A manufacturing plant in Mount Maunganui will close, ending operations beside a marae that has spent years calling for heavy industry to leave.
Lawter NZ announced the decision on Thursday following a review of the Totara St plant’s viability amid rising operating costs, supply chain pressures, raw material shortages and competition.
The closure will affect 39 employees and be phased in over 18 months, starting February 1. It was expected to close fully in April 2028.
It comes after Ballance Agri-Nutrients ended manufacturing at its nearby plant last year.
Both were neighbours of Whareroa Marae and its community near the Port of Tauranga, in the Mount Maunganui industrial area.
In a Lawter statement on Thursday, chief executive Mikio Katayama said the decision had not been made lightly.
“Unfortunately, the combination of very high utility costs, ongoing supply chain and raw material pressures and intense competition has made it increasingly difficult for the plant to operate on a sustainable basis.”
Lawter, a subsidiary of Japan’s Harima Chemicals Group, processes pine by-products into ingredients used in products including fragrances, pharmaceuticals, adhesives, paper and packaging.
Harima Chemicals expected to take a one-off NZ$31.6 million (JPY $2.8 billion) loss from exiting the New Zealand business, according to a preliminary estimate published on its website.
The loss was largely due to asset impairments and closure costs.
It said the plan was to cease manufacturing by June and use the plant as a logistics hub until it closed in 2028.
Lawter’s statement said the plant and its employees had made a significant contribution and it was supporting affected staff through the closure process.
“We understand the impact this decision will have on our employees, customers, suppliers and the local community.
“Our priority now is to manage the closure responsibly and respectfully and to support our employees through this difficult transition.”
Lawter said it would also work with customers and suppliers to minimise disruption.
Leaders of the 1873-built Whareroa Marae, of Ngāi Te Rangi, have long raised concerns about the impact of surrounding heavy industry on its community.
The residential area around the marae includes elder housing and a childcare centre.
It sits in the Mount Maunganui industrial area, which was declared a polluted airshed in 2019.
The following year, the marae called on the Tauranga City Council and the Bay of Plenty Regional Council to support the managed retreat of heavy industry from the area, citing concerns about the effects of pollution on the health and wellbeing of its people.
Mount Maunganui’s industrial area
Former Lawter and Ballance sites near Whareroa Marae
Map:Zoe BlakeCreated with Datawrapper
A Toi Te Ora Public Health study in 2023 found poor air quality in the wider Mount Maunganui area contributed to an estimated 13 extra premature deaths each year.
A council meeting revealed there was “no feasible pathway” to force existing heavy industries to relocate, with many businesses protected by existing-use rights under the Resource Management Act.
Whareroa Marae environment spokesperson Joel Ngātuere told the Bay of Plenty Times on Thursday the marae welcomed the removal of another heavy industrial operation.
While it recognised the impact on Lawter’s employees and their families, its community welcomed the prospect of not having heavy industry “on our doorstep”.
He said the closure was an opportunity to reconsider the future of heavy industry around the marae, and wanted the councils to ensure another heavy industry did not replace Lawter on the site.
“Our community has been forced to live with heavy industry, heavy pollutants, on our doorstep for generations.”
Ngātuere said he met with Lawter on Thursday and would continue to work with the company through the shutdown, while being respectful of the company and its employees.
He said attention would also turn to what happens to the site once operations end.
“At the moment, we would welcome the opportunity to get that land back if possible.”
Ngātuere said the marae wanted “direct oversight” of how the land was used in future.
Tauranga Business Chamber chief executive Matt Cowley told Newstalk NZ the Lawter closure was “tough news” and reflected a longer-term trend of manufacturing leaving New Zealand.
He said many of the affected workers were skilled and talented and were likely to find other work in the growing local economy.
“We’re going to have to rely on overseas resources now in a geopolitically constrained world. Relying on offshoring is a risky business for New Zealand’s industry.”
Cowley said businesses needed greater certainty and an environment that made it easier to invest in manufacturing plants.
Lawter’s closure follows the wind-down of manufacturing at Ballance Agri-Nutrients, which began last year.
Ballance ended fertiliser manufacturing at its Hewletts Rd site and transitioned it into a storage and distribution centre, cutting 60 jobs while creating six new roles.
The company said the decision was driven by its own commercial considerations and it would retain a presence in Mount Maunganui because of the site’s proximity to the Port of Tauranga.
Zoe Blake is a multimedia journalist at the Bay of Plenty Times and Rotorua Daily Post .
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