A major Northland wood processor may be able to re-employ some of its more than 100 workers following the impending closure of its Whangārei business due to log shortages.

Carter Holt Harvey (CHH) has decided to shut down its sawmill on Union East St that employs 111 people after major upgrades to its Kawerau branch.

The timber processing giant said its domestic customers were well serviced by its Kawerau and Nelson sawmills.

CHH timber chief executive Clayton Harris said the Whangārei operations would continue until early April with staff finishing progressively over several weeks.

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Affected workers were informed of the company's decision yesterday morning and the Amalgamated Workers Union (AWU) is working with CHH to secure them jobs within and outside Northland.

The union represents about half the 111 workers while the rest are non-union members.

The mill pumped about $5 million into the Whangārei economy annually, with much going to companies that supply CHH.

Tony and Clare Davies-Colley ran the business as TDC Sawmills from 1995 until 2006 when it was bought by CHH.

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AWU organiser in Northland Richard Palmer said between 25 and 30 jobs were potentially available for the affected workers at CHH sites in Ruakaka, Auckland, Tokoroa and Nelson.

"We are working through that process at the moment to see if those with the skillset want to transfer. The company is looking at relocation costs as well as reaching out to other companies such as Downers.

"There are still outstanding issues but we're looking to resolve those over the next two weeks. It's disappointing that 111 jobs are disappearing from Northland. They won't come back."

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Palmer said CHH employees in Whangārei included managers, supervisors, cleaners, processing workers, drivers, tradespeople and administration support workers.

The company allowed them to spend yesterday with their families on full pay and work is expected to resume this morning following a union meeting.

Harris said CHH board decided to close the sawmill after taking into account feedback during the consultation process.

"The decision has been made reluctantly and we know this will be a stressful and difficult time for everyone involved with the mill."

Harris said CHH would continue to work closely with the AWU and affected staff to ensure employees have the support they needed.

A shortage of log has forced the closure of Carter Holt Harvey's Whangārei sawmill with job losses for more than 100 employees. Photo/Michael Cunningham
A shortage of log has forced the closure of Carter Holt Harvey's Whangārei sawmill with job losses for more than 100 employees. Photo/Michael Cunningham

Northland Chamber of Commerce chief executive Stephen Smith said there would be various considerable run-off effects as a lot of local businesses have sizeable contracts with CHH.

"We need more diversification other than primary industries to soften the blow when something like this happens," he said.

IT software, arts, and the revitalisation of central Whangārei would all help in the long run, he said.

Whangārei mayor Sheryl Mai said while the closure may not have a big impact on the district's total employment, it would have a wide-reaching impact on CHH workers and their families.

She said NorthTec and the Northland Chamber of Commerce were currently working on initiatives to match employers with workers through projects such as the Provincial Growth Fund and Job Lab.

"The One Billion Trees project may also present future employment opportunities within the forestry supply chain throughout the mid north," she said.

There's a four to five year gap before the next lot of mature wood comes on stream for local timber processors.

Forestry Minister Shane Jones earlier said it was a bleak time for the Whangarei mill workers and he was not happy that so many logs were being exported before they reached maturity and they were not being milled in this country.

He said the government would look at legislation to secure a supply of mature logs for the domestic market.