The receivership of forestry company Claymark Group, which has sites in Rotorua and Katikati, has come as a shock to employees.
Claymark was placed in receivership yesterday.
The business employs 510 workers across six manufacturing sites in Bay of Plenty, Thames and Auckland, producing radiata pine wood products for export. Of those workers, 230 are employed in Rotorua and 160 in Katikati.
Grant Graham, Brendon Gibson and Neal Jackson, of financial advisory firm KordaMentha, have been appointed as receivers.
According to the receivers, the company has an annual turnover of about $160 million.
The receivership is limited to New Zealand and does not affect any of Claymark's US-domiciled businesses.
The receivers said their intention was to continue to trade the business while they worked through the key issues.
Claymark has four sites in the Bay of Plenty with three in Rotorua, including head office and one in Katikati.
KordaMentha partner and a receiver of Claymark Group Brendon Gibson said all employees were told yesterday and none knew it was coming.
"It would be fair to say it was a shock to some people."
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Gibson said it was difficult to tell staff.
"The people are important in any business of this nature."
He said they were realistic with staff about what they wanted to achieve and asked for their support.
It was now a matter of getting suppliers and customers on board, he said.
"So we can try to keep the business running while we try to find another buyer.
"If they turn up to work they'll get paid and we will try to work through the situation to see if we can find a buyer.
"No one lost their jobs today . . . We're maintaining the business as much as possible," he said.
"We don't know where this will end up."
Gibson said the process of looking for a buyer had not started.
"The aim is to be trading the other side of Christmas."
The receivership follows on from a failed deal announced in late August that would have NZ Future Forest Products take over Claymark Group.
"As a result of NZFFP not yet settling, the group came under increasing working capital pressure to stabilise the business and fund future growth," the receivers said.
"The Group has been unable to secure additional funding and, as a result, the board of Claymark has had to take the unfortunate step of requesting its senior debt provider to appoint receivers."
The receivers said the contract with NZFFP remained in place and they would try to see that through. Failing this, they would look for an alternative buyer.
The receivers would not say what the company owed, saying they were still working through this.
E Tū Union confirmed it represented the 20 workers employed at the Geddes Rd, Rotorua, site while First Union represented about 100.
"It's not a large number and we'll be working with them throughout the process," Rotorua organiser Phil Graham said.
Claymark managing director Mark Clayton confirmed he was committed to working with receivers to maximise stakeholder return.
He said his immediate focus was to help the receivers focus on the protection and realisation of assets and communicate with employees, creditors, customers and stakeholders.
NZ Wood Processors and Pine Manufacturers Association chief executive Jon Tanner told the Rotorua Daily Post Claymark was not a member of the lobby group, but it was "a major exporter".
"It is a very, very difficult industry because we are facing major trade challenges with China.''
Tanner said the receivership would have a "huge knock-on effect on local communities".
"You have got to remember that wood processing is a major industry in the regions ... It's bad news."
He said the sector employed 30,000 people in New Zealand.
"We are all in the same boat, we are all fighting the same adverse trading conditions. It just shows you how vulnerable these businesses are ... but not because they're inefficient manufacturers."
For forest growers, Tanner said it was important to have a domestic and export market.
"So when the local market diminishes in this way it creates a problem of resilience for those companies and you look these big forestry investors ... they'll be concerned that local processing manufacturing businesses are going under."
Robert Green, the chief executive of forest management company Timberlands, said Claymark was "a big and important and highly-valued customer".
"We have a great working relationship with them, and actually we really admire their work in the marketplace as well."
He expected the receiver would want to continue working with Timberlands.
"If we can strike terms we would be happy to do that."
When asked if the receivership came as a surprise, Green said: "It's fair to say I didn't walk into work this morning expecting this.
"As a business, we are mindful of all the people who are affected by this in the short term and we hope that there's a way forward for everybody."
Rotorua mayor Steve Chadwick said business success contributed not only to the economy but, through employment, the wellbeing of the community.
"It will be especially tough for those affected staff and our thoughts are with them."
Chadwick said she hoped the business and jobs would continue with the ongoing efforts to find a solution.
- Additional reporting: staff reporters