Sawmills shut in 3 towns

The small communities of Kaitaia, Kerepehi and Tairua are preparing for fallout from the closure of a timber mill operation that will leave 160 local people out of work.

The closure of Tanner Group's sawmills will leave 60 people out of work in Kaitaia, 60 without work in Kerepehi near Ngatea, and Tairua on the Coromandel Peninsula will lose 40 jobs in its community of 1500.

All staff received letters of redundancy this week with the required minimum of one month's notice for those being laid off first.

A number of staff will remain up to four months to complete the wind-down and all wages and holiday pay will be paid.

The Tairua sawmill had employed a father of three from Rotorua a fortnight before the closure was announced with site management unaware of the board's plans.

Describing the closure as a "tragedy" for the town, Tairua's business network spokeswoman Gloria Rennie said there was already a shortage of work for permanent residents and this was having a major impact on schools and essential services that relied on volunteers.

"The school rolls have been dropping and this is going to further impact as parents have to leave to find work.

"With property prices booming, a lot of older residents have cashed up and moved inland, and we have weekenders buying property which doesn't help our community.

"We have voluntary groups like the St John Ambulance that need people and are struggling at the moment."

The company blamed the strong New Zealand dollar and increased costs of infrastructure for losses in recent years. It sold its retail operation in Thames last year and reviewed its operating costs with a cutback on overheads.

Workers' houses have been put on the market in Tairua following the closure and already families are preparing to leave town.

"This is a great disappointment to me but I accept that the company has no other responsible choices," chief executive Alan Turner told staff by letter.

"Having assessed the options and obtained the very best advice, I see no other way forward."

The closure comes a month before an appeal to the Environment Court by residents of Whangapoua, north of Tairua, over the establishment of a timber mill by Blue MountainLumber.

Director David Warburton said Blue Mountain Lumber had been made aware that Tanners was available for purchase but he refused to elaborateon the discussions.

"If during the [winding-down] process somebody was interested in purchasing the site as a going concern, directors would look at it favourably," he said.

He added: "We're all sorry to have to be going through this but it's better to do it this way and make sure staff and everybody get what they're owed as opposed to leaving it in the hope something happens and have a third party move in."