Forestry and wood processing company, Juken New Zealand has today confirmed it is going ahead with changes to the products made at its East Coast Mill in Gisborne to return the plant to profitability and secure its long-term future.

The company told staff on January 23 that is was considering stopping production of Plywood and Laminated Veneer Lumber (LVL) products and reducing the manufacture of Structural Laminated Veneer Lumber (SLVL) at its East Coast Mill because those parts of the business had been operating at significant losses for a number of years. The Mill will continue to make high-value solid wood products used for high-end residential and commercial interior cabinetry, furniture, solid doors and feature walls and, overtime, this side of the business will expand.

Juken General Manager, Dave Hilliard said that the final number of roles to go at the Mill as a result of the changes wouldn’t be known for another two weeks. “Now that we have made the decision to go ahead with these changes, we will be working through a process to confirm exactly which roles and how many will go as result,” said Hilliard.

“This is a tough time for our people and their families. We’re a major wood-processing and forestry employer in Gisborne so a decision like this that cuts local jobs is difficult. But for local companies like us, it’s even more critical for the future of our communities that we consolidate into a sustainable business. We can only do this by making high-value products where we have a competitive advantage, so that we can keep growing job opportunities here into the future.”

“There are around 100 roles impacted by the changes, but we anticipate that the final number of redundancies will be less than this, as a number of staff have applied to take voluntary severance and we also have some roles in our sawmilling side of the business that we’ll look to redeploy people into.”

“All staff have redundancy pay provisions in their contracts. Part of the extra assistance we’ll be putting in place is to give a minimum of six weeks pay and four weeks notice for those who have been here for less than a year.”

The company has spent the past two weeks consulting staff and Unions about the changes, which follow a decline in demand from Japan, the mills’ main Plywood market. The company’s Plywood is also increasingly unable to compete in the domestic and international markets against product out of large-scale wood processing plants from the likes of China and South America.

Dave Hilliard said the consultation sought alternative proposals to mothballing the Plywood production line and reducing the production of SLVL (veneer) products.

“We’ve carefully considered the feedback received, including a suggestion to start producing plywood for affordable housing in New Zealand. However, given the age of the machinery and the investment required to upgrade it to produce different plywood products these proposals don’t give us a viable solution to the issues we’re facing. The proposal asked for the decision to be delayed. However, we can’t continue sustaining these losses. Delaying the decision does not change the fact that the machinery cannot economically make product suitable for the low-cost housing market.”

“We have started work onsite with staff, unions, WINZ, Ministry for Social Development, local MPs, iwi, community and business representatives to support our people through this difficult process and to make sure they are supported into new jobs or re-training if their roles go. We are also working with a number of local employers, including Far East Sawmills who have come forward to offer our people new jobs.”

We’d like to thank them all for their hard work and support. We are also engaging with the Government on how we are investing to get the most value for the local industry out of our forestry resource through the manufacture of high-value products and how we are adapting to keep local processing and manufacturing competitive in the international market place.

The Juken mill at Matawhero opened in 1994 and employs around 200 full time employees. The mill processes Radiata Pine from the company’s East Coast forests to produce a range of solid wood and engineered wood products like Plywood, LVL (Laminated Veneer Lumber) and SLVL (Structural Laminated Veneer lumber), mainly for the Japanese housing market. ENDS

The media contact for Juken is Trish Sherson on 021 570 803 or e-mail trish@shersonwillis.com.