80 jobs axed at Ohakune sawmill

National Distribution Union general secretary Robert Reid. Photo / Simon Baker

Another 80 job losses announced today in a third sawmill unable to profitably export timber suggests the wood industry is in crisis, says a union representing workers in the sector.

"The wood processing industry is now at crisis point," said National Distribution Union general secretary Robert Reid.

"The price of raw logs is going up and up, but the price at which New Zealand can sell processed timber is going down," he said. "In effect, the closer a wood company is to a raw log, the more money they will make in exporting."

The latest job losses include 40 permanent production workers and 40 other temporary staff, management and contractors, at Winstone Pulp International (WPI) Tangiwai Mill, near Ohakune.

The number of staff employed at Tangiwai will drop from 165 to 85, including 40 management, contractors, and some temporary workers already scheduled to finish next Wednesday.

Voluntary redundancies will be sought until January 17, and additional lay-offs will be announced the following day.

On Tuesday WPI managing director David Anderson announced that the company's Prime Sawmill on the East Coast at Matawhero, near Gisborne will be mothballed on Christmas Eve. In October 2009 the company axed two thirds of its staff because of the global recession.

Mr Anderson blamed deteriorating market conditions and said the strengthening of exchange rates for the New Zealand dollar had forced the Gisborne mill to close, leaving most of its 30 workers without a job.

Also on Tuesday there were 26 job losses at Carter Holt Harvey Woodproducts Kawerau Sawmill.

Mr Reid said that aside from exchange rates, there was a structural problem in the industry.

"When value-added ends up being completely uneconomic, there is something wrong," he said.

He called for the Government to convene to an urgent meeting with industry, and unions.

Exports of forestry products last year made up 8.1 per cent of merchandise exports, valued at $3.25 billion . Forestry and logging makes up around 1.1 per cent of GDP with almost 70 per cent of wood from plantations being exported.

- NZPA