Tasman mill closure confirmed

Wednesday 16 Jun 2021

Sixty-six years of newsprint production at the Tasman Mill in Kawerau will come to an end in less than a month, following the announcement that Norwegian global wood processor Norske Skog will close the mill on June 30.

The mill closure will cost 160 jobs in the timber town that also hosts pulp and packaging manufacturer Oji Fibre’s plant, also confusingly called the Tasman Mill.

All workers will be paid full redundancy on a decision that had clearly been on the cards since a strategic review was commissioned last September. In recent weeks, Norske Skog had heavily cut back production at the mill as it was more profitable to trade electricity supplied at a low fixed price on the wholesale electricity market, where prices have been consistently over $200 per megawatt hour for months.

The newsprint operation began in 1955 and the existing plant was capable of churning out 150,000 tonnes of newsprint a year, but the collapse in newspaper advertising and circulation has reduced demand for the product. Norske Skog will seek to sell the mill’s assets.

“I know that today’s decision is disappointing and sad for many people,” said Norske regional president Eric Luck, adding, “it’s the end of an era, but the structural change in the newsprint industry provided no viable alternative for paper production at Tasman. The domestic market for newsprint has shrunk considerably and so too have export markets. Covid-19 has hastened the decline.” He acknowledged the mill had been “an important contributor to the local and national economy”. The closure follows the announcement on May 31 that the Whakatāne mill, employer of 210 in the eastern Bay of Plenty town, would be saved from what had seemed like certain closure by a consortium of offshore and NZ buyers.

Ray of hope - The Whakatāne plant will reduce its product range, moving out of packaging for liquid drinks and investing further in folding box, carrier and food service board. Oji Fibre, meanwhile, recently sought political intervention to secure natural gas supplies, applying pressure that saw methanol producer Methanex, which uses 40% of total gas produced in NZ, reduce supply and allow fuel to flow to Oji, electricity generators and some other major gas users.

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Source: Stuff news

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