Devastation as two mills close, with hundreds of jobs on the line
Wednesday, 21 August 2024
Hundreds of jobs in Ruapehu District are on the chopping block as distressed families grapple with the shock and fear of lost incomes.
Ruapehu’s Winstone pulp and timber mills halted production earlier this month, as New Zealand’s electricity prices sky rocketed.
At the time, New Zealand’s wholesale electricity price was about 15 times more than the Australian average - with Deputy Prime Minister Winston Peters calling it an energy “crisis”.
After that temporary two-week shut down, Winstone chief executive Mike Ryan confirmed he planned to shut two mills “indefinitely”.
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Jude Sinai, a worker at Karioi Pulpmill, told TVNZ he was “devastated”.
“When the news first broke, I was looking across the room and there was actually a lot of shock and a lot of fear.
“You could see some stress and emotions playing over in each one of their minds.”
Staff at the Karioi Pulp Mill and Tangiwai Sawmill met on Tuesday and after the meeting told Stuff the outcome would be disastrous for the communities that relied on the mills.
The populations of nearby towns, Ohakune, Raetihi and Waiouru are small, and while 230 jobs were set to go at the mills, there would be many more impacts at other businesses as the mills provided work for contractors and logistics companies across Ruapehu.
Sinai was also a First Union delegate and told TVNZ he’d received a lot of phone calls from stressed families.
“A lot of distressed members, our partners that are crying, children that are upset – cause yeah, it has a huge impact on this community.”
While he told TVNZ he felt the closures were justified, the mills were the “backbone of the community” and the losses would be felt deeply.
“I think our company’s done everything it can possibly do to bring down their energy footprint,” he said.
“We know that this is an external factor that we have no control over. We’re a very tight-knit community and it’s just heartbreaking.”
Ruapehu Mayor Weston Kirton echoed the sentiment, saying the situation was devastating.
“We really feel for those families that potentially could lose their jobs,” he told TVNZ.
“It’s an energy crisis that is in the backbone of this and we just really want to bring it to the Government’s attention that they need to intervene and to protect our people, to protect our business and protect New Zealand's credibility in terms of exporting this pulp mill product.”
Ryan, alongside other forestry industry leaders, met with ministers at Parliament two weeks ago to discuss the cost of power.
He said at the time that it was a last-ditch effort to try to find a way to keep the mills open.
But on Tuesday, he confirmed to Stuff that he did not see any way to keep the mills operating.
“If confirmed, the proposal would see WPI cease operations indefinitely with the loss of 230 roles,” Ryan said.
There had been hope that the Government would come to the table with a rescue package for the power companies, most of which are partly publicly owned.
But no fix has arrived, and the jobs are set to go following a consultation period that is due to end on September 9.
Staff would be offered voluntary redundancy, and those who did not accept redundancy would remain on full pay during the consultation period.
Ryan said Winstone had hedged against electricity market volatility, but its contracts were up for renewal and the cost of replacing them was unaffordable.
‘’Realistically, no hedging policy or future efficiency improvements will offset the structural increase in energy costs.”
He said the price Winstone paid for electricity had risen 500% since September 2021.
The Raetihi community has arranged a meeting on Tuesday, August 27, at The Centre to discuss the situation.