More than 200 jobs saved! Mill sale welcomed by region

Prime Minister Jacinda Ardern visited the Whakatāne Mill on the campaign trail in September last...
Prime Minister Jacinda Ardern visited the Whakatāne Mill on the campaign trail in September last year. Photo: NZ Herald
Whakatāne mayor Judy Turner is thrilled the Whakatāne Mill has been officially sold.

Mill owners SIG Combibloc announced yesterday it had sold the mill to a consortium of investors led by European investor Dr Dermot Smurfit.

The announcement means that besides staff who have chosen to take redundancy, more than 200 mill staff will keep their jobs.

"It's really exciting news, it's a great outcome and well done to all parties involved," Turner said.

"I'm particularly thrilled for the contractors outside the direct employment of the mill as this has been a very nervous time for them and their staff."

Turner said she was relieved the mill had been saved as its closure and loss of jobs would have been devastating for the local economy.

"To the new owners, congratulations and well done. We're really pleased to have you on board," she said.

Karl Gradon of Toi Economic Development Agency said close to 300 families would be breathing a sigh of relief with the announcement.

"We really welcome Smurfit to the business community, we have a wonderful opportunity to take the momentum that Smurfit brings to their alternative to plastic packaging technology, and it looks like we will have an impressive customer base that they will link Whakatāne Mill into globally," he said.

"It's very exciting for us."

The Smurfit consortium includes New Zealand investors, and many have experience in owning and operating paper packaging businesses.

A spokesman for the Smurfit Consortium, Ian Halliday, who will become chairman of the Whakatāne Mill, said the consortium looked forward to developing a more competitive operation to support customers in New Zealand and around the world.

"We believe that the Whakatāne Mill has a very bright future as the only folding box board mill in Oceania, and we intend to invest heavily in the mill to support both our customers and New Zealand's forest products industry," he said.

The mill will stop producing liquid packaging board and going forward will focus on its customers' requirements for high-quality folding box board, carrier board and food service board, all of which are currently manufactured at the mill.

Mill general manager Juha Verajankorva said the agreed acquisition by the Smurfit Consortium was a positive outcome and represented a new and exciting era for the mill.

All senior management will remain with the new owners.

"This is a welcome development for Whakatāne and the wider Bay of Plenty region," he said.

"It's also great news for the New Zealand paper packaging sector and we appreciate the positive support of our workforce, our suppliers and customers in working towards this outcome which has been welcomed by all.

"Our preference was always for a sale of these assets so that they could continue to be productive. It took until almost the final whistle, but this is a satisfying outcome," Verajankorva said.

Mill news great for Eastern Bay region: EMA

Confirmation that the Whakatāne Mill continues to have a future is great news for the town, the wider region and the New Zealand pulp and paper industry, says the EMA.

"Whakatāne has had to deal with ups and downs in recent years with significant investment from the Provincial Growth Fund generating exciting new developments, mixed with the tragic eruption of Whakaari White Island and its impact on local tour operators, made worse by the Covid-19 pandemic," chief executive Brett O'Riley said.

"The potential loss of the mill, a longstanding EMA member in the region, would have been a further blow as it is one of the largest employers in the town, and a key part of the Eastern Bay of Plenty pulp and paper ecosystem.

"It's great news that a rescue package of international and local investors has come together to shore-up the future of the mill and the livelihoods of its workers."

O'Riley said that news of further investment in the mill, with its unique position as the only folding box board mill in Oceania, was a further vote of confidence in its longer-term future.

"It seems as if there is a lot of goodwill towards making this new investment work and while it's likely there will be some shorter-term transitional issues the longer term view seems very positive for Whakatāne.

"We will be doing our best to encourage New Zealand exporters to utilise their products."

Caution for the sector

Toi EDA's Karl Gradon expressed caution, saying while this was good news there were still clouds on the horizon with the fibre-processing sector.

"China has announced self-sufficiency in logs by 2035, which creates significant risk for the forestry sector.

"The majority of New Zealand logs are exported to developing countries in their raw form in anticipation of their domestic logs becoming available in just a few years. Toi EDA encourages the government to work on policy that incentivises investment in added value processing in New Zealand, rather than shipping the value creation offshore."

- Charlotte Jones, Local Democracy Reporter

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