News from Juken set to reverberate

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Opinion

Five years on from a restructure that saw Juken NZ lay off half of the 200 people working at its mill at Matawhero — as it stopped production of plywood and laminated timber products because of a slowdown in the Japanese housing market, to focus on high-value solid wood products — the mill that has been the major player in wood processing here for the past three decades looks set for closure.

Juken’s Gisborne workforce was told this week that ongoing financial difficulties and tough market conditions meant the Japanese family-owned company was now considering: 1) ceasing production until new markets and products can be found; 2) putting the mill up for sale and likely ceasing production while they look for a buyer; or 3) closing the mill permanently.

Permanent closure would be a major blow for the region, and the last thing we need as many businesses and households continue to struggle in the wake of severe weather damage and ongoing high inflation.

Finding a buyer for a mill needing significant investment, in the current market, might be a stretch.

Trust Tairāwhiti and central government have each invested tens of millions of dollars in recent years to support wood processing growth in the region, with some success.

There will likely be little interest in putting more money into that effort (in its last two annual reports the trust said it wanted to diversify its “sector investment portfolio” to accelerate the digital technology and food and beverage sectors), and they might now wonder if some support for the existing big player might have had the best payoff, in hindsight.

Juken Nissho was formed for the 1990 purchase of 600km2 of previously publicly owned forests in Northland, the Wairarapa and Tairāwhiti — including the Wharerata and Patunamu forests here.

Parent company WoodOne Ltd has invested over $700m in its forests and processing operations in New Zealand.

Founder Toshio Nakamoto had a soft spot for this district, where he purchased the grand old Acton Estate in 2002. His son Yusho is chairman and president of WoodOne and has been a director of Juken NZ since 1991.

When Juken closed its Gisborne plywood line in 2018, some of the workers were taken on by Far East Sawmills as it restarted the former Prime sawmill.

Back then Juken said its aim was to consolidate the operation here into a sustainable business and over time expand its solid wood products for high-end residential and commercial interior cabinetry, furniture, doors and feature walls. Selling most of this into Japan, the weak yen — recently hitting a 53-year low — will have made the economics extra difficult.

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