Oji Fibre Solutions, owned by Japanese multinational Oji Holdings, has confirmed the closure of its paper recycling plant in Auckland, leading to 75 job losses.
When announcing the plan in August, chief executive Jon Ryder said the mill at Penrose had suffered three years of losses and there was no prospect of an improvement.
“These losses are caused by several issues, including dramatically rising energy costs,” he said at the time.
“We’ve looked at different options to improve the mill, including technology to save input costs. Unfortunately, these efforts have not been successful to date.”
Today, Ryder said that while the closure would directly impact the 75 people at the mill, the company would be strengthened because of it. He added that it was working with those affected to try and find jobs across other parts of the business and other businesses.
The company's Fullcircle wastepaper collection unit would not be affected and it would continue to recycle around 90,000 tonnes of cardboard a year at its Kinleith Mill.
“Penrose Mill has suffered a three-year pattern of losses, with no prospect of the situation improving.
“As I’ve said before, these losses are caused by several issues, including but not limited to, dramatically rising energy costs, and freight and labour costs. We have looked at technology and other changes to save input costs. We have also considered options presented by our staff and their unions.
“At the end of the day, however, there is nothing we could find that would make a difference.”
First Union organiser Justin Wallace said the plant's closure had been hastened by a hands-off Government which was allowing the country to sleepwalk into a manufacturing crisis.
"This closure is a terrible outcome for these workers, who are highly skilled in this industry and have roots in their local Penrose community that will now be severely challenged."
E tū negotiation specialist Joe Gallagher added that the closure sent a bad message to other manufacturers also struggling with runaway energy prices.
"Politicians have not come to the table with solutions – they’re long on rhetoric and short on delivery."
"This Government has the means and the method to save this mill, but they’ve chosen not to intervene. It’s a great irony that the Prime Minister himself has formerly led a company that has been bailed out by previous governments multiple times."
Kinleith mill.
Skyrocketing
Last week, Winstone Pulp International confirmed it would shutter its Karioi pulp mill and Tangiwai sawmill after halting operations last month.
Chief executive Mike Ryan said the company had considered alternatives and feedback from staff and unions but could not identify viable options to keep the Ruapehu district plants open.
Wood Processors & Manufacturers Association chief executive Mark Ross told NBR processors had been lobbying the Government for years about the cost of energy and it remained the industry's top issue.
A spokesperson for Oji told NBR last month energy costs for Penrose had doubled in the past year and were “skyrocketing”.
Oji Fibre Solutions parent company Oji Oceania Management (NZ) Ltd, which includes operations in Australia, reported a loss of $103.4 million for the year to December from revenue of $1.26 billion.
The company also said it was halting a $130m capital investment project in its pulp and paper division which had been a condition of an Overseas Investment Office consent granted in February 2022.
The OIO consent allowed Oji Holdings to buy the 40% of Oji Oceania it did not already own from Innovation Network Corporation of Japan for $404m.
Announcing the consent, the OIO said Oji planed to retrofit Kinleith with state of the art wastewater treatment technology.
“This is expected to result in a significant improvement in the quality of the water being discharged into the Waikato River,” it said.
Oji Fibre Solutions has three mills in New Zealand – at Penrose, Kinleith and Kawerau.
The company also makes cardboard boxes and paper bags at plants in Auckland, Hamilton, Levin and Christchurch.
Oji Fibre Solutions was previously the pulp and paper operation of Carter Holt Harvey.
