Napier is gaining 39 new jobs at Cavalier Corp's Awatoto spinning plant as the company consolidates its operations because of lowered demand for wool carpet.

Whanganui's spinning plant will be closed with 68 jobs expected to go, but 40 jobs would transfer from Christchurch where the company is closing its felting plant.

Cavalier CEO Paul Alston said the consolidation would cost up to $4.5 million, mostly in the form of employee termination benefits and equipment relocation, but payback would happen in slightly more than one year. He said he hoped Christchurch and Whanganui employees would move to Napier to take up the 39 roles "but it is early days".

"We are coming to Napier on Friday to talk to its staff and see if there are any questions. It is more business as usual for people in Napier."


The Napier plant, which has 124 employees, was in the news in 2011 when it shed 10 jobs due to a market shift away from wool carpets. Mr Alston said wool carpet was a top-end product worldwide but it lost market share over the past 10 years "so hence we have to align our capacity to meet the market".

Equipment would be transferred from Whanganui where it would fit on the existing Napier site. "That's one of the reasons why Napier was chosen," he said.

Another was Cavalier Woolscourers was next door, "saving considerable transportation costs". Cavalier Corp has a 50 per cent stake in the scouring plant.

In November the Commerce Commission approved a plan for a Cavalier Corp subsidiary to acquire New Zealand Wool Services International's wool scouring assets, including a Whakatu scouring plant.

Operations would be consolidated to Cavalier's Awatoto's plant.

The acquisition would create a national wool scouring monopoly but with the industry facing tough competition from China the acquisition would help keep scouring in New Zealand.

Cavalier Corp's main carpet rival, Godfrey Hirst, successfully sought a temporary stay on the acquisition pending an appeal to the High Court.