New Zealand’s timber industry is battening down the hatches as it deals with falling demand, rising operational costs, and global tariffs. Against this backdrop, Carter Holt Harvey announced plans to shut its Eves Valley sawmill – the largest sawmill in the South Island – as it looks to consolidate its operations at its Kawerau facility in the Bay of Plenty. The proposal, now under consultation, places 142 jobs at risk and signals a strategic retreat from the South Island.
Established in the 1980s, the Eves Valley mill has long been a cornerstone of the South Island’s supply chain. Processing 250,000 tonnes of timber every year – largely for the country’s framing market, it draws directly from surrounding forestry estates and supports a network of contractors, transport operators, and service providers. Its closure would reverberate across communities in Brightwater, Wakefield, and Richmond.
Speaking to RNZ, Jeff Ilott, executive director of the Timber Industry Federation, said the sector is facing systemic challenges. Building consents have plummeted—from 51,000 in 2022 to just 34,000 in the year to June—while costs for electricity, compliance, and insurance continue to climb. International markets have also become more volatile, with tariffs and conflict disrupting exports.
“It’s just batten down the hatches and try to do the best you can,” Ilott said. “Some mills in New Zealand are now into their fourth and fifth generation. They don’t walk away lightly.”
For Tasman Mayor Tim King, who has lived next to the mill for most of his life, the announcement was both personal and deeply unsettling. “There have been rumours around the future of this mill for some considerable time, but it still comes as a huge shock when you actually hear that it’s intended to close,” King said. “The implications are very significant for us as a region.”
Nelson Mayor Nick Smith echoed King’s concerns, noting that the decision was not a reflection of local performance but part of a broader consolidation strategy. “I asked if there was anything council or government could do to save the jobs. They made plain—not really,” Smith said. “It was really that consolidation of their timber manufacturing business in New Zealand that was driving the closure.”
According to Smith, Carter Holt Harvey cited Kawerau’s proximity to the Kaingaroa Forest and access to geothermal energy as key advantages. The company has not sought government support, and officials remain doubtful that the proposal can be reversed.
The timing of the announcement has compounded existing pressures in the region. South Island Minister James Meager pointed to recent flood events that left between 3,500 and 6,000 hectares of windfall timber requiring urgent processing—material that could have been handled at Eves Valley.
“Ultimately, if they’re consolidating, they’re going to need to make a decision about a site somewhere, and for them they make their decisions based on what works best for them,” Meager said. “We’ve seen a lot of positive signs of growth in the South Island over the last six months.”
Political reactions have been swift. Labour MP Damien O’Connor, formerly the representative for West Coast-Tasman, linked the closure to a broader slowdown in construction activity. “This is just the latest in a series of job losses—18,000 in construction and over 11,000 in manufacturing since December 2023,” O’Connor said. Meanwhile, Nelson MP Rachel Boyack called for greater investment in domestic wood processing to meet national infrastructure needs. “We need more onshore wood processing to build homes and other infrastructure, not less.”
Union leaders have also voiced concern over the impact on workers. E tū team leader Finn O’Dwyer-Cunliffe said many employees have been with the mill since its inception. “If the closure goes ahead, it will be hugely detrimental for workers, their families, and the wider community,” he said. A final decision on the closure is expected on 4 September.
