Whakatāne Mill: Local mayors welcome mill expansion plan a year after mill slated to close

The Whakatāne paper mill was threatened with closure last year. Now its new owners have announced plans for expansion. Photo / NZME

News that a paper mill slated for closure a year ago is now planning a major expansion has been welcomed by two local mayors.

The Whakatāne Mill's new owners yesterday announced plans for an expansion that would increase operations by 40 per cent and create 300 jobs in the construction phase.

Whakatāne mayor Judy Turner said the expansion sounded "exciting".

"I'm delighted for the company and especially the employees and their whānau who will have the reassurance of job security for themselves and a future workforce."

Whakatāne mayor Judy Turner. Photo / NZME

Turner said the previous owners' intention to close the mill had worried the community.

In February last year, the mill - then owned by Swiss company SIG Combibloc - presented more than 200 employees with a closure proposal.

Turner said this "led to widespread concern that a business that had really been an economic backbone for decades was under threat".

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Turner said at the time the council supported the Eastern Bay of Plenty Economic Development Agency, the mill team and the Government to explore possible alternatives to shutting the mill down for good.

"The outcome was purchase by current owner PPL in May last year," Turner told the Rotorua Daily Post yesterday .

"It's wonderful that the new company has been able to pivot, secure markets and be in a position to announce the expansion."

Turner said the mill expansion was also great news for local contractors to the mill.

"It creates enormous employment opportunities during the build of new parts of the facility.

"This is positive news when so many of our local businesses are facing challenges that are outside of their control."

Turner said the Whakatāne community looked forward to seeing the effects of this expansion on the local and regional economy as it recovered from the impact of Covid-19.

"The new mill board has been very proactive in supporting local community with things like sports sponsorships."

Kawerau mayor Malcolm Campbell. Photo / File

Kawerau mayor Malcolm Campbell said the Whakatāne mill expansion would "certainly" make a difference for the people of Kawerau - where the major Norske Skog paper mill closed last year at a cost of 160 jobs.

"[The expansion is] great news for Kawerau and for the whole Eastern Bay," Campbell said.

"A lot of the mill workers already live in Kawerau. Whakatāne's our service centre."

Campbell said the commute between Kawerau and Whakatāne was not long and he thought potential mill employees would find the distance convenient.

According to a press release announcing the expansion, the mill's order books are full well into 2022.

Expansion costs will be funded by Whakatāne Mill Limited's internally generated cash and a loan from the Bank of New Zealand.

Executive chairman of Whakatāne Mill Limited, Ian Halliday. Photo / Supplied

Whakatāne Mill Limited executive chairman Ian Halliday said the expansion would be a "huge boost" for the local economy.

"The mill is already a significant employer and contributor to the Whakatāne and the Bay of Plenty region."

Halliday said the construction phase of the mill's expansion would employ more than 300 people.

"[We're] committed to creating growth for all relevant parties connected to the mill, including but not limited to, its people, its partners and the region as a whole.

"We've made a concerted effort to source most of our raw materials locally, to further assist the region and the important role it plays within our community."

Asked how many jobs the expansion would generate after construction, Halliday said there were likely to be some changes in employment after the expansion.

"The main outcome will be future-proofing the business and the security of employment for all our staff.

"[We] cannot comment further on the future of its employment matters at this stage."

First Union organiser Phil Graham said the mill's closure and the loss of 220 jobs would have had a devastating effect on the small community.

"From where we were last year, from the mill being saved in the eleventh hour [to this]... it is great news.

"The new owners seem to have a plan. I hope it works out for them."