Around 230 Kinleith mill workers will lose their jobs after its owners today confirmed a proposal to cut paper production operations.
The Tokoroa mill’s owners, Oji Fibre Solutions, told staff in November that they were proposing to cease paper production by June, moving to a focus on pulp.
Staff were called into a meeting with management this morning to hear the decision.
It follows months of consultation, with unions working to save as many jobs as it could.
In a statement this morning, Oji CEO Dr Jon Ryder said that after “extensive work” and considerations on a variety of feedback from employees and unions, “we see no feasible alternative to our proposal to simplify operations, which will keep Kinleith Mill, operating, maintain jobs in the region and continue reliable supply of product to our customers”.
He said the decision would result in the loss of around 230 jobs.
“We will now work with our people on a new mill structure and processes, and the outcome of that work will define role requirements moving forward.
“We know for many of our people and the local and regional community, this is not the news anyone was hoping to hear.
“We recognise the impact on our people and their loved ones and will be wrapping support around them.”
Ryder said today’s “difficult” decision was “in no way a reflection of the experience, skills and dedication of all the team and leadership at Kinleith Mill”.
The company will now focus on its transition plan to close the paper machine safely, ensure the welfare of affected staff, and continue sustainable pulp operations at the mill.
“We look forward to working closely with the Government as we move through this period and into the future,” Ryder said.
Oji planned to continue paper production through to the end of June.
In November, when the proposal was first put foward, Ryder said the company’s decision was driven by paper production becoming “unprofitable”.
“Paper production at Kinleith Mill has suffered significant losses for several years, and we see no prospect of the situation improving,” he said at the time.
Ryder said today’s decision would:
- Keep the mill operating and reduce the complexity involved in running the mill
- Maintain continuous supply to pulp customers
- Introduce a new supply model for packaging operations
- Create projected profit rather than ongoing losses for the mill
- Reduce energy footprint and exposure to the NZ energy market
- Avoid exposure to expensive saw log fibre supply
South Waikato Mayor Gary Petley said today the district council would “proactively support” people who have been made redundant and help contractors to find new work through a programme called “Project Phoenix”.
“It is disappointing the paper production line is closing and we sympathise with those who have lost jobs and contracts. Through Project Phoenix the Council is collaborating with Kinleith owner Oji, Government, Ministry of Social Development, community organisations and educational and training institutes and businesses operating in South Waikato to help employees and contractors transition to new employment.”
The mill’s downsize is just the latest in a string of other closures across New Zealand.
In September, Oji confirmed its paper recycling mill in Auckland’s Penrose would close in December, leaving 75 people jobless.
That announcement came after Winstone Pulp confirmed its plans to shutter the Tangiwai Sawmill and Karioi Pulpmill in Ruapehu, resulting in the loss of 230 jobs.
Company ‘never seemed serious’ about saving paper production – union
E tū, one of the unions representing employees at the plant, said members were “devastated” by the closure of paper production.
Senior delegate Ian Farrell said, “The writing has been on the wall for some time” and believed the decision had been made “long ago”.
“The company never seemed serious about saving paper production,” he said.
“They have neglected essential maintenance that could have put us in a much stronger position. Of course, high power prices play a role, but the company should have been far better prepared for this.”
Senior FIRST Union delegate at the mill, Mario van der Putten, said staff were “bitterly disappointed” by Oji’s decision.
“We were the last ones standing – the last paper-making machine in the country,” he said.
“This puts our economy at risk and will have a ripple effect on primary industries that rely on our products for the safe, long-term storage of goods.
“We don’t believe the company has put forward a genuine business plan. Instead, they have reduced us to a business case. The writing was on the wall after two decades of underinvestment in the mill.
“This could end up being a disastrous decision that sinks the entire business. Specialist skills that take decades to master will be lost in the process.”
