KEY POINTS:
The outlook for timber workers in Taupo just got a lot gloomier.
Fletcher Building has decided against rebuilding its Taupo Medium Density Fibreboard (MDF) plant destroyed by fire last year, despite receiving a net $81 million from insurers.
Given the predominant export nature of the plant, and the better cost competitiveness of alternative locations, it will not be rebuilt in Taupo, the company said in a statement today.
About 70 workers have already been made redundant from the plant. A particle board plant at the same site is still operating, employing around 35 workers.
Fletcher Building had two large insurance claims outstanding, one for the MDF plant and another for the failure of the transformer at Pacific Steel which disrupted production.
The company said it has accepted a cash settlement of its claim against the insurers of the MDF plant, the gross amount of which was $91 million. After deductions the net amount was $81 million.
The resolution of the transformer claim was advanced enough to make a reasonable estimate of the final outcome.
After plant write-offs, redundancies, and business interruption costs the company expects its operating earnings in the year to June 30 to be $14 million higher. Net earnings will be $24 million higher.
- NZPA
