The Eastern Bay of Plenty community is still reeling after the news that one of its biggest employers will be closing down, meaning 160 people will lose their jobs.

Norske Skog announced the closure of the Tasman mill in Kawerau and a sales process for the mill's assets on Wednesday.

In a statement on their website the Norwegian-based pulp and paper company states they initiated a 'strategic review” of their role in New Zealand in October 2020, 'made necessary by the secular decline of the publication paper industry and the impact of Covid-19”.

They state that despite exploring a range of alternatives the process has resulted in a decision to close the Tasman mill and proceed with a sale of the mill's assets. Read more here.

Toi EDA, an economic development group in the Eastern Bay, says the news is devastating for the families involved and for the wider regional wood processing sector.

Despite the news, Toi EDA says the recent focus on diversifying the region's economy away from reliance on forestry has been validated by the closure announcement.

Toi EDA has offered support to the impacted workforce via the MSD coordinated efforts, and see's great opportunities to reposition the workers due to the surge in economic confidence in the region.

In a statement released on Thursday, Toi EDA says the Eastern BOP is one of the few regions in the country to have rebounded strongly to pre-Covid employment levels and continues to grow based on several catalytic sectors that are receiving significant investments.

'With the community-minded Sequal Lumber Mill taking on an extra shift in Kawerau, the booming boat building sector recruiting heavily, record planting in the high value horticulture sector, and Whakatohea Mussels taking on almost 100 new roles, the demand for work ready employees is strong,” says Toi EDA general manager Ian Morton.

'Three years ago we recognised the need to change our economy to be more diverse and thankfully these opportunities exist today as a result.”

The construction of the Kawerau Putauaki Industrial Development, leveraging the clean geothermal energy found in the town, has already begun to attract investment in the town, such as the Waiu Dairy Factory.

Ian says the construction of the new roundabout to service the new industrial complex is well underway and the town is well set up to leverage the heavy industrial engineering expertise located in Kawerau.

He says mill workers wanting to start their own businesses are encouraged to tap into support resources that the EBOP Chamber of Commerce has on offer, with a business advisory role that regularly visits Kawerau.

The local industry community group, Industrial Symbiosis Kawerau, will continue to support those businesses that work alongside the Norske Mill to ensure they are able to identify new opportunities.

Fellow Toi EDA general manager Karl Gradon encourages central government to align wood processing policy that will reduce the incentives for log owners to export logs offshore in their raw form and instead find ways to add value locally.

The distortion in the world lumber market is extreme and, alongside our high energy costs, is causing the closure of our domestic processing capacity.

He says if these distortions continues, then the domestic wood processing sector will continue to be challenged and further closures will be on the horizon.