Kaitāia’s Major Employers Face Uncertain Future
Kaitāia, a town in the Far North of New Zealand with a population of around 6,000 people, is facing a potential crisis as one of its largest employers, Juken New Zealand, considers shutting down its two timber mills. The closure could result in the loss of hundreds of jobs, raising concerns among residents and local leaders.
Juken New Zealand operates two mills in Kaitāia: one that produces sawn timber and another that makes Triboard, a product used in construction. These mills have been vital to the local economy, but high operational costs, particularly for power, have long posed challenges. Now, the Japanese-owned company has indicated it may be looking to exit the area, which has caused significant worry among the community.
Far North Mayor Moko Tepania expressed concern over the potential impact on employees, their families, and the broader Kaitāia community. His priority is to fully understand the situation and work alongside Juken as it explores options in a difficult economic climate.
Tepania emphasized the need for support from central government, stating that councils alone cannot advocate for this issue. He suggested that the government could consider ways to ease the burden of high power prices, which are among the highest in the country. Additionally, he mentioned the possibility of exploring funding through the government’s Regional Infrastructure Fund.
The government has not always intervened to save businesses, as seen in the case of the Marsden Point oil refinery. However, in other instances, such as the Tiwai Point aluminium smelter, the government has stepped in to keep operations running and preserve jobs. Tepania pointed out the devastating effects of mill closures on other rural areas like Kawerau and Ruapehu, highlighting the importance of keeping the Kaitāia mills operational.
The mills also play a crucial role in the town’s water supply, accounting for about 30 percent of Kaitāia’s usage. Tepania questioned whether the central government would assist with water charging if it could make the mills more attractive to potential buyers.
Juken NZ managing director Hisayuki Tsuboi stated that the company had begun consulting staff about the future of its Northland Mill and Triboard Mill. He cited structural and market pressures, including declining demand in key export markets and rising operating costs. Tsuboi noted that the company has been working for years to improve financial performance at its Kaitāia sites, including increasing production and exploring new markets.
As part of this effort, Juken is considering different structures for the mills, including a potential sale or joint venture. The company is currently testing the market to see if there is interest from potential buyers. Tsuboi emphasized the focus on finding a viable path to keep the mills open and preserve employment where possible.
Workers First Union, representing about 145 employees at the two mills, confirmed that both facilities are up for sale, with a tendering process set to run over the next eight weeks. Union deputy secretary Anita Rosentreter expressed confidence that the current workforce, with decades of experience in the wood processing industry, could not be easily replaced.
Rosentreter highlighted the decline of the wood industry in New Zealand over the past two years, citing job losses at several sites, including Winstone’s pulp and saw mills in Ruapehu, Oji Fibre’s Penrose pulp mill, Kinleith’s paper machine, and the Carter Holt Harvey sawmill in Nelson. She stressed the importance of preserving manufacturing jobs and investing in local wood processing to produce quality products rather than exporting raw logs.
In the meantime, the Kaitāia mills will continue to operate normally, with no immediate changes to production or customer arrangements.
Northland Regional Council chairman Pita Tipene said the councils, along with regional economic development agency Northland Inc, are committed to supporting Juken as it works through the consultation process. Initial discussions have already taken place, and further engagement is planned to explore all possible pathways.
Juken’s announcement came amid other challenges, including serious flooding in parts of northern Kaitāia. Hundreds of residents were evacuated, and floodwaters caused damage to local businesses. This comes just days after Heinz Watties announced the closure of manufacturing sites in Christchurch, Dunedin, and Auckland, as well as frozen packing lines in Hastings.
The potential closure of the Kaitāia mills follows a trend of mill closures across regional New Zealand, with many owners blaming high energy costs. Other closures include the paper production line at Kinleith Mill in Tokoroa (230 jobs lost), Eves Valley Sawmill in Tasman (140 jobs), and Karioi Pulpmill and Tangiwai Sawmill in Ruapehu (200 jobs).
