Timber processing company Carter Holt Harvey is proposing to cut the staff at its Marsden Point plant in half as it grapples with unprofitability.

The Herald understands that there are currently 325 staff working at the plant and the company is proposing to restructure the business and reduce staff numbers to 160.

This comes following the closure of the company's Whangārei mill in February, where more than 110 jobs were axed.

Carter Holt Harvey confirmed that it had begun consultation with staff in its laminated veneer lumber (LVL) business to restructure tit into a smaller domestically-focused operation.

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"The proposal reflects our serious concern that the export part of the LVL business, which accounts for approximately 70 per cent of our production and sales volume, is unprofitable and the business as it operates today can't continue," Prafull Kesha, chief executive of Carter Holt Harvey, said in a statement.

He said closure of the Marsden Point LVL plant remained an option.

"While total closure has been considered and still remains an option, we have identified that a smaller domestically-focused business may be more viable than the current business (which serves both the export and domestic markets) with a better chance of long run survival."

The restructure was not a direct result of Covid-19, the Herald understands, though the pandemic had impacted the business.

Kesha said Carter Holt Harvey was working closely with the union and affected staff.