MARYVALE FACES CLOSURE OF PRINT PAPER PRODUCTION

Opal Paper is considering a reduction in size, or the full closure, of white paper production (UWF and copy papers) at the Maryvale Mill, as production grinds to a halt following the court judgement against its log supplier VicForests.

The company says it is facing a “complex” situation as its supply of hardwood logs has stopped. It says production of white paper is set to cease on 23 December. It is looking at standing down its 300 white paper staff in January. It says a reduction in size or closure would result in potential redundancies.

Opal has not been able to find alternate supply for Maryvale to date. It says the “availability of viable alternate wood supply remains uncertain.” Industry sources tell Print21 that alternate supply of either logs or pulp to Maryvale may be economically unviable, meaning the likely end of UWF and copy paper production in Australia.

Unions fear the jobs, well-paid in local terms, will be permanently lost. Reports say staff have been offered leave paid or unpaid in the first instance, but those who cannot take it or cannot be redeployed will be stood down. Opal says there may be temporary stand-downs commencing in January. The mill is the largest employer in the Latrobe Valley.

Echoing the thoughts of the industry, David Martin, managing director of major merchant Spicers said, “The whole situation is really disappointing. We feel for the mill.”

The nearest hardwood plantations to the mill are 600 kms away on the SA Vic border, which would mean prohibitive transport costs, and those plantations have full order books anyway. Importing pulp would dilute the log-to-white-paper efficiencies of Latrobe, and would place it as the mercy of the vicissitudes of the global pulp market.

In the row over an endangered yellow-bellied possum, the judge ordered VicForests, the state-owned forestry manager, and major supplier of logs to Maryvale, to take increased care when logging, but VicForests said it couldn’t do any more, saying in reality the judgement amounted to a stop logging order for its contractors, which has now happened. Print21 understands VicForests harvests 0.1 per cent of the forest annually, and most of the trees are those that have fallen over, are a bushfire risk, or are blocking growth. Paper production takes ten per cent of the logs, the rest going into the construction industry, which is now also struggling for supply.

The mill at Maryvale produces the Reflex copy paper, which is 80 per cent of the copy market, as well as other copy papers, and a range of UWF uncoated woodfree papers used in offset printing, and for envelopes and forms.

The Maryvale mill, part of Australian Paper, is now owned by giant Japanese paper Nippon Industries. However, supply is tight around the world, as paper companies such as Stora Enso and UPM have taken mills out of production, or switched papermaking lines to packaging grades.

Opal Australian Paper is also one of the largest users of the Port of Melbourne, exporting 88,000 tonnes of a range of premium papers to 70 countries in Asia, Europe, North and South America, Africa and the Middle East. All will now stop.

Maryvale also produces packaging grades, known as brown paper, which are not affected, as these come from softwood trees in different areas.