Wage hike at toilet paper factory will lead to job losses, Essity says

The supply of toilet paper could dwindle as 145 workers have been furloughed from the Kawerau plant indefinitely without pay.

KEVIN STENT / Stuff

The supply of toilet paper could dwindle as 145 workers have been furloughed from the Kawerau plant indefinitely without pay.

Pay rises at New Zealand’s largest toilet paper maker could lead to loss of investment and threaten local jobs, the company says.

Workers at the Essity factory in Kawerau, which makes Purex toilet paper and Handee paper towels, have been on lockdown since August 9 over a pay dispute.

Essity’s wage offer was for a 14.7% raise over three years, including a 3% raise each year plus an additional cash payment this year, said Kawerau plant managing director Peter Hockley .

“Essity has well-paid employees working at Kawerau who are among the highest paid in manufacturing in New Zealand, earning almost double the median weekly wage for New Zealanders.

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“Our salary offer maintains attractive conditions, takes into account the effects of inflation on employees and is more than fair and reasonable.”

Pulp and Paper Union Kawerau Secretary Tane Phillips said toilet paper supplies could decline because 145 workers had been locked out indefinitely without pay.

Pay rises at New Zealand's largest toilet paper maker could lead to loss of investment and threaten local jobs, the company says.

JOHN BISSET/Stuff

Pay rises at New Zealand’s largest toilet paper maker could lead to loss of investment and threaten local jobs, the company says.

Phillips said the union wanted a pay rise in line with inflation and the rising cost of living, and while there was the additional one-off payment offered in the first year of the three-year contract , subsequent wage increases did not match expected inflation. .

“After 19 days on strike and ongoing wage demands that threaten the future of the site and jobs, we had no choice but to enter a lockout in an attempt to reach a settlement,” Hockley said. .

“Accepting union demands has real potential to cost local jobs.”

Essity said that in response to growing cost pressures and instability caused by wage demands and union industrial action, it had suspended indefinitely a major paper machine modernization project that would help sustain the viability and in the future of the site.

The $15 million project would upgrade Essity’s paper machine drying process to geothermal steam, delivering a world-first innovation, Hockley said.

Essity is a major employer in the Bay of Plenty area, employing over 200 people in Kawerau, and was the only local manufacturer to manufacture tissue paper and convert it into finished products in New Zealand.