From Eves Valley to Tokoroa and Raetihi, closures of mills and plants are gutting regional economies, leaving communities fearing for their futures, writes Catherine McGregor in today’s extract from The Bulletin.
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Eves Valley mill faces closure
Carter Holt Harvey confirmed last week it is consulting on the closure of the Eves Valley Sawmill, a decision that would see 142 jobs disappear from the region. The company says it wants to consolidate operations at its Kawerau plant, arguing the North Island site can supply the country’s timber needs more efficiently. But for those who live in the surrounding Tasman communities, the potential closure feels catastrophic. The site has been a mainstay of the local economy for 40 years, processing a quarter of a million tonnes of timber annually. E tū union organiser Finn O’Dwyer-Cunliffe told RNZ that many workers were in despair: “They are absolutely gutted. Some of them have just purchased homes and are now desperately worried about how they are going to meet those mortgage repayments.” Tasman mayor Tim King warned the knock-on effects will ripple across small businesses, contractors and the forestry sector that depended on the mill.
Kinleith’s last roll of paper
The Eves Valley decision is the latest in a grim sequence of closures that are helping to hollow out New Zealand’s manufacturing base. On June 30, Tokoroa’s Kinleith Mill produced its final roll of paper. As Anna Rankin writes in a deeply reported Spinoff cover story this morning, the closure of the plant’s paper production mill has been a body blow for locals. The mill had once employed thousands, anchoring the town’s economy and identity for generations; now only pulp operations remain.
Long-term underinvestment, escalating energy costs and global competition sealed the mill’s fate. “That’s unfortunately the way New Zealand is going now, eh. We’re not really a manufacturing country anymore,” Kinleith worker Matt Grant told Rankin. Economist Craig Renney said the loss of New Zealand’s last domestic packaging manufacturer was a stark symbol of deindustrialisation, noting the “craziness” of importing paper from Asia to wrap New Zealand-grown kiwifruit.
Power prices and politics
The soaring price of electricity is key to many of these closures. As Newsroom’s Jonathan Milne reported last year, wholesale prices have quintupled since 2021, rising from around $100 per megawatt hour to more than $500 at times. While some large firms lock in long-term hedges, others are exposed to sudden spikes that make operations unsustainable. The issue has become politically charged. Regional development minister Shane Jones has accused the big four gentailers of prioritising solely “net profit” over supply security, describing them as a cartel that has left industry uncompetitive. Ruapehu mayor Weston Kirton, whose district lost two mills last year, is blunter still: “Fixing the New Zealand electricity market must be the government’s number one priority. We are at a critical juncture… If we fail to act now, the repercussions will be felt across all sectors of our economy.”
Towns on the brink
The combined effect of plant closures is reshaping provincial New Zealand. When mills, meatworks and mines shut, workers often have little choice but to leave – either for larger towns or across the Tasman. Recent meatworks closures in Ohakune and Timaru, along with the loss of pulp and timber jobs in Raetihi, have intensified fears of “zombie towns”, a phrase economist Shamubeel Eaqub first used a decade ago, prompting a minor outcry.
Today he warns that isolated places reliant on one employer – like Raetihi, a small town in a relatively remote part of the central North Island – are most at risk. After Waihi’s Martha mine closed in 2015, workers were able to commute elsewhere in the Hauraki District, he tells RNZ’s Susan Edmunds. “It might not have been as good or as highly paid, but they had opportunities. If it’s isolated it’s much more troubling.” Infometrics’ Brad Olsen adds that towns that rely on manufacturing and processing employers are particularly vulnerable to permanent, structural job losses. Without diversification of local economies or targeted government support, more small towns risk sliding into decline.
