Possible Whangārei mill closure sign government needs to intervene in the industry - union

The 111 workers at Carter Holt Harvey's Union East St timber mill in Whangārei, above, face an uncertain future with the company looking to potentially close the site. Photo / John Stone

The government needs to step in to secure a steady supply of mature logs to protect the country's timber milling industry, a union official representing some of the 111 workers at a Whangarei mill that is facing closure says.

Carter Holt Harvey's (CHH) Whangārei sawmill, in Union East St, might shut, after major upgrades to its Kawerau branch. The sawmill employs 111 people and CHH chief executive Clayton Harris says domestic customers are well serviced by its Kawerau and Nelson sawmills.

Harris said the company was reluctant to shut the - but the sawmill's been facing log shortages for some time. Staff will now be consulted, before the future of the mill is officially decided.

Maurice Davis, National Secretary of the Amalgamated Workers Union, which represents more than half of the workers at the Whangārei mill, said the possible closure comes after two other mills in New Zealand have announced they will close.

Davis said the workers were stressed out about their future and it was a blow to them to have the risk of losing their jobs so soon into the new year. He said the main problem was that there was not enough mature logs for NZ mills to use.

''For the last few years (forestry owners) have been selling logs that have not reached full maturity. They are immature logs and you'll be hard pressed to find a mature log - that's 25 years old or more - in Northland at the moment because they are getting sold oversees before they get to that stage,'' he said.

''So there's a four or five year gap before the next lot of mature wood will come on stream and that's leaving major problems for our sawmills.''

He said the mill pumped about $5 million into the Whangārei economy annually, with much going to companies that supply the mill, and that money would be lost from the community.

Davis said the Government needs to step in to ensure there is a secure supply of mature logs in New Zealand for local mills before allowing immature logs to be exported overseas.

Forestry Minister Shane Jones said it is a bleak time for the Whangārei 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.

''These trees have been cut down early for overseas markets. I will hold the NZ-based forestry consultants to account for that. Most of the forest owners rely on professional consultants and (the consultants) have sold New Zealand down the river,'' Jones said.

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

Jones said the forestry consultants may think he's not able to do that, but a precedent had been set with Fonterra having to make some of its milk available for the domestic market by law.

Meanwhile, the Wood Processors and Manufacturers Association said it deeply regrets the announcement of intent of closure of another wood processing mill in New Zealand and the loss of yet more jobs in the regions.

''The government is fully aware that the demise of wood processing firms is being caused by a highly distorted domestic market for logs," Chairman Brian Stanely said.

''The prices for logs in New Zealand have been driven up to unprecedented levels over recent years by foreign buyers operating on subsidies provided by their own countries.

"These subsidies enable foreign buyers to artificially inflate prices here, effectively capturing the domestic log market by creating some of the highest softwood log prices in the world. The fact that this grossly unfair market is occurring under NZ's Free Trade Agreements with these countries should be extremely concerning to all New Zealanders.''