28 Jul 2009

Gisborne sawmill to close, 65 jobs lost

4:29 pm on 28 July 2009

Wood processing company Winstone Pulp International is closing its Prime Sawmill in Gisborne.

Managing director David Anderson told the mill's 65 staff on Tuesday that a downturn in international prices for wood, combined with the high value of the New Zealand dollar, which has appreciated 35% since March, are behind the closure.

Mr Anderson says the company undertook significant reinvestment in the mill earlier this year, which increased productivity, but is still losing hundreds of thousands of dollars a month.

The union representing workers at the sawmill says the closure announcement came as a huge shock to the 65 staff.

National Distribution Union area organiser Colleen Ryan says nobody at the sawmill expected the decision.

Ms Ryan says workers will receive a redundancy package and at least four weeks' notice or pay.

The closure is the second blow to Gisborne's primary sector economy in less than a week.

Fruit and vegetable company Cedenco Foods closed one of its factories in Gisborne, with a loss of about 120 seasonal jobs, blaming a drop in the international demand for corn cobs and kernels.