Japanese-owned forestry company Juken New Zealand (JNL) has confirmed it will close its Northland Mill in Kaitāia, resulting in the loss of around 60 jobs, after the New Zealand government declined to support a regional rescue plan that included a woody biomass biofuel project.
The proposed package, backed by the Northland Regional Council, Far North District Council and economic development agency Northland NZ, sought government funding to keep the veneer mill operating. The proposal included modernising the existing facility and establishing a second operation that would convert waste and low-grade wood into woody biomass biofuel, creating employment opportunities for part of the existing workforce, Bioenergy Insight reported.
However, Acting Prime Minister David Seymour rejected calls for government investment this week. JNL confirmed the closure the following day, saying the mill would cease operations by August 21 after completing consultations with employees.
JNL Director Yasufumi Tsuchiya said production would gradually wind down over the coming weeks.
“We recognise the significance of this announcement for our employees, their whānau and the wider Northland community,” Tsuchiya said.
He added that the company remains open to offers from potential buyers and will continue exploring opportunities for the site’s land and assets.
The decision follows an extensive sale process managed by PwC, with expressions of interest accepted until late May. The process did not result in a buyer capable of continuing operations.
The closure will also disrupt JNL’s integrated timber processing system at Kaitāia, where two neighbouring mills process different sections of each harvested log.
Workers First Union organiser Marcus Coverdale said the veneer mill’s closure means only the upper section of the log will continue to be processed into Triboard products, while the remaining two-thirds will be exported as raw material without value addition.
JNL’s neighbouring Triboard mill, which employs about 140 people, will continue operating and is not affected by the closure. The facility generates its own energy through an on-site biomass plant fuelled by wood residues. The company said efforts to sell the Triboard business as a going concern are continuing.
The Kaitāia closure adds to a series of wood processing shutdowns across regional New Zealand, with companies citing rising energy costs as a major challenge. Recent closures include the paper line at Kinleith Mill in Tokoroa, Eves Valley Sawmill in Tasman, and the Karioi Pulpmill and Tangiwai Sawmill in Ruapehu.
The closure comes even as demand for wood-based fuel is increasing elsewhere in New Zealand’s energy sector. Earlier this year, Genesis Energy and Nature’s Flame agreed to advance supplies of up to 300,000 tonnes of torrefied biomass annually to the Huntly power station by the 2028 financial year as part of efforts to reduce coal use in electricity generation.
