Japanese-owned wood products company Juken is to upgrade its board mill in Kaitaia but also cut the workforce.
Juken says its Kaitaia mill is losing money. Photo: Supplied / Juken New Zealand Ltd
The company says it will invest millions in new technology to modernise and streamline production at the 30-year-old
mill over the next few years.
Juken's New Zealand manager Dave Hilliard said it would mean job losses among the 250 employed in the region, although
it's not known how many.
Juken cut about 100 jobs at its Gisborne plant
at the start of the year as it cut production because of slowdown in the Japanese housing market.
He said the mill was a money loser, with outdated machinery, and production is limited by uncertain supply.
"The mill's machinery and technology is old, despite investment in recent years the site presents health and safety
challenges that need to be urgently addressed, and the mill's production is severely constrained by inadequate and
uncertain log supply in Northland.
"Because of these issues, the mill is making a substantial loss."
Security of log supply in Northland was having an impact on all mills in the region and was not an issue JNL could fix
on its own, Mr Hilliard said.
"We are in early but constructive discussions with the government about the shortage and how it can be solved."
Juken will carry out a two-week consultation period with staff in Kaitaia.
The company has four wood processing mills and employs about 1000 people across its forestry and processing businesses
in New Zealand.