Job cuts loom at Kawerau mill

The Norske Skog Tasman pulp and paper mill in Bay of Plenty is planning "significant downtime" next year in the face of falling demand.

A statement from general manager Ernie Hacker referred to continuing market uncertainty for the Kawerau mill's newsprint product.

The company estimated it would have to cut back production by between 25,000 and 50,000 tonnes and a spokeswoman suggested that could involve two shutdowns of two weeks each.

The company is seeking 69 redundancies among its 399 workers, though a union plans to contest them.

The mill closed for 10 days in August because of over-production and falling demand.

"These are tough times requiring decisive action," said Hacker.

"We must balance New Zealand capacity with long-term local and regional demand."

He said the Tasman mill had made considerable improvements and investments in its operations in recent years, including machine rebuilds, new energy supply and increased productivity, and these had improved its competitive position.

However, the overall market situation was still difficult and required the shutdowns.

"It is best that we act now and make these arrangements known to our employees and other key stakeholders, rather than have to make sudden changes in the future."

Norske Skog Tasman manufactures newsprint for all of the New Zealand market, with the balance of production exported to Australia and Asia.

Harold Appleton, secretary of the pulp and paper section of the Manufacturing and Construction Workers' Union, said 30 of the 69 workers the company was looking at shedding were pulp and paper workers.

While the union intended to bargain in good faith, it had no intention of giving the company a helping hand to cut employee numbers, and would challenge the cuts on a case by case basis.

Some salaried staff employees were among the others facing redundancy.

Other Norske Skog paper mills in Australia had already cut jobs this year.

- NZPA