Summit Wool Spinners' Oamaru plant is to close with the loss of 192 jobs after its parent company sold the business.
Japan's Sumitomo Corp confirmed today that it has sold Summit Wool Spinners plant to Australia's Godfrey Hirst, leading to the closure of the Oamaru plant.
Summit is New Zealand's largest independent spinner, supplying carpet and rug yarn for the domestic and international markets.
Members of the EPMU and FIRST Union were told of the decision at a site meeting this afternoon.
EPMU organiser John Gardner said Summit - Oamaru's second biggest employer - had been hit hard by the high New Zealand dollar.
"These redundancies are devastating for staff and for the whole community of Oamaru which relies so heavily on these jobs," he said in a statement.
An unnamed worker said: "I think there was a feeling that there was something going down. It was hard to take it all in. It was a lot of information to hear.
"It will take a bit to digest it all and make sense of it. There will be a lot of stunned families tonight.''
Greens co-leader Metiria Turei said the the jobs were "sacrificed because of the National Government's devotion to a failed monetary policy and its unwillingness to change with the times''.
"This week, manufacturers came to the Parliamentary Inquiry into Manufacturing and warned us that more businesses would close and more jobs would be lost unless the Government gets the dollar down to a fair level quickly.
"These 192 redundancies, and the other jobs that will surely be lost in Oamaru as the shock of the loss of its iconic employer ripples through the community, are proof that the manufacturers were not exaggerating in their plea for government intervention,'' she said.
Labour's finance spokesman David Parker said the current owners and workers of Summit were more victims of the high dollar, which was crippling exporters and costing jobs.
"This cannot go on. On Monday chief executives of major Kiwi companies told the Parliamentary Inquiry on Manufacturing that the high dollar is forcing them to cut jobs, reduce investment and, in some cases, head offshore or shut down.
"Our manufacturing sector outside primary industries is being hollowed out and the dollar is to blame. But National refuses to consider any changes that might lower the exchange rate,'' he said.
Sumitomo said the decision to sell was driven by a number of factors affecting trading results, including an unfavourable exchange rate and less local demand for wool carpets.
International demand for woollen carpet yarn had also been affected by the global financial crisis, Summit's managing director Harry Ogawa said.
From Sumitomo's perspective, Summit was becoming isolated from the parent's global textile business, he said.
The acquisition is expected to become effective from the end of February.
The plant was sold to the Godfrey Hirst subsidiary Canterbury Spinners, which operates plants in Lower Hutt and Dannevirke.
Sumitomo is one of Japan's largest listed companies.