High dollar leads to expected closure of sawmill

High dollar leads to expected closure of Gisborne’s Prime Sawmill

28 July 2009: WPI International (WPI) Managing Director David Anderson today told the 65 staff at the Prime Sawmill in Gisborne that the company believed it was no longer possible to keep the mill running in the face of a downturn in international prices and a continued high New Zealand dollar.

“Only six months ago we undertook significant re-investment in the site that led to real gains in productivity. We believed the mill, which had previously struggled, was back on track to being viable. But the continued rise in the dollar all through this year, along with the fall in wood prices on international markets, has more than wiped out these gains,” he said.

“As a result the mill has been accumulating very high monthly losses, and unfortunately it cannot continue on that basis.

“This is a very disappointing point to have reached as we are aware of the impact of a closure on the workers at the mill and on the local community,” he said.

Mr Anderson said the company had invited further urgent input from staff over the next few days but realistically believed the scale of the rapidly accumulating losses would require the site to be closed almost immediately.

WPI would provide redundancy payments and assistance to employees if the site closed.

“The high New Zealand dollar is threatening jobs right through the manufacturing export sector, and things won’t get any better for the sector until the problem of the high exchange rate is addressed,” Mr Anderson said.

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