Workers heartbroken as closure of Ruapehu mills puts over 200 people out of a job

Tuesday, 10 September 2024

The workers of Ruapehu’s timber and pulp mills are heartbroken, with hundreds now weighing up whether they can stay in their community now they are out of work.

More than 200 jobs will go from Winstone’s pulp and timber mills, chief executive Mike Ryan confirmed on Tuesday. He said the high cost of power, and no certainty that prices would stay down, meant the mills were no longer a sustainable business.

As he confirmed the mills would close, Ryan had a warning for the rest of New Zealand. He said businesses like this, set up in the 80s when power was cheap, were all facing the same problem.

New Zealand’s high electricity prices, which were the highest in the developed world earlier this year, meant they were no longer internationally competitive.

Ruapeuhu District Mayor Weston Kirton said losing the mills was “a massive blow” for the entire region.

He said they were now dealing with “a very sad community”, but said everyone could come together to find a way forward. “We’ve got to pick ourselves up,” he said on Tuesday, after meeting the mill workers.

While 230 jobs would be lost with the mills’ closure, there would be many more impacts at other businesses. The mills provided work for contractors and logistics companies across Ruapehu.

Jude Sinai, a mill worker and union delegate, said there had been hope that a deal could be reached with the Government or power companies to keep the mills open.

“We were thinking oh, ‘has there been an olive branch given to the company?’ But no, the news today was they’re not going to go forward with production any more.”

“It’s really heartbreaking news.”

He said the teams were silent as Ryan “ripped off the band aid”.

“It’s almost like mourning a bit of a loss. I’ve been here a really long time. I’ve got great friends. It’s a great community. There is no real plan B,” Sinai said.

Other workers have said that, realistically, they would need to leave their homes and move somewhere like Australia to continue working in manufacturing.

Ryan said the price of power meant it had become impossible to stay in operation.

“This was not a decision taken lightly,” he said, in a statement.

He said the lower electricity price in September, which came about thanks to rain and wind, did not provide certainty for the business. The Government’s commitments to bring down the price of power through regulations changes would also not help.

“Nothing is going to materially change in the medium-term regarding wholesale market electricity pricing,” he said.

He warned other business were in a similar predicament.

“WPI was established over 45 years ago to use affordable hydroelectricity to add value to locally sourced low-grade logs and forest residuals,” he said.

“The current New Zealand cost base means that we are no longer internationally competitive. This is a problem that WPI shares with many other companies that form New Zealand’s industrial base.”

Prime Minister Christopher Luxon said he didn’t think it was the Government’s place to intervene in the business decision of a multi-national company.

“I don’t believe governments should be intervening, but what I’d say to you is: The Government has focused very, very hard on energy security.”

But Te Pāti Māori co-leader and local MP, Debbie Ngarewa Packer, said that wasn’t good enough.

“We’ve been pushing for them to intervene and to help our whānau. This is a huge catastrophe for our community there,” she said.

The Government earlier announced some changes to electricity policies, including a promise to make it easier to build power plants.