West Vic timber too far for Australian Paper

Sourcing pulpwood from the Green Triangle Region proves too expensive for Reflex’s manufacturer, as its focus turns to Ballarat in middle Victoria.

According to Shaun Scallan, general manager of corporate social responsibility at Australian Paper, calculations reveal sourcing from that region probably put them out of business.

“It will cost us more to get that wood than what we can source locally, but it means we will be able to continue to operate the Maryvale Mill. We are the largest private employer in the Latrobe Valley, directly employing 1,300 people.

“Sourcing from the Green Triangle makes the input cost of the raw material too expensive for a viable operation. If we paid too much for pulpwood, we would of course have to pass that onto the end product and people will only pay so much for a ream of paper,” he says.

An Australian Paper and VicForests’ commissioned Pöyry report claims that it is technically feasible for the entire pulp sourcing operation to transition over to Western Victorian plantation wood. Yet without significant long term Government subsidy, it would have significant economic and logistic impacts and reduce wood supply security.

On top of transportation costs, the paper manufacturer would have to directly compete with established investments already in place. The additional cost of this wood delivered to Maryvale mill compared to the current native forest supply would be $31 million a year.

Jim Henneberry, CEO of Australian Paper, maintains the company’s commitment to getting the right economic, social and environmental balance through its Future Fibre Strategy. Noting that it is currently under intense competitive pressure from imported papers with the exceptionally strong Australian dollar.

He says this will be achievable through a combination of maximising usage from existing plantation suppliers, using investment plantations in Central Gippsland and accessing some of the closest parts of the Western Victorian plantations.

“We will continue to source our wood from certified fibre sources as well as looking at ways we can adapt our manufacturing processes to maximise efficiency and minimise our environmental footprint.

“Australian Paper has a 30 year planning window on fibre supply and is undertaking a detailed review of the options for fibre supply over that period. The review has included extensive consultation with stakeholders and expert opinion on the potential for use of plantation timber from Western Victoria, other plantation sources, sustainably managed wood from regrowth state forestry operations and recycled waste paper,” says Henneberry.