Manufacturer closes production in NZ, expands in Australia

Manufacturer Norske Skog has announced plans to close one of its newsprint machines at its Kawerau plant in New Zealand.

According to the company there is a surplus capacity of newsprint in the region, and the decision was unavoidable.

It will result in a permanent closure of 150,000 tonnes of capacity at the mill; time-frames and redundancy details are yet to be outlined.

At the same time the company will invest $107 million in upgrading machines in Australia, after getting substantial funding support from the Australian government, reports Newstalk ZB.

The Australian Federal Government has contributed $36 million in grants and the Tasmanian State Government has provided a $17 million loan.

New Zealand Labour leader David Shearer said any job losses in New Zealand will be bad news for the nation, although it will be a boon for Tasmania.

"What we are seeing is a government that has a laissez-faire, hands-off approach to business, and therefore as a result we've lost 25,000 jobs for example in manufacturing. This government needs to be much more engaged in job creation," Shearer said.