Mill sales spark fears over job cuts

By MIKE MATHER in Rotorua
The sale of timber industry giant Tenon's four Bay of Plenty mills to Carter Holt Harvey has gone unconditional, prompting fears some staff may be left out of work.

The $165 million purchase includes the Kawerau Sawmill, the Rainbow Mountain sawmill and Ramsey Roundwood operations near Rotorua, and a plywood mill at Mount Maunganui.

About 650 staff are employed at the mills. Most are expected to keep their jobs with Carter Holt but some redundancies are expected.

Carter Holt's external communications manager, David Jamieson, said it was still too early to say whether there would be a large number of job losses.

"We have to complete the integration before anything is decided," he said.

National Distribution Union wood secretary Jim Jones said he knew some staff at the mills were perturbed to learn who their new employer would be.

He claimed that Carter Holt did not have the best track record when it came to employee relations.

"But Tenon don't have the best of reputations either. It is a wee bit Tweedledee or Tweedledum."

He believed the majority of the mills' staff should make it through the transition unscathed. However, many of the management and administration staff, which was about 40 percent of the total workforce, might not be so lucky.

"There is going to be a bit of a double-up there."

A series of conditions imposed by Carter Holt, including the completion of an $11 million upgrade to the Kawerau Sawmill, have now been met, allowing the deal to go ahead.

It has been estimated the upgrade will see the Kawerau mill earning about $5 million more a year. New equipment allows the mill to process larger diameter logs and increase the speed of converting logs to sawn lumber.

Tenon will also increase kiln capacity at the Rainbow Mountain mill ahead of the sale.

It is understood the purchase is set to be completed on March 31, and will more than double Carter Holt's sawmilling capacity in New Zealand.

It already has sawmills at Thames and Putaruru and a plywood mill and roundwood plant in Tokoroa. However, the company closed its Tokoroa sawmill with the loss of 100 jobs in December 2003, and last July sold its Rotorua sawmill to a consortium of local businessmen.

Mr Jones said while some of Carter Holt's mills, such as the Kawerau sawmill, had a bright future, the company's less high-tech operations could face the chop.

"Carter Holt still operate a couple of museum pieces such as the Thames sawmill. They will always keep those mills they can [get] the best return on."

Engineering, Printing and Manufacturing Union spokesman Mike Sweeney said the company might face an exodus of mill staff before it took over.

"Some people will have an aversion to working for Carter Holt Harvey. They would have either worked for them before or [Carter Holt] would have a reputation that precedes them."

Mr Sweeney said while it was still early in the changeover process, he hoped the two companies would take heed of their staff's concerns, particularly where issues such as intellectual property rights were concerned.

The Tenon sale was the latest in a slew of mill ownership changes that have taken place over the past few years.

In late 2003 the Waipa Sawmill just south of Rotorua was bought by a local company, Waipa Corporation Ltd, owned by Phillip Verry and Gary Catley. Mr Catley has since quit the business.