A wood processing plant in Gisborne is looking to axe about 100 jobs, half its workforce, because of a weak Japanese housing market.
Juken plans to cut production of plywood and laminated timber products at its Matawhero plant.
The factory currently has around 200 staff and would continue to process logs into other building products from the company's East Coast forests.
Juken's New Zealand general manager Dave Hilliard said Japanese demand had been falling and the local product was also uncompetitive against foreign made products.
"The Japanese housing market has been in decline and future demand for these products is not expected to improve because of the ageing population in Japan."
"Significant investment would be required to increase to a scale to compete internationally. At this time, there's just not the log or manufacturing volume of appropriate quality and price to justify that investment," he said in a statement.
He said the Gisborne plant had been losing money despite efforts to streamline and economise.
Staff are being consulted about the planned changes which would see the workforce halved.
"We'll be working with government agencies and Gisborne iwi, civic, community and business leaders, over alternative employment opportunities for our people should the changes go ahead," Mr Hilliard said.
The company's plant near Masterton would change the mix of products it makes, but no job losses are planned among the 220 staff.
Juken, owned by the Japan-based One Wood Ltd, has forests and sawmills in Northland, the East Coast and Wairarapa, and has about 1000 staff around the country.