Jobs are on the line at one of Northland's largest employers as the business looks to modernise its operations.
Forestry and wood processing company Juken New Zealand Ltd (JNL), which employs around 250 full-time staff across Northland, met today with employees to start consultation on a number of proposed changes at the Kaitaia Triboard mill
New Zealand general manager of JNL, Dave Hilliard, said the changes will involve some tough decisions but the move was integral to the long-term future of the mill.
The company is proposing to make a significant investment over the next few years to upgrade and modernise the mill. The move will see a shut down across parts of the mill to carry out the upgrade, a change to a more efficient operating structure, and investment in new technology and machinery to streamline production.
"This investment will result in a modern, safer and more efficient mill which can continue to be one of Kaitaia's largest employers well into the future," Hilliard said.
"We are being upfront, though, that the steps required to be taken to address the mill's issues are unfortunately likely to result in some job losses."
Hilliard said it was still too early to comment on the exact number of job cuts likely to result from the proposed changes.
"The final number of roles impacted won't be known until consultation with staff and unions has been completed and a final decision made," he said.
Hilliard said the mill in its current state was unsustainable due to a number of factors.
"The mill's machinery and technology is old, despite investment in recent years the site presents health and safety challenges that need to be urgently addressed, and the mill's production is severely constrained by inadequate and uncertain log supply in Northland," he said.
Speaking to the Herald this morning, Regional Economic Development Minister Shane Jones confirmed he had been interacting with the JNL executive team in regard to the proposed changes.
Jones said that any job losses are always "extremely disappointing" but added the changes were necessary for the business to remain viable.
Jones said he was heartened that the Japanese-based investors in the mill were willing to continue back the business in Kaitaia.
Junken is owned by parent company WoodOne, which was founded Toshio Nakamoto in 1990. The company has invested over $700 million into its forest and processing operations in New Zealand in the past 20 years.
Jones said that on his upcoming visit to Japan he would meet with the JNL owners and investors to discuss ongoing investment in New Zealand, particularly in Northland.
Jones added that he was also in talks with Housing Minister Phil Twyford to ensure that JNL-manufactured products are used for government housing projects in the coming years.
Juken NZ reported a loss of $31.7 million in the year ended March 31, compared to a profit of $31.1 million a year earlier. That included $75.6 million of impairment charges on plant, equipment and buildings, which were valued at just $47.6 million as at March 31, including $7.7 million of investment in the period. At an operating level, gross profit fell 10 per cent to $38.4 million on a 0.5 per cent increase in revenue to $221.6 million
- Additional reporting from BusinessDesk