KEY POINTS:
Things are looking brighter for the staff at Bright Wood sawmill in Otautau after the American owners decided to keep the mill open while they look for a buyer.
The owner has withdrawn the redundancy notices it issued to 99 staff on January 30. The mill closure was seen as a death knell for the Southland town of 750 people.
But the company has now said the mill will stay open on one shift instead of four with the loss of 50 jobs.
"We're confident that there will be buyers and it is so important for the community that this mill stay open," Southland District mayor Frana Cardno told Radio New Zealand today.
She was hopeful that the mill could return to full production under new ownership as it had modern equipment.
"It is in excellent running condition," she said. "At least now we know that the mill will stay open and the mill has a future and that there will be more jobs there in the future".
Venture Southland was looking at the business, she said.
Bright Wood president Kevin Stovall said in a statement the company had been talking to interested parties and felt a continuation of operations, albeit on a reduced scale, was the best way forward.
A thorough due diligence and negotiation process with those potential buyers could take several months. He did not mention who the parties were or where they came from.
New Zealand's richest man Graeme Hart recently bought TDC Sawmill's huge mill in Whangarei to add to the mills he got when he bought Carter Holt Harvey for $3.3 billion. He is also currently buying sawmilling assets of Lakesawn Lumber in Taupo. He has so far purchased mills making structural timber in the North Island.
Bright Wood focuses on producing housing materials for the American market and its business has been affected by the high New Zealand dollar.
A unnamed respondent to a BNZ survey of business confidence this week summarised sentiment in the timber processing industry when he said "the high New Zealand dollar is killing the industry and seriously affecting other exporting industries in this country".
Another said sawmilling was "almost impossible."
"It's dog eat dog now," said mill worker Peter Davidson in the Southland Times in reaction to news that mill workers had to apply for fewer jobs at the mill.
He said he had another job lined up in Invercargill.
Others celebrated the news at the local pub, the Railway Hotel.
- NZPA
