KEY POINTS:
One of the Thames district's largest employers - Carter Holt Harvey's Kopu timber mill - faces the chop with the loss of 145 jobs.
Mill staff and union officials called to a meeting yesterday afternoon were shocked to learn that the facility was likely to become a casualty
of an over-supply of timber products, and the chances of its survival were slim.
Carter Holt Harvey managers could not be reached for comment last night.
But Engineering, Printing and Manufacturing Union secretary Andrew Little said workers had been told there was probably little they could do to save it.
He said 145 jobs would be lost.
Although it was unclear whether both a sawmill and an adjoining particle-board mill were likely to close, an industry source said he believed that would be the case, because of the high degree of inter-dependence between the two.
The particle-board mill used sawdust from the main operation.
Mr Little said that yesterday marked the start of a formal consultation period due to last until April 23, before the company made a final decision on the issue five days later.
He said the workforce was particularly shocked at the development because of a previous indication that Carter Holt Harvey's owners, Graeme Hart and his Rank Group, were not planning any material changes to the company until they could find a buyer for it.
Union officials had been called to meetings at other Carter Holt Harvey mills - including Whangarei, Putaruru and Nelson - where it was believed the company intended reducing the number of work shifts, hopefully without laying off staff.
Today he told Radio New Zealand there was an awareness in the industry that the number of small mills around the country was an issue.
There needed to be greater consolidation, "a bit of scale", because smaller mills were more vulnerable to the vagaries of the economy, he said.
"The reality is that the industry has simply failed to come to grips with that and I think that Kopu may well be the first victim of an industry that simply won't deal with it's own problem."
Despite the consultation period which must take place, Mr Little said he believed it would be "a very hard struggle" to keep the mill open but that the union would have a good go.
Thames-Coromandel District Mayor Philippa Barriball said the closure would hammer her community of about 7500 people.
The town is reeling at the news, as locals believed the mill was doing well after a bad patch about a year ago.
"Recently that plant has increased production, they had a grand opening of a new kiln, shifts were increasing as I understand it, and there was a very positive and bright outlook for the mill," she told Radio New Zealand today.
A sizeable proportion of the town's workforce were employed at the mill, she said.
Ms Barriball said most workers who lost their jobs would be lost to the town as there were simply not the employment options in primary production.
"Sadly, they tend to be our volunteer firefighters, our ambulance drivers, our sports coaches. The community is going to miss out on a lot."
Timber Industry Federation executive director Wayne Coffey said the timber industry was suffering from the same stresses as other manufacturers.
"You've got a softening in the building industry going on, and a high dollar, softer market, high interest costs, high energy costs, huge transport costs, labour laws that are biting you every day, and all sorts of other compliance regimes.
"All the signals are `don't manufacture in New Zealand, don't even try'. "