Essity has reached an agreement with employees who went on strike at its production plant in Kawerau, New Zealand, and confirmed that production at the tissue plant has restarted.
The strike had been initiated by the country’s Pulp and Paper Workers’ Union concerning disagreements in wage negotiations, with the union demanding a pay rise to offset inflation.
Employees at Kawerau paper mill have accepted an offer from Essity in line with the Employment Relations Authority’s recommendations, ending several days of facilitated negotiations.
Kawerau is the last remaining paper production and manufacturing plant in New Zealand, supplying nearly 50% of the market – the rest is made from imported paper.
Essity’s General Manager at Kawerau Peter Hockley said the agreement allowed production to restart on 19 September.
“The focus for Essity now is on the long-term future of the Kawerau mill and rebuilding our relationships with the mill workers.”
The pay agreements will see a 5% increase in 2022 resulting in a $4,000 lump sum, a 4.5% increase in 2023 resulting in a $3,000 lump sum, and a 4% increase in 2024.
The agreement will then expire in July 2025.
Economic pressures in New Zealand have seen one other major plant recently close; in June 2021, Norske Skog announced it would permanently cease production at its 150,000tpy Tasman newsprint mill and sell the assets.
Another site has reduced jobs and pay rates to stay competitive, and in the last 12-months two other suppliers have left New Zealand because of cost pressures.
Over recent years, Essity has invested $130m in plant upgrades at the Kawerau mill.
A further $15m of investment to upgrade the plant’s paper machines and significantly reduce the mill’s carbon emissions is also planned for the near future.
Essity declined to comment further.
