210 jobs on the line: Whakatane Mill could close

Tonight, more than 200 Whakatane Mill employees have submitted a proposal to close the factory.

General manager Juha Verajankorva said in a statement that, in the face of the loss of its largest customer, the plant was no longer economically viable.

“We have begun consulting with staff on a proposal to liquidate the business and close the plant,” he said.

The factory employs just over 210 people and has produced paper and packaging products, lately mainly for export, for more than 80 years.

Under the proposal, all plant personnel would be laid off, the plant would be dismantled and the site would be rehabilitated.

Whakatane Mayor Judy Turner told the Rotorua Daily Post that the news was a “huge shock” and she was saddened to hear it.

He said the factory was the largest private employer in the district and was “very important” to the city.

“It has been a centuries-old job opportunity for young people and well, for everyone intergenerationally.”

He said his thoughts were with the employees and contractors whose jobs were at stake.

“We will ask questions in the morning and in the next few days.”

The loss of a major employer is the latest in a series of blows to the eastern Bay of Plenty city of some 37,500 people, which has seen its tourism sector hit hard first by the Whakaari eruption and then by Covid border closures. -19.

Verajankorva said the steel mill business has been in a challenging position for several years and had been exploring options to remain viable, including finding a new owner, but no other option offered a path to continue operations.

He said the factory has had trouble producing Liquid Paper Board for its parent company, SIG Combibloc, at a competitive cost. Despite this, SIG had continued to invest in the company for some time and had become its main customer, accounting for approximately 80 percent of its production.

Recently, however, SIG had decided to source the liquid paper board provided by Whakatane Mill from its existing third-party suppliers, meaning that the factory’s operation was no longer viable, he said. The business case for further investment in the mill by SIG was not an economic one.

“We continue to explore all options with our Deloitte advisers, including finding a buyer for the business, but we are in a position where we need to present this proposal to staff as we are reaching a point where we may not there is another option. ” said Mr. Verajankorva.

“The volumes we produce are modest by global standards and our unit costs can no longer compete with larger plants abroad,” he added.

The company’s focus in the coming weeks will be working with staff through the consultation process.

“This is a difficult proposition to present, given the part of the Bay of Plenty community that this company has become. If the closure proceeds, we will do everything we can to support our people and all of our shareholders,” he said.

After considering staff feedback and all information emerging from the consultation process, the company’s decision would be shared with stakeholders and the market.