MARKET PRESSURES LEAD JUKEN TO REFOCUS NZ MILLS

By NZHJ February 09, 2018 Building Materials

At the end of January, Juken NZ announced it was proposing to “refocus” production at its Gisborne (Matawhero - above) and Wairarapa wood-processing mills.

Likely to be most affected by the changes is the mill at Matawhero which opened in 1994 and employs around 200 full time employees processing Radiata Pine into plywood, LVL and SLVL (veneer), mainly for the Japanese housing market.

However thanks to what the company is calling a “significant drop in demand” from Japan for plywood and structural LVL products, these parts of Juken’s New Zealand processing business have been operating at a loss.

Juken’s plywood has also become increasingly uncompetitive locally and in international markets faced with product from large-scale wood processing plants in China and South America.

“Significant investment” would be required to turn things around and become competitive internationally, says Juken, but the volumes and raw materials aren’t there to support such investment.

Hence, if the changes at the Matawhero mill go ahead, it will stop producing plywood and LVL products and reduce the volume of SLVL, leaving only around 100 full time positions.

Matahwero would also move to produce higher value clearwood products like commercial interior cabinetry, furniture, solid doors and feature walls.

As a result, Juken has increased its investment in kilns for both mills to increase production of these clearwood products.

At the same time, the company is making changes to the output of its Wairarapa mill, increasing J-frame production for the New Zealand market and decreasing the specialist products made for the Japanese building market. These changes won’t result in job losses.

The proposed changes will have no impact on Juken’s forestry operations.

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