About 150 workers are set to lose their jobs when a large section of production at Auckland’s Ovato printing plant closes.
The company announced today that workers would be made redundant from its heatset printing arm in Wiri.
Ovato prints items such as commercial catalogues and magazines.
Its Christchurch branch closed in September and will now only keep a smaller sheetfed production line at its Auckland plant.
The global increase in paper prices, reduced demand, and the flow-on effect of Norske Skog – a major paper supplier in Kawerau – closing, has affected Ovato over the years.
Site delegate Owen Sinclair said 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.
About 60 per cent of those losing their jobs are E tū members.
E tū negotiation specialist Joe Gallagher said the closure was an example of the effect of ruptured supply chains.
“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.”
Ovato managing director Paul Gardiner said the decision to “immediately exit heatset printing” was not made lightly.
While the global printing industry was experiencing price increases as well as issues accessing paper, 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 for our committed clients, many of whom we have partnered with over several years championing the ‘power of print’ through marketing plans.”
The impact of Covid-19 was far-reaching. Gallagher said companies also face the risk that the price of what they’re shipping could also increase again while in transit.
He said it was critical to ensure that “just transition” plans were put in place to protect workers.
“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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