27 Apr 2014

Union welcomes sale of paper mills to Japan

4:44 am on 27 April 2014

New Zealand's biggest private sector union is welcoming the sale agreed by Carter Holt Harvey and Japanese interests.

Kinleith pulp & paper mill, Tasman pulp mill in Kawerau and Penrose paper mill are being sold to Japan's Oji Holdings Corporation, and the state-backed Innovation Network Corporation of Japan.

The sale is worth $1.037 billion.

The Kinleith pulp and paper mill.

The Kinleith pulp and paper mill. Photo: PHOTO NZ (file)

Oji plans to continue production and retain workers on existing pay and conditions.

Engineering Printing & Manufacturing Union organiser Ron Angel said he welcomed a sale to a dedicated pulp and paper company that knows its business.

"They're not a private equity company so we're not expecting them to asset strip, but actually they're more likely to probably invest within the group."

But Mr Angel adds he thinks the sale will guarantee employment as much as can be expected.

The plants are owned by Carter Holt Harvey and ultimately by Graeme Hart, New Zealand's richest person.

Oji is a substantial international paper and packaging business listed on the Tokyo Stock Exchange. It has previously invested in New Zealand, including the PanPac forest product business in Hawke's Bay.

INCJ is a corporation sponsored by the Japanese government and Japanese private enterprises.

CHH chief executive Bryce Murray said he had no doubt that they will make excellent long term owners.

An official at Mr Hart's Rank Group said the three plants no longer fit its investment strategy. Mr Hart's investments are increasingly international.

The plants at Kawerau and Kinleith date back to the 1950s. Mr Hart's Rank group bought them for $3.3 billion in 2006, but many parts of the company including land, building products and forests, have subsequently been shed.