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About 150 workers are expected to lose their jobs when much of production at Auckland’s Ovato printing works closes.
The company today announced that workers will be laid off from its heatset printing arm in Wiri.
Ovato prints items such as trade catalogs and magazines.
Its Christchurch branch closed in September and will now only retain a smaller sheet feed production line at its Auckland plant.
Rising global paper prices, reduced demand and the ripple effect of the closure of Norske Skog – a major paper supplier in Kawerau – have affected Ovato over the years.
Site steward Owen Sinclair said the workers affected were shocked.
“Some have worked here for 20 to 30 years. People are now going to have to figure out what their rights are and when they’re going to finish,” he said.
About 60 percent of those who lose their jobs are members of E tū.
E tū trading specialist Joe Gallagher said the shutdown was an example of the effect of disrupted supply chains.
“When a key player in Ovato’s supply chain – the Kawerau paper mill – closed, the company found itself dependent on imported paper.
“Importing paper is not only costly due to the huge increase in shipping costs, but there is about a seven-month wait to get paper from Europe.”
Ovato Managing Director Paul Gardiner said the decision to “quit heatset printing immediately” was not taken lightly.
As the global printing industry experienced price increases as well as paper access issues, Gardiner said the New Zealand market was experiencing “unprecedented paper supply chain issues”.
“We simply cannot run a sustainable Heatset business without paper.
“This is a devastating blow to our engaged customers, many of whom we have partnered with for several years to champion the ‘power of print’ through marketing plans.”
The impact of Covid-19 has been considerable. Gallagher said companies also run the risk that the price of what they ship could also rise again during transit.
He said it was essential to ensure that “just transition” plans were in place to protect workers.
“We must work with business and workers to achieve the best outcomes for workers as some industries crumble and others thrive.
“A just transition means things like creating plans for workers to retrain where necessary and help them 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 help.”