Holiday phone call leaves dozens without jobs as South Waikato sawmill shuts down
Tuesday, 14 January 2020
Dozens of workers on holiday were called with news that their job at a South Waikato sawmill wouldn't be there when they got back.
Putaruru's Pacific Pine timber processing and sawmill in Domain Rd has closed and gone into receivership leaving almost all of its approximately 60 staff without jobs.
The closure is a major blow for the town of just under 4000, which has seen a number of mill closures over the years.
Receiver Kenneth Brown said staff at the sawmill, which supplies furniture and solid timber housing markets throughout the world, were called into a meeting on Monday after being informed last Thursday while still away on their Christmas breaks.
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'It is a difficult situation for everyone, we acknowledge that, but unfortunately the company has been losing money,' he said.
'The directors particularly but also the shareholders determined that it (the company) just wasn't in a position to continue going on making those losses and requested receivers to be appointed.
'It is never easy in these situations and it is even harder when we have to tell the vast majority of [staff] just by telephone because of course they were away on holiday.'
Brown said the company had been struggling to stay afloat for the last two years.
'Unfortunately I guess it is just the market and the returns they were getting,' he said.
'They had good products and had been trading for a long time. They had good customers and good suppliers.
'Some of the suppliers are somewhat surprised by it, they hadn't anticipated it because they have been very good payers. It wasn't one of those situations where they had been holding back payments for months on end, that is why it came as a bit of shock to staff and some of the suppliers.
He said attempts to save the business were in vain.
'They got through last year because one of the shareholders injected a large amount of cash in the hope it would steer things right,' he said.
'Really if he hadn't done that we would have been here this time last year.'
Brown said during the staff meeting workers were offered support and advice from the Ministry of Social Development (MSD) and other employment opportunities from various local businesses.
'There is also a business up the road who came to see us in the morning and dropped off some application forms for people and Kiwi Lumber have also indicated they may have some positions.
'I think a number of them will find placements reasonably quickly, we hope they do.'
'Some of them have been long term employees, some have been there for the best part of 30 years,' he said.
'Their wages are paid up to date and we are looking at their employee entitlements now, things like redundancy and holiday pay, and we have indicated we will get that paid as quickly as we can.'
Brown said while someone could potentially buy the business it was more likely the Pacific Pine buildings and land would be sold for a new venture.
This isn't the first set of job losses to hit the South Waikato area, which has seen a number of redundancies in recent years.
In 2008 the region took a hit when 212 jobs were lost when Carter Holt Harvey closed their Putaruru sawmill site.
Forestry Minister Shane Jones said in his time as the forestry minister he had witnessed the closure of a number of sawmilling operations.
Jones said he was incredibly disappointed to hear about the closure and he was acutely aware of how important these employers were.
'It's an awful way to start 2020.'
He said he would be following up this closure to see what lessons could be learned.
Work was started in 2019 on a report looking at the industry and Jones expected it to be completed within the first quarter of this year.
Taupō National MP Louise Upston said she was concerned about the people who were directly affected by the closure.
She had been in contact with Work and Income to make sure they were aware of the situation and could provide assistance.
'It's a tough time of year to be in this situation, so I really feel for the people involved.'
Upston said when Carter Holt Harvey closed their Putaruru mill it was a bigger company so they could redeploy some of their staff.
'This will be much tougher.
'It will be challenging for that many people to be re-employed in a small town.'
South Waikato Mayor Jenny Shattock echoed Upston.
'I have to accept the company has to do what it needs to do but unfortunately it is going to have a huge impact on lots and lots of people in Putaruru and their families,' she said.
'We are only a small district and future opportunities in the district are limited.
'The employees have got a set of skills so hopefully they can be transferable to something within the district but in smaller communities it is harder to get jobs.'
'It is a huge upheaval and it is going to be felt right across the community.'
Shattock said the trading environment in logs was becoming more difficult which could spark further concerns for the district.
'There is a lot of competition in the central North Island,' she said.
'We also know the pruned log supply is going to continue to decline over the next five years so I think pruned log sawmilling, which Pacific Pine was doing, will become even more challenging for other mills.