KiwiRail could lay off all train drivers at its Napier depot as the fallout from the decision to close Winstone Pulp International (WPI) operations begins to bite deeply into the New Zealand supply chain for forest products.
At the same time, Napier Port, which exports 15,000 to 19,000 20ft-container equivalents (TEU) of containerised timber and pulp every year, is also looking to lay off frontline workers.
Speaking to RNZ, Rail and Maritime Union general secretary Todd Valster said product from WPI’s plants was taken by train from central North Island to Palmerston North before travelling east to the Napier Port:
“There always a lot more jobs that disappear, that support the mills or are part of the transport infrastructure that will get affected,” Mr Valster said, amid concerns that dozens of jobs could be cut from the Palmerston North and Napier depots. “This is quite a significant jump to look at potentially closing a depot that’s been around for maybe 70 years.”
Mr Valster told RNZ that the union had met with KiwiRail twice over the past few weeks and that a consultation document would be released in early October – adding that the staff were “gutted.”
Railway workers like working in the rail, but to go home to the family and say, well actually the world is changing… it’s heartbreaking.
Rail and Maritime Union general secretary Todd Valster speaking to RNZ today
According to Todd Dawson, the CEO of the Napier Port, a proposal has now been shared with staff, which could see up to 20 roles go in a major restructure of the port’s operations:
“We won’t have a clear picture until we have gone through that change process and sought feedback from our people,” Mr Dawson said. “Given the complexity of our operations and the range of agreements in place, this may take 4-6 weeks. Our focus is on our people, and we’ll provide an update when the time is right.”
He said the facilities used by WPI “were of high quality and strategically located on-port.” They functioned as warehouses and container packing operations and could be multi-purposed for other users without too much difficulty in the future.
“With the cessation of pulp and timber production by WPI, there was now a greater supply of harvested logs available for export from the central North Island,” Mr Dawson said. “Additionally, demand for space at Napier Port remains high, with both current and prospective customers seeking more on-port storage and packing solutions.”
The major restructuring of rail and shipping came after Wood Central reported that up to 230 workers lost their jobs after WPI—one of New Zealand’s largest export mills—confirmed that it would shutter two mills in the Ruapehu District.
At the time, Mike Ryan, WPI’s CEO, said the decision was made due to “the dual impacts of internationally uncompetitive energy prices in New Zealand and the relatively low current and forecast market prices for pulp and timber.”
“We know this decision will hit our people and the community hard,” Mr Ryan said in a company statement. “All of our people have been on full pay during the operational pause and consultation period. They will receive their redundancy entitlements in full, including work through their notice period.”
“This was not a decision taken lightly. We gave due consideration to the feedback and alternatives put forward by staff and unions but have been unable to identify any viable options that enable the company to continue operations on a sustainable basis.”
Why (select) NZ mills are vulnerable to sky-high energy prices.
It comes as Wood Central last month reported that New Zealand’s energy prices are now among the highest in the Western World, leading Prime Minister Christopher Luxon to warn that the country is facing “an energy security crisis.”
At the time, Winstone Pulp International CEO Mike Ryan said increasing energy prices were unsustainable: “We have pulled out all the stops over a sustained period to keep this business up and running in the face of rampantly increasing energy prices.”
Electricity was a significant proportion of the company’s costs, rising from 15% to more than 40%. “The main issue for WPI is the timeline for a potential solution and whether that solution will bring energy costs in New Zealand down to a level where we can be internationally competitive.”
- Click here to learn more” about the power crisis and its impact on New Zealand forestry.
