Whakatane Mill workers distraught as fight continues for its salvation

Thursday, 25 February 2021

Whakatāne Mill could switch to supply the local market with the right support, the town's economic agency says.

Pressure is being put on the Government to step up plans to transform the wood processing industry and keep Whakatāne Mill operating.

Local economic development agency Toi EDA said the mill, which has announced it is no longer economic, might be saved it if it switches from exporting to supplying local recyclable packaging.

Whittaker's is trialling compostable packaging.

Toi EDA chairman John Galbraith said he was confident that the mill could be repositioned with the right support.

New Zealand mills were struggling against competitors which were in many cases state-subsidised, he said

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‘’This is despite New Zealand’s competitive advantage of having one of the world’s largest sustainable plantation forests and renewable energy.’’

At the site this week, more than 200 workers were in shock over this week's news that the 80-year old mill might close.

Raymond Wheeler, a spokesman for E tū Union, said emotions on the site were running high.

Some people were angry, others who were older were more philosophical and would walk away with a good redundancy and pension.

‘’The younger ones, some have bought houses, assets and cars, and they're starting their careers and within the area there's not a lot of opportunity to get work with their skill set, and they are highly trained and skilled.’’

But it was Whakatāne's wider economy, including many contractors, scaffolders and local retailers, which would suffer, Wheeler said.

The town had already been hit by the 2019 eruption of Whakaari/White Island, and then the absence of tourists due to Covid. Losing the mill as well would be ‘’quite far reaching.'’

Norske Skog’s Tasman newsprint mill at Kawerau, one of several wood processors in the wider Bay of Plenty region.

Wheeler said that if the mill was to be saved, it would have to happen quickly.

The Government had tried behind the scenes to help the mill find a new owner, but the age of its plant was ‘’a hindrance,’' and the area had high energy costs.

A decision by the mill's Swiss parent company and key customer to switch to a cheaper supplier had been the final straw.

An industry plan to transform the wood industry had been in the works with Government officials for some time. ‘’They are identifying issues, but it’s the competitiveness,'' Wheeler said.

“We need to see increased support for manufacturing in the regions, particularly in the form of government procurement for local wood products.’’

There was also concern for other mills in the area. Newsprint maker Norske Skog in nearby Kawerau is also under review.

Galbraith said the Whakatāne mill was an important part of the value chain in the region, ‘’where many of the mills and wood processors provide raw materials and share overheads’'.

‘’Removing the Whakatāne Board Mill from the matrix will likely reduce the efficiency of the other mills in the region, which is a significant concern, and create further head winds.’’

Some progress has been made on the wood industry’s transformation plan. The first stage of the Wood Fibre Futures project has identified three key wood-based alternatives to high carbon products like fossil fuel, concrete, steel and coal.

Now the project is working on building business cases to attract international investors to the products: biocrude oil, liquid biofuels and solid fuels like wood pellets.

While packaging was not one items on Wood Fibre Future's agenda, Toi EDA's general manager of strategy Karl Gradon said the Eastern Bay of Plenty offered huge opportunity to replace plastic packaging.

“Kawerau has one of the world’s largest plantation forests literally on its doorstep, with the land owned by Māori entities,’' he said in December.

‘’It has an affordable and green geothermal energy resource under its feet and it has a rail link and a container terminal being built right now. We are perfectly placed to take advantage of these natural and man-made assets and keep the region humming.’’