News of the closure of Brightwood New Zealand's Otautau mill comes exactly two months after West Otago-based Blue Mountain Lumber confirmed 56 job losses for similar reasons.
Smaller sawmills around the South have also cut back staff numbers and operating hours in a bid to beat the tough economic times.
Brightwood management said yesterday the Otautau plant would close on or just after June 12.
It cited weak demand for timber and US Government policies which it said contributed to the battle facing timber exporters dependent on a strong US currency.
The company hoped economic fortunes would turn around and make it viable to reopen the mill, but said that would not happen in the next year to 18 months.
It is not the first time the company has announced the mill's closure.
In February 2007, it shocked staff by first telling them the operation would be closing but, just days later, pleasantly surprised workers by confirming the doors would stay open.
There is unlikely to be a repeat of that this time.
In a statement, Brightwood New Zealand president Kevin Stovall said the shutdown would be an orderly one.
"We intend on processing all material on site, paying creditors and proceeding with the mill's shutdown thereafter."
There was no mention of what redundancy packages, if any, might be offered to staff.
Mr Stovall said the world was in the middle of a significant recession and demand for wood products had dropped dramatically, while supply had not.
He said the company had been struggling for more than four years to counter a weak American dollar.
He hoped the mill could re-open in time.
"It is our intention to pursue all available commercial options with the mill site but the current operating model is not feasible in the present economic environment," he said.
Brightwood wanted to thank all staff for their hard work and dedication through the years.
Mr Stovall said the company recognised the economic "malaise" would not last foreverOtautau site manager John Crane declined to comment when contacted and National Distribution Union organiser Ken Young could not be reached last night.
Brightwood once owned land at Milburn in South Otago and had plans to develop a wood processing plant there before abandoning the project three years ago.
