Wage increases at New Zealand’s largest toilet paper manufacturer could lead to loss of investment and threaten local jobs, the company says.
Workers at Essity’s Kawerau mill, which makes Purex toilet paper and Handee paper towels, have been locked out since August 9 due to a pay disagreement.
Essity’s pay offer was for an increase of 14.7% over three years, comprising a 3% increase every year plus an additional cash payment this year, general manager of the Kawerau mill Peter Hockley said.
“Essity has well-remunerated employees working at Kawerau who are amongst the highest-paid working in manufacturing in New Zealand, earning nearly double the median weekly earnings of New Zealanders.
READ MORE:
* Why the politics of inflation could ultimately depend on supplies
* NZ headed for a nasty cycle of higher wages and higher costs: Economists
* Call for $22.75 minimum wage to reward essential workers
“Our wage offer maintains attractive conditions, addresses inflation impacts on employees, and is more than fair and reasonable.”
Pulp and Paper Union Kawerau secretary Tane Phillips said toilet paper supplies could dwindle because 145 workers had been locked out indefinitely without pay.
Phillips said the union wanted a pay increases 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, the pay rises following did not match expected inflation.
“After 19 days of strike action and continued wage claims that threaten the future of the site and jobs, we had no option but to initiate a lockout to try and secure an agreement,” Hockley said.
“Acceptance of the union’s demands has real potential to cost local jobs.”
Essity said, in response to increasing cost pressures and instability caused by the union’s wage demands and industrial action, it had indefinitely suspended a major paper machine upgrade project that would contribute to the viability and future of the site.
The $15 million project would upgrade Essity’s paper machine drying process to geothermal steam, delivering world-first innovation, Hockley said.
Essity is a major employer in the Bay of Plenty area, employing more than 200 people at Kawerau, and was the only local manufacturer to make tissue paper and convert it to finished products in New Zealand.
© 2022 Stuff Limited