A looming closure of the Whakatāne Mill is being described as a "devastating blow" as residents now worry about the futures of the 210 workers facing job losses.
The Swiss owners of the mill which, for 80 years, has been the backbone of jobs for locals, have proposed to close the site this year.
The possible closure comes after the mill was not able to secure a regular and profitable contract, meaning the sawmill was no longer financially viable.
The site produces paper and packaging products and it had unsuccessfully been on the market for two years.
Workers were told on Tuesday and a consultation process was now under way before a definite decision was made.
Mill general manager Juha Verajankorva said they had begun consultation with staff on a proposal to wind up the business and close the mill.
Under the proposal all staff at the mill would be made redundant by July, the plant decommissioned and the site remediated.
Whakatāne resident Raiha Jackson, whose late father Muzzy Keepa worked at the mill for more than 30 years, said there was a sadness in the town.
She said locals now feared what would happen to those 210 households and their families.
"I work in a kohanga and there are a few young families there with husbands who work in the mill. They are stressing and the wives are trying to say 'wait until we know more' but they are worried too about the impact on the kids.
"There are a lot of Māori families predominately employed at the mill and they are aged under 30. They have homes and some have mortgages to pay."
Jackson said the mill was not only the biggest employer but it had a "huge" physical presence in the town.
She said if her father was still alive, the news would sadden him and as a staunch union man he would be demanding the union do more to ensure the families were well looked after.
"Mills have always been temperamental but it's about the negotiations unions have and informing the employees. To me, if the consultation is not sorted properly that will impact on the community."
Manahautū/chief executive of Te Rūnanga o Ngāti Awa, Leonie Simpson told the Rotorua Daily Post the Whakatāne Mill had been a fixture in the town for more than 80 years.
"The consultation on the proposal will mean a lot of uncertainty over the coming months, and this will be a very stressful time for the over 210 staff and their whānau.
"So we will certainly be watching closely to see that all appropriate support is provided by the company and government agencies.
"Until the consultation is complete we cannot comment on any wider issues," Simpson said.
First Union transport, logistics and manufacturing secretary Jared Abbott said there needed to be changes to Government policies if it wanted to avoid "devastating waves of redundancy".
Options included a change to the regulation of export log prices and seeing the Government buy more wood through its procurement policies.
"If we want well-paid jobs in the regions, we need to invest in local manufacturing and do everything we can to avoid closures like this."
Abbott, whose union looks after about 100 staff, said there were opportunities to make the most of the existing plant for the production of pulp products in Whakatāne but it would require Government support.
"The Government should look at these closures as a crisis."
He said the union would provide support to members up to and following the closure of the plant, including finding jobs for workers to transition into.
Whakatāne mayor Judy Turner said the news was a "huge shock" and they were saddened to hear it.
She said the mill was the district's largest private employer and was "quite a big thing" for the town.
She said her thoughts were with those employees and contractors whose jobs were on the line.
Toi Eastern Bay of Plenty Development Agency chairman John Galbraith said in a statement he was confident with the right support and leadership the board mill could be repositioned and he looked forward to working alongside the mill team and Government to explore alternatives.
The agency wants help from the Government to find solutions that would allow it to stay operating.
"The recent strategic review of the Norske Skogg Mill in Kawerau shows that the entire wood fibre processing sector is facing continued challenges and a proactive and co-ordinated approach to supporting this sector needs to be undertaken," the statement said.
"In many cases the wood processing sectors receive significant subsidies from their governments which makes competitive production in New Zealand a significant challenge. This is despite New Zealand's competitive advantage of having one of the world's largest sustainable plantation forests and renewable energy."
He said removing the Whakatāne Mill from the matrix would likely reduce the efficiency of the other mills in the region, which is a significant concern and create further head winds.
Prime Minister Jacinda Ardern's office has been approached for comment.
Waiariki MP Rawiri Waititi said he was saddened to hear of the potential closure and was to organise a hui with those impacted.
"The mill is a crucial employer to whānau Māori and residents of the region and I feel for whānau who will be affected.
"It is my duty to best support those whānau who need it, so my team and I are doing all we can to reach out and arrange hui with those affected to see how we may do this."
Labour's East Coast MP Kiri Allen said it was a "devastating blow" for the community after such a tough and challenging year.
"Any job losses are distressing and my thoughts are with the affected workers and their families. I know what great work they do and how they contribute so much to our region."
She said she had been talking to a number of her colleagues since Tuesday night about how the Government could best support the workers facing redundancy as well as the Whakatāne community.
"I absolutely love this place. It has heaps of potential as we move to a sustainable economy. Every region has a role to play in our Covid recovery, building on their unique features to attract new investment, retraining and upskilling and crafting a new way forward. Ours is no different and I'm sure there are many exciting opportunities ahead."
Labour List MP and former Waiariki MP Tāmati Coffey said it was disheartening news on top of the tragedy and challenges of Whakaari and Covid-19 which have "tested the wairua of Whakatāne and our wider Eastern Bay whānau".
"While we have been working behind the scenes to avoid this situation for over a year now, my thoughts are particularly with all the staff who are adjusting to this unsettling news, and trying to figure out what it means for their tamariki rangatahi."
Coffey said there was definitely a future for wood processing in the Whakatāne area.
"However, I want to be upfront with our whānau and acknowledge that Government will not have all the answers. Partnership is in the foundation of our nation and partnership will be what takes our region forward.
"As we look into whether the mill is currently configured to make the best product to meet current demand, East Coast MP Kiri Allan and I will continue to work as hard as we can, to bring mana whenua, councils, business, our community organisations and Government together, to figure out how we attract more business and investment back into the Eastern Bay."
He said the Government had been moving fast to create jobs and strengthen the wider forestry industry.
"These actions include investing heavily into the aquaculture aspirations of our iwi in Ōpōtiki, creating jobs throughout the Eastern Bay with our $96.5 million boost for marae upgrades, and moving the centre for Te Uru Rakau The New Zealand Forestry Service to right here within the Waiariki."
He said Forestry Minister Stuart Nash was also looking at securing jobs by pulling together a Forestry and Wood Processing Industry Transformation Plan in partnership with industry, iwi and other stakeholders.
National East Coast candidate in last year's general election, Tania Tapsell, said this would be a devastating hit to Whakatāne.
"Behind every one of the 210 workers are families. Everything needs to be done to help them get through what will be an extremely challenging time.
"The Government has talked a big game about regional investment but we're still seeing a failure to support our local businesses."
Tapsell said the Government needed to take industries such as forestry and farming seriously and support them through these temporary crises if regions were to thrive.
"The Government must take this seriously and invest in wood processing so we can add value locally instead of sending materials overseas just to import the final products back."
A statement on the Whakatāne District Council Facebook page said the council was "shocked and saddened" to learn about the proposal.
"Our thoughts are with everyone employed at the mill, their whānau and friends - and also those people and companies who contract to the mill. Our first concern is to ensure that people directly impacted by the announcement are being supported through this very unsettling time."
The statement said the council would work closely with Economic Development Agency, Toi EDA and others to better understand exactly what is being proposed and how it could help.
Rotorua sawmill Red Stag chief executive Marty Verry said the closure was "devastating for Whakatāne".
"There is a long-term trend in wood processing towards consolidation around a smaller number of larger mills that continuously invest in technology, automation and scale. Unfortunately that mill is on the wrong side of that equation. We are seeing it with sawmills as well, and there is little one can do about that."
He said Red Stag was continuously recruiting as it grew, so any displaced employees with skills and a strong team work ethic should keep an eye out for jobs.