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Bay of Plenty Region
Wednesday, August 4, 2021
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Norse Skog Kawerau Mill closure update

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Norske Skog’s recent announcement that it would be selling the Tasman Mill’s assets and stopping production by the end of the month didn’t come as a surprise to the workers at the mill, or even most of the people around Kawerau, a town in the eastern Bay of Plenty with a population of about 7500.

The closure follows a strategic review that began at the mill last September 2020. Norske Skog regional president Eric Luck said the company would work with employees and their union representatives on the implementation plan for the closure of the mill, with the aim of making the process as smooth as possible.

However, the announcement that Norske Skog will close is devastating for the families involved and for the wider regional wood processing sector.

But the recent focus on diversifying the region’s economy away from reliance on forestry has been validated by the news, according to Toi EDA.

Toi EDA sees great opportunities to reposition the workers due to the surge in economic confidence in the region.

The Eastern BOP is one of the few regions in the country to have rebounded strongly to pre-Covid-19 employment levels and continues to grow based on several catalytic sectors that are receiving significant investments.

Demand for work is still strong

Ian Morton, Toi EDA co general manager, says that “with the community-minded Sequal Lumber Mill taking on an extra shift in Kawerau, the booming boat building sector recruiting heavily, record planting in the high value horticulture sector, and Whakatohea Mussels taking on almost 100 new roles, the demand for work ready employees is strong.

Three years ago we recognised the need to change our economy to be more diverse and thankfully these opportunities exist today as a result.”

The construction of the Kawerau Putauaki Industrial Development, leveraging the clean geothermal energy found in the town, has already begun to attract investment in the town, such as the Waiu Dairy Factory.

The construction of the new roundabout to service the new industrial complex is well underway and the town is well set up to leverage the heavy industrial engineering expertise located in Kawerau.

Mill workers wanting to start their own businesses are encouraged to tap into support resources that the EBOP Chamber of Commerce has on offer, with a business advisory role that regularly visits Kawerau.

The local industry community group, Industrial Symbiosis Kawerau, will continue to support those businesses that work alongside the Norske Mill to ensure they are able to identify new opportunities.

Toi EDA co general manager, Karl Gradon, encourages central government to align wood processing policy that will reduce the incentives for log owners to export logs offshore in their raw form and instead find ways to add value locally.

The distortion in the world lumber market is extreme and, alongside our high energy costs, is causing the closure of our domestic processing capacity.

If these distortions continues then the domestic wood processing sector will continue to be challenged and further closures will be on the horizon.

Read more: Whakatane Mill saved, but caution expressed

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