Gisborne sawmill JNL has made almost half its workforce redundant, as it shows its business transition to a more value-added product is not as seamless as fellow Japan-owned company Pan Pac.
Ninety staff lost their job at JNL last month, following its decision to move away from producing building materials like plywood and laminated veneer following a building slump in Japan. The company plans to move into high value products.
Following the shrinking market for newsprint pulp Pan Pac sought new markets with a higher-grade pulp, spending more than $22 million upgrading the capability of its Whirinaki pulp mill in Hawke's Bay.
The JNL job losses haven't been all bad news. First Union says some who took the voluntary redundancy payment were close to retirement. Others were snapped up by Far East Sawmill which hired 60 people to reopen a mothballed plant.
Eastland Wood Council chairman Iain McInnes said the wood industry was contributing to a "booming" Gisborne as a once-in-a-generation spike in timber supply means strong overseas demand.
"Good workers are in demand here," he said.
"If you go through the paper, all our contractors are looking for more workers. Even the forestry companies are looking for more workers and when you have a shortage of supply that actually helps push prices up.
"So those guys out there working – particularly in the harvesting, the cartage, the whole industry through to silviculture – are in demand. That pushes the prices up, so they are doing very well."
The volume of logs harvested was expected to double over the next five years, further increasing the value of good workers which was "a very good problem to have".