“Now that we have made the decision to go ahead with these changes, we will work through a process to confirm exactly which roles and how many will go.
“This is a tough time for our people and their families. We’re a major wood-processing and forestry employer in Gisborne, so a decision like this that cuts local jobs is difficult.
“But for local companies like us, it’s even more critical for the future of our communities that we consolidate into a sustainable business. We can only do this by making high-value products where we have a competitive advantage, so that we can keep growing job opportunities here into the future.”
RedundanciesAbout 100 roles were affected by the changes but the final number of redundancies would be fewer because some staff had applied to take voluntary severance.
Some people would be redeployed into roles in the sawmilling side of the business, he said.
“All staff have redundancy pay provisions in their contracts. Part of the extra assistance we will be putting in place is to give a minimum of six weeks pay and four weeks notice for those who have been here for less than a year.”
The company has spent the past two weeks consulting with staff and unions about the changes, which follow a decline in demand from Japan, the mill's main plywood market.
Mr Hilliard said consultation came up with alternative proposals to mothballing the plywood production line and reducing the production of SLVL (veneer) products.
“We’ve carefully considered the feedback received, including a suggestion to start producing plywood for ‘affordable housing’ in New Zealand.
“However, given the age of the machinery and the investment required to upgrade it to produce different plywood products, these proposals don’t give us a viable solution to the issues we’re facing.
“The proposal asked for the decision to be delayed. However, we cannot continue sustaining these losses. Delaying the decision does not change the fact that the machinery cannot economically make product suitable for the low-cost housing market.”
Pine processingThe Juken mill at Matawhero opened in 1994 and employs about 200 full time employees. The mill processes radiata pine from the company’s East Coast forests to produce a range of solid wood and engineered wood products like plywood, LVL and SLVL, mainly for the Japanese housing market.
Work has started with staff, unions, WiNZ, Ministry for Social Development, local MPs, iwi, community and business representatives to support people through the change process.
“We are also working with a number of local employers, including Far East Sawmills who have come forward to offer our people new jobs.”
The sale to Far East Sawmills of Prime Sawmill at Matawhero, which has been empty for about seven years, was announced last week. This means there will be 50 to 60 new jobs in place by April.
Far East plan to invest a further $9 million initially to upgrade ageing technology to improve efficiencies.
The company has a goal to run multiple shifts, eventually employing up to 100 staff.
