Wellington, Sept 10 NZPA – Norwegian-controlled pulp and paper manufacturer Norske Skog stopped operations at its Tasman paper mill at Kawerau today to talk to workers about plans for cost reduction and restructuring.
The company said it wanted all workers to be involved in a presentation and discussion on achieving profitability.
The nation’s largest paper mill, the Tasman plant was founded in 1952 and employs 430 people churning out over 300,000 tonnes of paper in a normal year, according to the company’s website.
The mill supplies all of New Zealand’s newsprint and telephone directory requirements and also provides around 30 percent of Australia’s newsprint needs. The balance of production is exported throughout Asia and the South Pacific.
The Finnish Forest Research Institute (Metla) predicted earlier this year that local wood use will fall by a third by the year 2020, partly due to a decline in use of paper by newspapers.
Metla has forecast that paper usage in Finland in 2020 will be at early 1990s levels and says that the pulp and paper industry must find ways of adapting to changing circumstances in order to survive.
According to Norske Skog, in the short-term the world-wide decline in the newsprint market has resulted in a global over-supply of paper and the strength of the New Zealand dollar is making trade difficult for the Tasman mill. The NZ dollar traded as high as US70.07c today.
The company told Radio New Zealand that with many mills overseas closing or curtailing production it needed to find alternative markets for its Tasman production.
A team of Norske Skog analysts has previously worked with researchers at Auckland University on how to counter declining demand for its products as electronic media replace newsprint publications.
They developed a computer model to make the best use of manufacturing, distribution and sourcing of raw materials in Australia and New Zealand — technology the company rolled out in 11 other countries.
However, the most recent application of the PIVOT model has been to determine how to downsize the company.
Norske Skog said earlier this year the computer modelling had saved it $US8 million ($NZ11.6m) a year in Australasia, and about $US120m a year globally.
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