Up to 230 jobs to go at Tokoroa’s Kinleith Mill

Wednesday, 20 November 2024

Despondent workers have filed out of Kinleith mill after hearing that up to 230 jobs are likely to be cut at the Tokoroa mill as its parent company faces “extreme financial headwinds”.

A consultation meeting with chief executive Jon Ryder on Wednesday revealed the number of jobs that could be cut by June 2025.

Some workers had only heard of the proposed job losses the night before through Waikato Times, which left them frustrated that management hadn’t told them.

Most people were going home to process the news. One man was off to the golf course to hit some balls.

Oji Fibre Solutions chief executive Jon Ryder said the company would simplify operations at the mill by focusing on pulp and discontinuing loss-making paper production.

Its plan was to permanently shut the Kinleith PM6 paper machine and move to a paper import model for its packaging operations.

“Manufacturing paper has become unprofitable. Paper production at Kinleith Mill has suffered significant losses for several years and we see no prospect of the situation improving.”

Paper production would continue to the end of June 2025 to meet customer obligations.

“Under this proposal, there would be no change to the wastepaper collection service provided by OjiFS Fullcircle, which will continue to collect, sort and bale wastepaper throughout New Zealand for recycling.”

“This is a difficult change to propose because of the impact on our hard-working team. We acknowledge the history and importance of Kinleith Mill in the local community and region and have made every effort to ensure we continue operating at the site.

“Our need for change is in no way a reflection of the experience, skills, and dedication of all the team and leadership at Kinleith Mill.”

A decision on jobs would be made by the end of January 2025.

Are you affected? Do you know more? Email news@waikatotimes.co.nz

Workers were briefed on the changes at an 8am meeting.

The development comes only weeks after Oji Fibre Solutions announced the closure of its smaller Penrose recycling plant with the loss of 75 jobs. Winstone Pulp International closed two central North Island mills in September leaving hundreds out of work after being hit by high electricity prices.

Impact huge, says mayor

Speaking prior to confirmation of the paper plant shutdown proposal, South Waikato mayor Gary Petley said the news would have a “huge” impact for Tokoroa and South Waikato.

He had worked at the mill for 21 years, and two of his sons are currently working on the procurement side of the business, and their jobs may also be on the line.

“They’re getting a bit nervous as to what that means to them. They may dodge the bullet, they may not.”

Petley said the impact would be felt throughout South Waikato instead of just Tokoroa, as there are workers who live in Putaruru and Tirau.

“We’ve taken one step forward with the dairy factory and then we’ve taken two steps back [if the job cuts go through].”

His message for families who could be affected by the cuts was to take the time to think about the future.

“Take time to consider what it means for them without rushing into it. It’s quite personal for me because I’ve experienced that and I’ve worked out there, I know all those guys on a personal level.”

Union blames company

The workers are members of E tū, FIRST Union, and AWUNZ.

Union delegate Ian Farall said the proposal demonstrates the failures of the company.

“I think it’s been a long time in the making, but the company has known it was going to get to this point, and have mismanaged the whole process.”

“We’re all very disappointed by their inability to turn it around. They can’t control what the market does, but they could have been much better prepared for this point in the cycle.

“There have been many problems at the mill, they have not kept up with maintenance, and they have not made the right investments to secure a future for paper production.”

Farall says all members are feeling let down.

“There were a lot of angry people in the meeting this morning. People were speaking from the heart, about how disappointed they are. Union members had a near-unanimous vote of no-confidence in the management, to show how frustrated we are. Many chose to simply walk out.

“It’s not just the directly impacted workers who are angry. We’re in unity here, and we know the downstream effects will harm the whole community. It’s the truck drivers, the local cafes and other businesses – many people locally rely on the mill as the heartbeat of South Waikato.”

E tū negotiation specialist Joe Gallagher also blamed the company and called on the Government to support domestic manufacturing.

“The crisis in manufacturing is not simply about unstoppable global market forces. It’s the result of an ineffective energy market, a lack of planning for a just transition, and a Government asleep at the wheel.

“We will not become a high-skill, high-wage economy while our political leadership continues with such a hands-off approach to our industries. Kinleith is not the first plant to be in this position recently and it may not be the last.

“Now’s the time for both businesses and the Government to get real about the crisis before us and work to reverse it. That’s the leadership communities like Tokoroa deserve.”

The mill that built a town

The Kinleith pulp and paper mill opened in the early 1950s, processing logs from the surrounding pine plantations on land unsuitable for farming into pulp and paper. The mill mainly produces packaging today.

At its peak during the 1980s under NZ Forest Products management the mill employed thousands of workers in well paid jobs and pushed the population of nearby Tokoroa, which was created to house workers, close to city status with 18,000 inhabitants.

However, NZFP was bought by Carter Holt Harvey in 1991 and became half foreign owned in 1995.

There were large strikes and industrial disputes through the decade at the mill as workers battled subsequent owners over conditions.

The workforce steadily declined through a series of restructures and the contracting of out of maintenance functions to leave roughly 400 workers.

Tokoroa's population in turn declined to 14,650, although the arrival of a number of new dairy factories in the South Waikato picked up some workers, but never to the same extent as the steam-belching mill south of the town.

In 2014 the Kinleith, Tasman and Penrose paper mills were sold to Japanese company Oji Fibre Solutions, one of the largest paper manufacturers in the world.

Oji Fibre Solutions announced in September the closure of its recycling mill in Auckland’s Penrose with the loss of 75 jobs after running at a loss for the past three years.

When announcing the closure of its Penrose plant in September, Ryder said the shuttering wouldn’t affect the company’s other operations.

“Closing Penrose Mill will not change our Fullcircle operations. We will continue to collect wastepaper and continue to recycle around 90,000 tonnes of cardboard per year at our Kinleith Mill, near Tokoroa.”