Juken New Zealand has started talking to staff over likely job losses as it plans to spend millions of dollars upgrading its Triboard mill in Kaitaia.
The local unit of Japan’s WoodOne Ltd plans to upgrade the 30-year old mill to return it to profit and address safety concerns in a “multi-million dollar investment”, it said in a statement. The upgrade will see parts of the mill shut and a new operating structure introduced to “streamline production”. The company will meet its 250 Northland staff today to talk to them about the proposal in a two-week consultation period before final decisions are made on the future structure.
“This investment will result in a modern, safer and more efficient mill which can continue to be one of Kaitaia’s largest employers well into the future,” Juken NZ general manager Dave Hilliard said. “We are being upfront though that the steps required to be taken to address the mill’s issues are unfortunately likely to result in some job losses.”
The likely downsizing follows similar moves at Juken’s wood-processing operations in Gisborne earlier this year, when it halved the workforce at the Matawhero site to 100, halting plywood and laminated veneer lumber at the mill and scaling back and SLVL (veneer) production. Those efforts were also an attempt to return to profit.
Juken NZ reported a loss of $31.7 million in the year ended March 31, compared to a profit of $31.1 million a year earlier. That included $75.6 million of impairment charges on plant, equipment and buildings, which were valued at just $47.6 million as at March 31, including $7.7 million of investment in the period. At an operating level, gross profit fell 10 percent to $38.4 million on a 0.5 percent increase in revenue to $221.6 million
Hilliard today said the Kaitaia mill’s machinery and technology is old and created health and safety issues that needed addressing urgently. Constrained log supply compounded those issues, leaving the mill making a “substantial loss.”
The company is in talks with the government about how to deal with the log shortage and Hilliard acknowledged Forestry Minister Shane Jones “who is actively working with us to help resolve the supply shortage and is a strong advocate for the forestry sector.”