Prince Fiber announces permanent closure of its Auckland pulp and paper mill!
Time:2024-09-30
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Due to soaring electricity prices leading to high operating costs, Prince Fiber Solutions, New Zealand‘s largest paper and pulp producer, is considering closing its paper recycling plant in Auckland. Prince Fiber stated in a statement that the Penrose factory has been losing money for three consecutive years, with high energy costs being one of the main reasons. Although the company has been committed to reducing costs through technological innovation, the results have been minimal. Dr. Jon Ryder, the CEO of the company, pointed out that although the company can maintain its supply chain for cardboard manufacturing and paper recycling through other assets, once the Penrose factory closes, New Zealand‘s paper recycling capacity will significantly shrink, leading to a significant increase in paper exports.
To this end, Prince Fiber will conduct in-depth consultations with 75 employees of the factory to jointly explore whether there are other feasible solutions. However, just one month later, the E ū union announced the unfortunate news that Prince Fiber‘s Penrose factory would be permanently closed. Union spokesperson Joe Gallagher said that the last day of the factory will be December 18th, and at least 72 employees will be unemployed as a result.
To this end, Prince Fiber will conduct in-depth consultations with 75 employees of the factory to jointly explore whether there are other feasible solutions. However, just one month later, the E ū union announced the unfortunate news that Prince Fiber‘s Penrose factory would be permanently closed. Union spokesperson Joe Gallagher said that the last day of the factory will be December 18th, and at least 72 employees will be unemployed as a result.
On Wednesday morning, the Penrose factory held an employee meeting with about 30 workers in attendance. After the meeting, the production activities of the factory were suspended for 24 hours. The New Zealand Morning Post obtained a notice from the company to its employees, which stated that the company had given employees enough time to go home and face this sudden change with their family and friends. Prince Fiber stated that after three years of sustained losses, the company had no choice but to reluctantly make the decision to close the Penrose factory.
We cannot see any turning point and cannot persist any longer. We have fully considered all possible solutions, including the detailed suggestions put forward by the union and the various issues raised by the employees. Unfortunately, we cannot find any effective way to turn the situation around. "The company emphasized that the factory‘s employees and management team are excellent, and the decision to close has nothing to do with their abilities. The company will provide guidance on resume writing and interview skills training for employees to help them smoothly transition.
The company stated in a statement that they will continue to collect waste paper at the Jinles factory near Tokoroa, recycling approximately 90000 tons of cardboard annually. Other waste paper that cannot be processed will be sent to factories under the Prince Group located in Malaysia.
Maurice Upton, a shift electrician who has worked at the factory for 20 years, said that the employees have always held a glimmer of hope that the factory can overcome the difficulties. The Penrose factory is one of the most efficient factories in New Zealand, but it cannot compete with the company‘s newly built modern factory in Malaysia. After learning that the factory was about to close, Upton‘s emotions were very complicated. I have been thinking about the future. Actually, we had a premonition six weeks ago, but now everything has become a reality, which is still shocking. Everyone‘s mood is very low.
Upton stated that he does not believe that the efficiency of workers is lower than that of workers in other factories. Factories have always faced challenges such as energy costs, but these issues are also prevalent in other companies. He felt a bit confused about the future. Some colleagues plan to go to Australia to find more stable jobs, while others will consider positions closer to home. Labour leader Chris Shipkins called on the government to take stronger measures to control electricity prices after factories officially close. He told the Morning Post, "I think this is a manifestation of market failure, and the government should take action as soon as possible.
Before the meeting began, Gallagher revealed to the New Zealand Morning Post that the workers were mentally prepared to accept the fact that the factory was closed. He pointed out that the reasons for factory closures are multifaceted, including rising electricity and natural gas prices, as well as a lack of necessary capital investment in the past. Gallagher stated that in order for the factory to continue operating, it would require an investment of up to $50 million for upgrades and renovations. Unfortunately, the company has ruled out this option. I believe today‘s announcement means that the factory will be completely closed. We must do our best to help these workers get through this difficult time as they lose their jobs before Christmas.
Last week, New Zealand‘s Minister for Social Development, Louise Epstein, stated that the government is unable to intervene in rescuing Winston Pulp International‘s two factories located in the central North Island - a pulp mill and a sawmill - in order to preserve 230 jobs. This decision was made after considering multiple factors comprehensively. On Tuesday of this week, Winston Pulp International confirmed that they will be closing these two factories.
Among them, the Cario Pulp Mill produces 220000 tons of air dried high-yield bleached chemical thermal mechanical pulp (BCTMP) annually, with 100% of the raw materials coming from radiation pine grown in forests certified by the responsible Forest Management Committee. The sawn timber produced by Tangiwai sawmill is sold in the domestic market of New Zealand and exported to various parts of Asia.
CEO Mike Ryan stated that within just one year, electricity prices have skyrocketed from $100 per megawatt hour to $500, making it impossible for the company to continue operating. Faced with this dilemma, the company had multiple communications with employees and the union to seek a solution, but ultimately had to make the decision to close the factory. Ryan said that this is a difficult decision, but the company has no other choice.
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