Catalogue printers can expect Norske Skog to ‘meet the market price’ with its new domestically produced lightweight-coated (LWC) mechanical grade, Vantage. Newsprint declines have lead the Norwegian paper manufacturer to launch the first LWC to be produced in Australia since PaperlinX closed its Wesley Vale mill in 2010.
Norske Skog has invested $85 million converting a directory-grade machine at its Boyer mill in Tasmania to produce the LWC grade with first saleable sheets scheduled to hit the market as early as April. According to Andrew McKean, vice president marketing and communications, the business has been in contact with major producers including Franklin Web and IPMG, and reports solid support with sales already locked in.
“We feel we have a strong value proposition. The catalogue market is a highly competitive retail market and quick product turnarounds are vital. Manufacturing in Australia we are nominally offering printers a two-week turnaround, opposed to three months. Order to delivery is simpler, there’s no hold-ups with customs, and that brings with it a number effects down the whole supply chain, saving on working capital and inventory reductions for printers,” said McKean.
LWC has not been manufactured in Australia since the 2010 closure of the PaperlinX-owned Wesley Vale mill in Tasmania. Prior to the closure there were tariffs imposed on certain import grades, which were lifted with no locally available substitute. McKean confirms to Print21 that there are no immediate plans to seek to impose tariffs, and that he expected Norske Skog to “meet the market price as it is today.”
He says, “There are no plans at the moment, no. Wesley Vale had tariffs attached to it but we’re not currently planning to go down that road. It only hurts our customers in the end, and as we’ll only be supplying around 30-40% of the market we plan to be competitive."
McKean cites the ongoing decline in newsprint over the past few years resulted in an excess local capacity for the paper manufacturer, exporting a sizeable amount into foreign markets including China. Boyer site’s converted machine, PM2, will produce 140,000 tonnes of LWC per annum, with the intention to sell 100% of its output locally.
In the last financial year 242,000 tonnes of LWC was imported into Australia, according to IndustryEdge figures. McKean considers the total market to be closer to 400,000 tonnes, however, including supercalandered (SC) grades also used for catalogues which he believes could alternatively be serviced by LWC.
According to Tim Woods, managing director, IndustryEdge, the arrival of Vantage “may well be the domestic market’s game changer of the year.”
He notes that historical numbers show coated mechanical grades have grown by 5.6% per annum in the last decade. When “modestly adjusted” for the new LWC production from the Boyer mill, Woods says that forecasts continue to show annual increases, as much as 4.5% per annum.