Value-added timber plant to close with loss of 110 jobs

By PAM GRAHAM

A timber remanufacturing plant at Mt Maunganui will close at the end of next month with the loss of 110 jobs.

Central North Island Forest Partnership receiver Michael Stiassny said yesterday that staff would receive redundancy packages.

"This is an unfortunate decision to have to make, but it is an economic necessity," he said. "The plant has been losing considerable sums of money for some time.

"We have carefully considered alternatives but these were not feasible."

The plant will close on September 30 when a management contract with Fletcher Challenge Forests runs out. Stiassny said Fletcher Forests had been offered the plant.

The plant, adjacent to the Port of Tauranga, was developed by the former Forestry Corporation in an early attempt to add value to forest exports.

It makes finger jointing and mouldings primarily for the North American market.

Documents from Fletcher Forests' failed bid to buy the CNIFP assets last year said the plant was "reasonably small but relatively efficient", and that capacity could rise to 33,000 million cubic metres a year if a four-shift system were run.

Fletcher Forests is trying to sell its forests to focus on processing and has been talking to an unnamed Danish furniture maker about a New Zealand venture.

The receiver started a new management company to take over running the huge CNIFP forest estate from July 1.

Timber Management Company chief Russell Dale said yesterday that the company's new systems, which had to be installed from scratch in short order, were working well.

The estate, one of the world's largest, has been for sale for two years. Harvard Management Company, which manages US$21 billion ($35.85 billion) of assets for Harvard University, last week declined to comment on speculation it had put in a low bid for the estate.

The company invests about US$1.2 billion globally in timberland and includes New Zealand on a list of countries that "make sense."