Fifteen staff at a large Milton woollen mill have lost their jobs while another seven timber processing workers in Naseby are facing pre-Christmas redundancy.
Qualityarns NZ Ltd managing director Mike Barra confirmed the Milton layoffs yesterday, saying those made redundant finished last week. It left 27 still employed at the mill.
In a statement, Mr Barra said several factors were involved in the decision, which he said was not made lightly.
These included the decline in demand for its products because of the growing amount of cheap imported clothing from China and India, and the drop-off in tourists buying woollen products.
"The increasing costs of labour - that is extra holidays, minimum wages, ACC - meant that it was difficult for labour-intensive industries to compete fairly against unregulated economies."
Mr Barra said staff from Work and Income New Zealand had held an in-house seminar with affected staff recently, which had been appreciated and of help to those facing being jobless just before Christmas.
Qualityarns was established nine years ago after buying the former Alliance Textiles woollen mill which closed that same year.
The first day of operation at the new mill was January 17, 2000, with 11 staff. By the end of its first year, the company employed 35 people.
The Milton operation is the only mill in New Zealand able to produce woollen, semi-worsted and worsted yarns.
• Part of Naseby's timber processing plant is closing, leaving seven workers to consider their future employment before Christmas.
Malaysian-owned forestry giant Ernslaw One Ltd, which owns the business, told staff last week its Naseby timber laminating operation was to close. The jobs of six staff at Ernslaw One's bio-energy plant and three staff at the company's forestry operation will remain on site in Naseby.
Winstone Pulp International Ltd, which is a subsidiary of Ernslaw One, manages the operation of Naseby Lumber Ltd, which is itself a subsidiary of Winstone.
Winstone managing director Dave Anderson said staff would know whether they could be offered employment at one of the company's other timber processing plants by the end of next week.
"We didn't want to have to do this, and certainly not at this time of year. We have to give staff the opportunity to bring forward ideas and that process will be completed by the end of next week, after which we will be able to let people know what's happening," Mr Anderson said.
Blue Mountain Lumber, at Tapanui, is one plant staff could be transferred to, although Mr Anderson said it was unlikely laminating would take place at the South Otago plant due to the poor financial return for laminated timber.
The Naseby sawmill, which closed earlier this year, was removed and replaced on site by the laminating operation, in order to make about 800cu m of remaining four-by-one timber into four-by-two product for the housing market.
"The laminating operation at Naseby was always going to be discontinued. We have been trying to shift staff over the last five or six months, but things escalated during that time with the economic crisis," he said.
An economic downturn in the housing market meant laminated timber was not returning the money it cost to make, and the decision was made to stop lamination at Naseby and export the remaining 600cu m of unlaminated timber.
With no sawmill on site, there was no further need for lamination at Naseby once the leftover timber was sold.
"I imagine the only impact on the community will be the loss of those seven people's wages," Mr Anderson said.
Naseby has a permanent population of about 125.
Plans for further development of Ernslaw One's bio-energy and firewood plant in the town include the increasing production of clean-burning wood pellets.
