THE Western Southland town of Otautau has been dealt a blow with the Bright Wood sawmill closing, resulting in 19 job losses.
After many years of uncertainty, Bright Wood New Zealand opted to close its Otautau operation permanently, with the owners saying it was no longer economically viable.
In 2007 and 2009 Bright Wood New Zealand had indicated it would close the mill, only for the American-owned company to change its mind and continue with reduced staff numbers. However, the closed sign will now go up permanently.
Bright Wood New Zealand began operations in 1998, after the purchase of the Waikana sawmill in Otautau.
The mill once employed more than 100 people, but had just 19 fulltime employees when Bright Wood New Zealand announced to staff last month it would close for good.
Bright Wood New Zealand contributed almost $80,000 a month in wages to Southland’s economy before the operation started to wind up.
Milling has finished and the remaining staff are now in the process of cleaning up the site and shipping equipment to the United States. The Otautau site will be put up for sale.
Site manager John Crane told the Southland Expressthe announcement caught some staff by surprise, but many of them had already been able to find work elsewhere.
Of the 19 staff, just four lived in Otautau while the others commuted from Invercargill and other parts of Southland.
Mr Crane was one of those staff who travelled each day from Invercargill and he said when the operation was officially wound up he would shift north and retire.
Otautau Community Board chairman Andre Bekhuis said the closure was disappointing for Otautau, which has a population of about 750.
“It is a blow to the town, but what can you do. [Bright Wood New Zealand] did their best to keep it going. They were great for our town and have been very supportive of Otautau over the years.
“Otautau is a pretty resilient town so we will keep ticking away,” he said.
Bright Wood New Zealand president Kevin Stovall, who is based in the United States, said the sawmill was no longer viable because of various reasons.
The international market for radiata pine logs had been strong for several years, and would continue to be for the foreseeable future, Mr Stovall said. However, he said to ensure the Otautau mill became internationally competitive it would have required a substantial investment in equipment.
“We conservatively estimated that an investment certainly in excess of $10 million would have been required to make the mill competitive.”
Mr Stovall also pointed to increased shipping costs, both domestically and internationally, and the weakened US dollar as some of the other factors in the closure at Otautau.
“The US dollar has been in a 15-year cycle of generalised weakness, and it is our opinion that this will continue for quite a number of years given the high structural fiscal debt in the US.”