Carter Holt chopping numbers at Tokoroa mill

Carter Holt Harvey says it needs to cut staff numbers at its Tokoroa plymill because the plant is producing too much for the market.

The company is looking to cut about 55 jobs of the 240 currently employed at the site next to Kinleith Pulp and Paper Mill.

Consultation meetings with staff began yesterday and are set to continue over the next two weeks but the company's engineered wood products business manager John Thorburn said job losses were likely.

He said the company needed to reduce costs, balance demand and supply and make changes to its streamline operations.

"If we can achieve those things we'll certainly consider alternatives but when you have capacity outstripping demand it does leave you with limited choice," he told National Radio today.

"We currently believe that some reduction in roles is likely but we do have an open mind through the consultation process and will be working hard to look at alternatives."

Mr Thorburn said Carter Holt Harvey was "struggling to achieve an acceptable return" at the mill but he would not say what such a return was.

"We're currently running a cost structure which supports a much larger volume (of production) but market conditions have enabled us only to sell a smaller portion of that," he said.

"There will be some reduction in production if this proposal is adopted."

He said the company had an open mind about whether they would re-employ staff if market conditions picked up.

"We really need to make these changes now to give the mill the best chance of a strong future."

Any job losses would be implemented within a few weeks once the consultation period was finished on August 23, Mr Thorburn said.

Engineering, Printing and Manufacturing Union (EPMU) national secretary Andrew Little said Carter Holt Harvey needed to consider whether their current difficulties were just short-term.

"In the past they have reduced staff and within six months they have had to take people on again because they didn't have the numbers they needed to operate the plant.

"We want to make sure this isn't just the bottom of a cycle that could easily pick up again. It's extremely disrupting if they lay people off only to need them back again so soon."

The union would also look at whether there were other areas of production in which staff could be involved, he said.

Mr Little said the consultation process could bring some benefit to staff.

"On other occasions we have been able to prevent some layoffs, though it's too early to say whether that's going to happen this time. But I think staff are pretty resigned to having some redundancies."

- NZPA