After months of deliberation and consultation, cross laminated timber company XLam has confirmed fears it would close its New Zealand operations at Nelson.
A statement from the company said the operations are no longer considered commercially sustainable and that “a new business model” would “usher in a more commercially competitive and sustainable way for the company to supply CLT to the market.”
The move, first flagged by The Fifth Estate in early April, comes after the collapse of the Strongbuild business in Sydney and the failure of the voluntary administrators to find buyers for the business at Bella Vista as a going concern.
A statement from XLam said the move would allow more efficient servicing of demand for its product in New Zealand.
“As demand for off-site fabrication, mass timber construction and CLT continues to grow, so too does the XLam business, with a focus on improved customer solutions and increased manufacturing utilisation”.
Chief executive officer Shane Robertson said the decision followed an extensive business review of current operations.
“The existing highly manual, capacity-constrained operation in Nelson has been confirmed to be commercially unsustainable for future CLT manufacture,” he said.
Future supply to New Zealand would be met from the company’s relatively new operations at Wodonga, with a staged closure at the Nelson plant over the next few months.
The company will establish a new warehousing and distribution operation in the Waikato region, and new offices at Nelson.
It has also promised to keep all 37 staff members at Nelson employed “at least until July next year” with “emerging opportunities” in New Zealand and Australia offered first to current staff and at least some deployments already in place.
“While on the one hand we are delivering positive news for our New Zealand customers and the construction sector, we have also made difficult decisions that impact our people,” Mr Robertson said.
“We remain committed to fast-tracking the Certificate III in Competitive Systems and Practices so employees complete this qualification that they have been working hard to achieve.
“We also value the ongoing support of local stakeholders including Nelson Regional Development Agency, Chamber of Commerce and The Mayor’s Office, as well as WINZ and other government agencies, to ensure that staff welfare is paramount.”