By PAM GRAHAM
Wood-processing businesses employing 125 people in Tokoroa are earmarked for closure by owner Carter Holt Harvey.
The final decision will be taken once the workers are consulted. But that is not expected to find a solution to the loss of competitiveness in US markets because of the
high kiwi dollar.
"We don't see any indication of the cost of doing business in New Zealand reducing in the foreseeable future," says chief executive Peter Springford.
The closure of the Tokoroa sawmill and the kiln, finger-jointing and chop-sawing parts of the nearby remanufacturing plant comes as there is much talk about the need to process logs before they leave country.
Instead, processing businesses in Mt Maunganui, Wanganui and Waipawa have either closed or gone into receivership and others have laid off workers.
Carter Holt said the Tokoroa sawmill had been losing money for five years. A consultation with workers in 2001 improved efficiency but the 50-year-old mill produced for the US market and was vulnerable to the exchange rate.
Devon McLean, its chief operating officer for forests, said the New Zealand dollar had risen to a six-year high at the same time the Chilean peso had fallen, making exports from Chile to the US cheaper.
Australian and New Zealand markets for appearance grade timber were "incredibly competitive at the moment because everyone who has been knocked out of the US is fighting for space".
McLean said the company had invested in a new sawing system at Tokoroa three years ago and got some reasonable results but they were not enough.
Though the New Zealand and Australian building markets have been booming, the US and Japanese economies have struggled.
"We have to move with changing markets but all the other international suppliers are doing that too," McLean said.
Still, the company was considering taking on staff at its plywood mill in Tokoroa but the efficiency of some aspects of the operation needed to be improved.
