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Jobs axed as demand drops

BECKIE WILSON

[email protected]

A slump in international sales has forced a leading Wairarapa forestry and wood processing company to look at slashing staff at one of its factories, and cutting back on locally-based contractors.

Juken NZ Ltd (JNL) announced yesterday that it was considering ending LVL [laminated veneer lumber] and plywood production at its Gisborne-based Matawhero mill, with a possible loss of 97 jobs from its 205-strong workforce.

And while the Japanese-owned company said its 222 permanent staff at the Waingawa mill would keep their jobs, 28 of its 100 Wairarapa contractors would be let go.

The cuts come after a drop in Japanese demand for the company’s plywood and structural LVL building products over the past few years.

JNL announced the news to staff and union representatives yesterday, saying changes were needed to return the plants to profitability and secure the company’s long-term future.

This included increasing production at Waingawa of its ‘J-frames’, an LVL product used in New Zealand residential and commercial construction, and scaling down the specialist products for the Japanese building market.

JNL general manager Dave Hilliard said the drop in demand meant parts of the company’s processing business had been operating at a loss.

“The Japanese housing market has been in decline and future demand for these products is not expected to improve because of the ageing population in Japan.

“Significant investment would be required to increase to a scale to compete internationally.

“At this time, there’s just not the log or manufacturing volume of appropriate quality and price to justify that investment.

“The changes presented to staff yesterday would see the mills return to profitability to keep high-value wood processing jobs and investment in Gisborne and Wairarapa.”

Mr Hilliard said the proposed changes would have no impact on the company’s forestry operations.

E Tu union’s Wellington organiser Mark James said that the 28 local contractors no longer needed had been employed through a labour hire company, and would lose their contracts in one month.

The 30-permanent staff working in the same area would keep their jobs and hours but may have different roles within the mill.

“We are relieved for the permanent staff but we feel sorry for the contracted staff.

“There are families out there that will hope that the labour hire company can get them more work. It’s very disappointing.”

Carterton Mayor John Booth said there would no doubt be a significant impact on the contractors and their families until new employment was found for them.

Juken was one of the biggest employers in the Carterton, but employees would not just be from the district, he said.

“It’s really disappointing to hear of the job losses, but I’m relieved to hear that the permanent staff keep their jobs.”

He had hoped that in the near future, with the large quantity of wood coming out of the region, some of it could be processed in the region which would create more jobs.

JNL was established as a subsidiary of WoodOne by its founder, Toshio Nakamoto, in 1990.

It has more than 30,000 hectares of forests in the East Coast and Wairarapa, and employs about 1000 people across its forestry and processing businesses in New Zealand.

A final decision on the future of the Gisborne plant will be made after a two-week consultation period.

 

 

 

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