A union representing workers at a south Auckland steel mill sold to Australian steelmaker BlueScope Steel says more than 70 jobs will be lost when it closes in 2015.
Fletcher Building has announced it has sold Pacific Steel to BlueScope Steel, Australia’s largest steelmaker, in a $NZ120 million ($A112.16 million) deal.
The deal will mean Fletcher’s steel mill at Otahuhu will shut its doors by the end of 2015.
The Australian company will build a billet caster at its Glenbrook mill south of Auckland operated by its NZ Steel unit, spending about $NZ50 million on the new plant, it said.
Until then, Fletcher will continue to operate the Otahuhu mill and supply BlueScope with billet on commercial terms, Fletcher said.
“These are tiny plants on a world scale and this is how you allow manufacturing to survive here,” Philip King, Fletcher’s investor relations manager, told BusinessDesk on Monday.
“The competition comes from imports.”
The rolling mill and wire mill at Otahuhu will remain open with the steel mill closing.
Fletcher chief executive Mark Adamson said most of the Pacific Steel rolling mill and wire drawing workers would be offered work by BlueScope.
But the Engineering, Printing and Manufacturing Union says that more than 70 jobs will be lost.
“These are high-value, skilled jobs, and it’s a blow to our members and their community to lose them,” said Bill Newson, EPMU national secretary, on Monday.
He said there may be retraining opportunities for workers and the union would work with Fletcher to explore options.
The job losses were an indictment of the government’s failure to support jobs and manufacturing in New Zealand, he said.
Under the deal, Melbourne-based BlueScope will pay $NZ60 million for Pacific Steel’s long-products rolling and marketing operations and pay about $NZ60 million for its working capital.
BlueScope will pay half the $NZ60 million price of the assets upfront and the remainder once it has commissioned its new billet caster.
The deal doesn’t affect ownership of Fletcher’s steel distribution business, Fletcher Easysteel, or its reinforcing business, Fletcher Reinforcing.