Oji confirms mill closure, 75 jobs to go

Oji Fibre Solutions has confirmed it will close its Penrose paper recycling plant with 75 staff expected to lose their jobs.

The news follows Winstone Pulp International’s decision to close its sawmill and pulp mills near Ruapehu with 230 staff affected.

Wholesale power prices had skyrocketed due to low lake levels and constrained gas supply. However, the hydro lakes have recently refilled to above average at this time of the year after heavy rain and snow melt leading to spot market electricity prices falling since August.

Oji chief executive Jon Ryder said it was a particularly sad day for OjiFS and the employees at the Penrose Mill.

“While this closure will impact directly on our 75 people at the mill, we will continue serving our customers with as little disruption as possible,” Ryder said.

Oji has said high electricity prices were not the only factor contributing to its elevated operating costs and financial squeeze.

Other costs, including labour and freight, have played a part, it said.

“Our Penrose mill has suffered a three-year pattern of losses, with no prospect of the situation improving,” Ryder said.

“We have looked at technology and other changes to save input costs. We have also considered options presented by our staff and their unions.”

“At the end of the day, however, there is nothing we could find that would make a difference.”

Closing Penrose Mill will reduce the company’s capacity to produce recycled paper.

It will also increase cleaned wastepaper sent offshore to its Malaysian Mill, which will now supply the packing operations across Australasia.

OjiFS said it will not change its Fullcircle operations and will remain the largest paper recycler in New Zealand.

Ryder said that the company is doing everything it can to support staff at this time, “including matching them with positions across other parts of OjiFS and working with other businesses to offer them the opportunity to take on high-calibre, experienced staff.”

E tū union spokesperson Joe Gallagher told RNZ’s Morning Report before the announcement that alongside the known issues, a lack of past capital investment contributed.

According to Gallagher, $50 million in capital upgrades were needed for the mill to remain open, but the mill leadership ruled that out as an option.

“We’ve got to support these workers and it’s a pretty tough time, leading up to Christmas, to lose your job,” Gallagher said.