New Zealand's biggest toilet
paper supplier expects a $60 million upgrade of its Bay of
Plenty manufacturing facility to fight the competitive
challenge posed by increased Asian imports.
SCA Hygiene Australasia's expanded Kawerau plant was
officially opened by Prime Minister John Key yesterday.
The company, whose brands include Purex and Handee, is a
joint venture between Sweden's SCA and Australia's Pacific
Equity Partners and has a 30 per cent share of the local
toilet tissue and paper towel market.
Its Kawerau expansion includes a 13,000 sq m tissue
conversion hall, a 55m long tissue winding machine and
robotic packing and dispatch technology.
The upgrade had created 10 new jobs at the plant, which
employed a total of 200 staff, said SCA Hygiene's president,
He said the main pressure the company faced in New Zealand
was competition from Asian tissue paper imports - mainly from
China and Indonesia - and the Kawerau site's increased
efficiency and product quality would make it more
"A high New Zealand dollar means a lot of imports have come
into the market," Diplaris said. "That's why it was important
we got the business relatively fit and that meant having
state-of-the-art equipment, better quality products, improved
productivity and basically securing our manufacturing
footprint in Kawerau."
The kiwi dollar was trading at US81.82c against the greenback
at 5pm last night, down from US82.85 earlier in the day after
the Reserve Bank announced it would hold the official cash
rate steady at 2.5 per cent.
The Bay of Plenty's pulp and paper sector has been hit by
lay-offs in recent years, including 110 job losses at
Norwegian-owned Norske Skog's Kawerau Tasman Mill in early
2013, while the PSA outbreak dealt a blow to the kiwifruit
industry, which is a major seasonal employer in the area.
Kawerau District Council Mayor Malcolm Campbell said SCA
Hygiene's investment was good news for the entire eastern Bay
"The upside of this for the Kawerau district is the fact
we've got a company that's digging in for the long haul,"
Campbell said. "You don't spend sixty million dollars and
then shut up shop after three or four years and move on."
Diplaris said the expansion secured a long-term future for
the Kawerau plant.
"It also confirms the site's significant export role with an
estimated 2600 containers of product exported through the
Port of Tauranga each year," he said.
The Kawerau expansion followed a 2010 review of SCA Hygiene's
manufacturing operations on both sides of the Tasman, which
aimed to determine how the firm could improve efficiency
through new systems and technology.
Diplaris said the company had decided to carry out the
Kawerau upgrade because the site "ticked all the boxes",
including access to raw materials and its proximity to the
Port of Tauranga.
SCA Hygiene also manufactures the Treasures nappy brand at
its plant in Te Rapa, Hamilton, where around 140 workers were
laid off last year after serviette and tissue production
lines were shifted to Kawerau.
In 2009 the company announced it was closing its plant in
Henderson, Auckland, which it said was running annual losses
of more than $3 million.
- By Christopher Adams
of the New Zealand Herald