Employees were told of the decision on Monday morning and will be offered alternative positions elsewhere with Boral, along with a relocation package.

Boral executive general manager Bryan Tisher said the decision to cease the manufacturing of flooring products at Maxwells Creek was due to significant wood fibre cost increases.

“And an old and inefficient plant made the operation commercially unviable,” he said.

“We are disappointed that increased wood fibre costs coupled with high operating costs will result in the stopping of production at the mill.

“We will arrange visits to the other Boral sites as well as tours of local communities for employees and their families considering redeploying to positions at other sites.

“As well we are working with local employment agencies, Dungog Council and large employers to assist with finding alternative placement opportunities in the area.”

Mr Tisher said those employees who decided not to take the redeployment opportunity would be entitled to a redundancy package.

Dungog mayor Glenn Wall was “devastated” by the closure.

“Last week I was asked to attend a meeting at 9am on Monday and knew it would be either good or bad news,” Cr Wall said.

“I was hoping they [Boral] were going to announce an expansions project, but it wasn’t to be.

“It is another nail in the coffin for Dungog – it’s not what the town needed.

“First we had dairy deregulation and now this is the death knell of the timber industry.

“And it comes on top of the economic downturn which still affects the shire.

“We don’t have much else here, just a little bit of light industry and manufacturing.

“There will have to be a lot of brainstorming and thoughts on how we are to reinvent ourselves and stay a viable community.

“The mill was the fourth largest employer in the shire and to lose it in one [fell] swoop is a bloody hard pill to swallow.

“And then you have all the allied trades such as electricians and boilermakers who worked at the mill too.

“The flow-on effects of this is really going to affect everyone in the town for a very long time.”