Dozens of workers at a Christchurch textile factory are likely to lose their jobs because the company has gone into receivership.
Eighty-five workers at Christchurch Yarns, which makes woollen yarn for the carpet industry, were hearing more about their fate at a meeting on Monday.
Their union says they have a highly specialised skill set and many will find it difficult to find other work.
The company has cited a downturn in orders, in particular from Australia as demand for carpet weakens, as well as the high New Zealand dollar.
The First Union says it understands the company is proposing to employ a skeleton staff for a further three weeks to finish current orders.
General secretary Robert Reid says the news came as a bombshell to workers. He says the receivership was not voluntary but was forced on the company by Westpac bank.
He says the union has been told the company will lose money this financial year and is expecting the same next year.
Mr Reid says primary processing industries are particularly vulnerable and are being squeezed.
"What we are seeing is ... primary production being caught in a pincer movement between, on one hand, the high cost of raw material, whether that be wool, whether that be logs and the high price of the New Zealand dollar," he says.
"In this particular case the company was doubly caught out in as much as they were trading mostly with Australia, and the New Zealand dollar of course has appreciated even more against the Australian dollar than the US over the last year."
Mr Reid says producers of wool and wood are more than happy to sell their products as raw commodities on the international market but companies in New Zealand cannot afford to process them into value-added goods here.