Ovato has announced it is ceasing heatset production at its Wiri plant in New Zealand making more than 100 workers redundant.
The company closed its Christchurch branch in September 2021 and will now only keep a smaller sheetfed production line at its Auckland plant.
The global printing industry faces price increases and paper supply shortages and since Norske Skog closed its Kawerau mill last year, commercial printers without guaranteed contracts for supply have faced tough challenges finding newsprint elsewhere.
Paul Gardiner, managing director for Ovato New Zealand, says the decision to shut down the heatset operation was not made lightly.
“We simply cannot run a sustainable heatset business without paper,” he said.
“This is a devastating blow for our committed clients, many of whom we have partnered with over several years championing the ‘power of print’ through marketing plans.”
About 60 per cent of those losing their jobs are E tū members.
Site delegate Owen Sinclair says affected workers were shocked.
“Some have worked here for 20-30 years. People are now going to have to work through what their entitlements are and when they’re going to finish,” he said.
Joe Gallagher, negotiation specialist at E tū, says the closure was an example of the effect of ruptured supply chains. He says, “When a key player in Ovato’s supply chain, the Kawerau paper mill, closed, this left the company reliant on imported paper.
“Importing paper is not only expensive due to the huge increase in shipping costs, but there’s around a seven-month wait time to get paper from Europe.”
He also mentioned the impact of COVID-19, saying companies face the risk that the price of what they’re shipping can increase again while in transit.
Ovato is making efforts to help workers find employment with other print companies.
Gallagher says it is to ensure that “just transition” plans were put in place to protect workers.
He says, “We need to work together with companies and workers to get the best outcome for workers, as certain industries wind down and others ramp up.
“A just transition means things like creating plans for workers to retrain if necessary and to support them to transfer their existing skills to other roles. Initiatives such as the Government’s proposal for a national income insurance scheme, New Zealand Income Insurance, could also assist with this.”
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