41 jobs.

In a joint statement from managing director Doug Ducker and chief executive Tony Clifford, it was announced its Pandora plant had started an "orderly closure" to allow employees and contractors to find new jobs and for customer commitments to be fulfilled.

"The business has struggled to maintain financial viability, given the current conditions of low demand for its products," the statement said.

"PWP employs 41 staff to manufacture a range of timber products for appearance grade use in house construction and renovation. This includes fascia, weatherboards, door jambs, posts and window reveals. The majority of the products manufactured are exported to Australia.

"The demand for these products in Australia has been soft now for 15 months and there is very little sign of a recovery within the next 12 months.

"Housing starts and spending on home renovation have been affected by both flooding and general economic weakness. Further to this demand has been the influx into Australia of cheaper products from Chile, which have further eroded prices."

Companies with value-added products such as PWP have been seen as the key for Hawke's Bay to lift itself out of a commodity-based economy but the high New Zealand dollar is problematic.

PWP is a wholly owned subsidiary of Japan-owned Pan Pac Forest products NZ, which operates a large sawmill and pulpmill at Whirinaki, north of Napier, using trees from its own forests.

Pan Pac employs 370 throughout its lumber and pulp divisions and more than 470 are employed by independent contractors in the forestry division.

Last year the company announced a $70 million upgrade to its pulpmill to make a higher grade product.