Jones steps in for Gisborne mill workers
MINISTER OF FORESTRY, SHANE JONES, HAS ASKED JUKEN NEW Zealand to tell him what the government can do to help save any or all of the 100 jobs that are under threat at its Gisborne mill.
Mr Jones has described the news that JNL is considering halving its 205 workforce at the wood processing plant to make it more viable as a bitter blow to the community.
He says he understands the situation is a commercial decision but has asked for a proposal from the company.
“It’s a trying time for the families involved and until we have more information on JNL, I have no idea exactly what they would like the Government to do.”
Juken New Zealand announced late last month that it was consulting employees at the mill about potential changes to the products made there in order to return the plant to profitability and secure its long-term future.
The Matawhero mill opened in 1994 and processes Radiata Pine from the company’s East Coast forests to produce a range of solid wood and engineered wood products like plywood, LVL (Laminated Veneer Lumber) and SLVL (veneer), mainly for the Japanese housing market.
At the same time, the company is also making changes to its Wairarapa mill, increasing production of its ‘J-frame’ framing for the New Zealand housing and construction market and decreasing the specialist products made for the Japanese building market. These changes won’t result in job losses for any of JNL’s 222 permanent staff in Wairarapa.
General Manager of JNL, Dave Hilliard, says a significant drop in demand from Juken’s main export market in Japan for plywood and structural LVL building products in the past few years has seen these parts of the business operating at a loss.
“The Japanese housing market has been in decline and future demand for these products is not expected to improve because of the ageing population in Japan,” he says
Mr Hilliard says the company’s plywood is also increasingly unable to compete in the domestic and international markets against product out of large-scale wood processing plants from the likes of China and South America.
“All of our people have worked hard over the last five years to stay competitive, including increasing our New Zealand and Australian sales to reduce our reliance on the Japanese market, invested in a form-ply plant, reduced costs and hours of operation,” he adds
In spite of these efforts, the mill’s current plywood and LVL production capability and product mix doesn’t match the volume and price required by customers – which has led to increasing losses from ply and LVL production.
Mr Hilliard says significant investment would be required to increase to a scale to compete internationally and there’s not the log or manufacturing volume of appropriate quality and price to justify that investment.
The JNL plan is to retain high-value wood processing jobs and investment in Gisborne and Wairarapa by refocusing on value-add products where there’s strong customer demand and the company has a competitive advantage, including its premium sawn clearwood products.
Mr Hilliard says: “One of Juken’s advantages is that we process timber from our own forests on the East Coast and the Wairarapa. We’re one of the few forestry companies in New Zealand who grow and process our own timber.
“In Gisborne, we’ve invested to move from unpruned logs suited to plywood and SLVL (veneer) products to a greater proportion of pruned logs suited to higher value clearwood products used for high-end residential and commercial interior cabinetry, furniture, solid doors and feature walls.
“We’ve also increased our investment in kilns for the Gisborne and Wairarapa mills so we can increase production from the sawline producing these clearwood products.
“We’re refocusing on producing high-quality solid wood products from both mills.
“The solid wood saw milling and finishing lines in Gisborne would remain with increased investment over time to allow the mill to process all of Juken’s unique pruned logs from its forests.”
“This investment will likely initially be in log handling and sawmilling but could expand to include production processes that use the sawmilled lumber products.”
He says if the decision is made to go ahead with the changes in Gisborne the mill will stop producing plywood and LVL products and reduce the manufacture of SLVL (veneer).
Mr Hilliard adds: “The proposed changes in Gisborne, if implemented, will be difficult for our people. We’ll be working with Government agencies and Gisborne iwi, civic, community and business leaders, over alternative employment opportunities for our people should the changes go ahead.”
The consultation period in Gisborne was expected to run for two weeks and be completed in early February. After that it will consider feedback on the proposed changes before making any final decisions on the future structure and output of the mill.
The proposed changes will have no impact on Juken’s forestry operations.
NZL