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Kinleith not competitive in spite of production

Kinleith not competitive in spite of production record

Carter Holt Harvey Kinleith Chief Executive Brice Landman said today that in spite of record production last year the mill was still not globally competitive, underlining the need for the reorganisation.

“Yes we had record production but as we have been telling our people for the past year we are still not returning our cost of capital – we are not making money, it’s as simple as that.

The Mill’s production performance is a result of the improvements achieved through upgrading the mill since 1997 said Mr Landman. “Hundreds of millions of dollars had been spent on modernising our plant to ensure it was capable of the production.”

Mr Landman said the compelling business case for Kinleith to reorganise had not altered in the past year - “ in fact the case has become more urgent with pulp prices still well off their highs, an increasing exchange rate and fluctuating energy costs”.

“The harsh reality is that, in the past several years, Kinleith has performed very poorly financially despite constant improvements in production volumes.

“Even our record production months have failed to make a profit because of relatively low world pulp prices and high exchange rates.

Mr Landman said Kinleith should be proud of its production achievements; however, alone they are not enough to keep the mill viable.

“We must still strive to keep our costs down and make the best use of all our resources, including our people.

He agreed that employees had the right to strike in support of their collective agreement negotiations however he said striking should be the last resort rather than the first.

“The company has never refused to bargain over the collective agreement or to move any further on issues of concern. It is far too early to say we have reached an impasse<” he said.

Mr Landman believes the issue can be settled if the union is willing to return to the bargaining table.

Kinleith has never achieved a settlement inside of two or even five days as suggested the ‘norm’ by the Union. “Typically it has taken months for a settlement at Kinleith and this has been the case for a number of years,” said Mr Landman.

Mr Landman said since the current collective expired in March 2001 the Union has walked away from the bargaining table at least twice for many months and it has been company initiatives that have brought them back to the table.

The company has always indicated a willingness to meet with the union at any time, however the union is not available until Wednesday.

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