Canterbury Spinners Plant to Remain Closed

Canterbury Spinners Plant to Remain Closed

Carpet maker Godfrey Hirst New Zealand Limited, today advised that it had received reports from both engineers and insurers on the plant operated by its subsidiary company, Canterbury Spinners Limited (the “Company”), at Maces Road, Christchurch.

Both reports have determined the plant suffered extensive and irreparable damage during the devastating February 22 earthquake. Estimates suggest that it could take more than eighteen months to re-commission the purpose built yarn spinning plant and cost tens of millions of dollars, with the likelihood there would be a shortfall in insurance to cover the rebuilding. The engineers have also noted the Maces Road plant is in one of the worst hit areas in Christchurch and there is no certainty the site will be suitable for future use by the Company.

Godfrey Hirst said it was with regret that it had to take the very tough decision to close the Maces Road plant. The Company remains committed to Canterbury and would consider re-establishing the plant in an alternative location in the region. However, finding a site large enough to replace Maces Road would be challenging as the current property has a floor area of 23,000sqm, spread over approximately 5 hectares of land. Should a site be found, it could be up to two years before it was operational.

Given this precarious situation, Canterbury Spinners, with an annual payroll of $13 million, has made an offer to staff to relocate to other plants in the North Island and a number have elected to take up this option. Regrettably however, there will be redundancies for those who are not in a position to make a move.

Redundancy entitlements have been negotiated and agreed with staff and the National Distribution Union. The Company is also assisting staff with counselling and, for those who are not relocating to the North Island plants, finding alternative employment.

Godfrey Hirst New Zealand Limited, General Manager, Tania Pauling, said this was a sad day for the Company and its many loyal staff. “Unfortunately, the extensive damage to the plant and equipment has left us in the terrible situation of having to close the plant. The Canterbury Spinners plant was the most modern in the Southern Hemisphere. Purchased 19 years ago, the plant formed the basis of the growth of Godfrey Hirst, which is now the largest carpet manufacturer in Australasia. We have a loyal and capable team at Canterbury Spinners and the Company is saddened that, owing to events beyond its control, it will lose a significant number of skilled staff who are unable to relocate to the North Island. ”

Tania Pauling said the Company has increased production at its two North Island plants as a stop gap measure to ensure it continues to meet the demands of its customers.

ENDS

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