Photo: 123RF
Kinleith Mill plans to halt paper processing next year with 230 jobs on the line.
Workers were called to a meeting at the mill in Tokoroa on Wednesday morning.
The pulp and paper mill is owned by Oji Fibre Solutions, which in September announced it was closing its operation at Penrose, Auckland. Up to 75 workers were affected. Oji said that closure was partly due to high power prices.
Oji chief executive Jon Ryder said in a statement the company was proposing to simplify Kinleith Mill's operations by focusing on pulp and discontinuing lossmaking paper production.
"Therefore, we are consulting on a plan to permanently shut the Kinleith PM6 paper machine and move to a paper import model for our packaging operations.
"Manufacturing paper has become unprofitable. Paper production at Kinleith Mill has suffered significant losses for several years and we see no prospect of the situation improving," he said.
"Due to the complexities of operational changes required at the mill for this proposal, the exact number of potential job losses is unknown at this stage. However, we anticipate approximately 230 roles may be affected."
The mill will continue producing pulp.
The company said it would consult with employees and announce a decision by the end of January 2025.
E tū union is calling on the company to pause the consultation process until the new year, so it can bring in experts and put together a proposal to keep paper-making production in New Zealand.
Union negotiator Joe Gallagher, who was at the meeting, told Nine to Noon the union wanted to engage with local authorities and government, and look at accessing regional funding.
"Essentially the mill is the heart of the south Waikato, Tokoroa was born out of the mill being built and so this would be a massive blow for this economy if we can't keep this production going".
Along with the 230 jobs on the line, contractors would also be affected, he said.
He said the company told workers paper production was too expensive in New Zealand because of high power prices, the cost of logs and aging equipment at the plant.
Workers were upset and angry and didn't feel the company had listened to their ideas, Gallagher said.
In September Winstone Pulp International announced it would close its pulp mill at Karioi and its sawmill at Tangiwai with the loss of 230 jobs.
The mill was the main employer in the central North Island region, with most of its workers living in Raetihi, Ohakune and Waiouru. Locals feared Raetihi would turn into a ghost town with the effect from the mill closure on households.
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