Juken NZ's announcement that agreement had been reached with its employees' unions, allowing plans for the refurbishing of its triboard mill in Kaitaia to proceed, was described by Mayor John Carter as the best news ever for the town.

"I am delighted. Absolutely stoked," he said from Beijing where he is currently meeting potential investors in the Far North.

"This goes a very long way to securing the future of Kaitaia, and I can't tell you how glad I am about that."

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Northland MP Matt King congratulated the company and the unions for working together to achieve the best possible outcome.

"The result is one that everyone can accept, and I'm delighted about that," he said. "I'm sorry that some jobs will be lost, but the important thing is that the mill's future is guaranteed long term, and that's great news for Kaitaia."

Juken (JNL) told mill staff last month that it needed to make changes, including investing to refurbish the plant and technology, to return it to profitability. Those changes would include some job losses.

Regional Economic Development Minister Shane Jones welcomed "a good outcome for Kaitaia" with about 10 workers ending up jobless – fewer than originally feared – and a multimillion-dollar investment in the mill's future.

Initially 30 to 40 staff were to have lost their jobs in the modernisation and reduction from a seven-day-a-week operation to five.

However, he had been told about 30 workers had opted to retire, with entitlements, which meant fewer than 10 were left without work.

"So the figure is nowhere as intimidating as it was … It's still not perfect, but given that they are going to continue operating the mill, modernise it and spend tens of millions of dollars, it's a good outcome for Kaitaia."

It was "tremendously positive" that union leaders, stakeholders and management had been able to agree, Jones said.


Continued manufacturing capacity in the Far North meant an alternative to "unfinished logs disappearing holus bolus overseas". It was also positive for Māori because a lot of trees came from tribal-owned land.

Jones said he had met the owners of Juken NZ in Japan two weeks ago. They assured him their commitment to Kaitaia was solid but they still had concerns about future timber supplies.

Jones said he was working with Government colleagues, in particular Trade and Economic Development Minister David Parker, to see what could be done to ensure security of supply for local manufacturers.

New Zealand general manager Dave Hilliard said that the mill had to change to survive, including the way it worked. That meant reducing from a 24/7 operation to 24 hours a day, five days a week to meet the challenges of log supply and product demand, and allow for the maintenance required on the weekends.

"For the long-term future of this mill, both sides have had to make compromises - workers here have always had a four days on, four days off shift pattern - and we thank E tu and First Union for their work to find a solution that works for its members and the plant," Mr Hilliard said.

"This change means certainty for our people and the Kaitaia community about the future of this plant. We couldn't keep on running the mill at a loss seven days a week when we don't have the logs to put through it or the demand for that level of output.

"We've spent the past three weeks consulting with our people and the unions on the plan, including opening up voluntary severance to minimise the people impacted. Regrettably, some redundancies will occur under the proposal, but a number of people have indicated they would seek voluntary severance. Because of this we anticipate that few individuals will have forced redundancies.

"We'll be giving a minimum of six weeks' redundancy, even for those who have been with the company less than 12 months.

"We know these changes are not easy, but to make an investment of this size in a plant like this it has to stack up in terms of the returns on that investment over time. That's why we've had to take some hard decisions to make the mill safer and profitable, and secure the vast majority of the jobs," he added.

"JNL is committed to Northland, to securing long-term jobs for our people, and to growing domestic wood processing. These changes are vital to all of those."

The plan would resolve the major issues relating to plant, people and production that had seen the mill operating unsustainably. The machinery and technology would be refurbished, a process that would also addressing health and safety "challenges" at the ageing plant.

Production would be streamlined, and would match the supply of logs with demand for the mill's product in New Zealand and Japan.

Mr Hilliard added that one of the major issues facing the mill was a shortage of logs from Northland forests, and an uncertain supply picture in the future. The company was in discussions with the Government about the shortage and how it could be resolved.

Those discussions had been prioritised by Minister of Forestry and Regional Development Shane Jones, and were progressing constructively.