A report has found the Australian pulp and paper industry is in crisis with employment, investment and exports all falling.
The $12 billion industry employs almost 19,000 people but has been hit with recent plant closures in Tasmania.
Paperlinx closed its Wesley Vale in February and the Burnie mill will shut at the end of July.
Among Launceston timber company Forest Enterprises Australia went into voluntary administration last week after struggling to finance its $216 million debt.
The report recommends an expansion of timber plantations and for governments to provide more investment support to deal with greater competition with Asia and projected shortages of wood for pulp and paper.
The Federal Government has established a Pulp and Paper Industry Innovation Council in an attempt to reverse the decline in the sector.
Industry Minister Kim Carr say the council will advise him on priorities for industry development.
“The work begins with discussion but it is my expectation, and the expectation of everyone involved, that it will culminate in concrete plans for action,” he said.
“The new industry innovation council will champion innovation within the industry and build connections with the wider innovation system.”
The formation of the council is one of 18 recommendations in the report.
ProPrint report:
Pulp and paper industry “at a crossroads”
by Daniel Fitzgerald
Aug 25, 2009
Senator Kim Carr, the federal minister for Innovation, Industry, Science and Research, has released a paper outlining the strengths and weaknesses of the Australian pulp and paper manufacturing industry.
The Pulp & Paper Industry Strategy Group Issues Paper was developed by the Pulp and Paper Industry Strategy Group (PPISG) established by Carr in June, with the minister describing it as an “important first step in identifying opportunities for the industry to become more internationally competitive”.
“The industry has been up front about the challenges it faces and now needs to develop strategies to overcome them,” Carr said in a statement.
Indeed, the report singles out research and development (R&D) and capital investment as areas of particular concern.
“[The industry’s] weaknesses lie in the need for more investment in world-class plant and equipment and for new, innovative production processes,” the report states. “Measures to promote investment, R&D and innovation on the basis of mutual obligation between governments and industry, may need to be considered.”
The report also covers the impact of digital media technologies on the demand for paper, as well as the challenges raised by climate change, environmental sustainability issues, and emerging economies such as China.
In a boost to the industry’s sustainability claims, the report says that “the Australian community needs to become more aware of the pulp and paper industry’s strong environmental credentials in terms of water reduction and use of biofuels”.
However, the report also forecast further economic hardship for the industry, acknowledging that “the challenges presented by increasing international and domestic competition and by the industry’s aging capital stock may result in mill closures and further industry rationalization”.
Amongst the technological challenges faced, the report mentioned the emergence of e-readers and the Espresso Book Machine (EBM) as worrisome for the industry. The report also touched on the controversy surrounding the Productivity Commission’s recommendation to repeal parallel import restrictions (PIRs) on books.
“Some participants in the pulp and paper industry are concerned that the parallel importation of books may lead to a reduction in the quantity of books being produced in Australia,” the report states.
A final report is expected to be delivered by the PPISG in November. The paper can be downloaded from the Department website: HERE
Meanwhile in Tasmania:
Receivers for the Tasmanian timber company Forest Enterprises Australia have sacked nearly 30 workers so far, with the possibility of more job losses later in the week.
Twenty eight jobs have been axed at the Launceston and Lismore offices.
The redundancy list includes managing director Andrew White.
After struggling to refinance its $216 million debt, FEA went into voluntary administration and partial receivership last week.
Receiver Manager Tim Norman says other positions at the company will be reviewed in the coming days, including at the Bell Bay sawmill.
Christine Milne:
Pulp and Paper’s ‘business-as-usual’ strategy misses a huge opportunity
Hobart, Tuesday 20 April 2010
The Pulp and Paper industry strategy released today by Innovation Minister, Senator Kim Carr, is a tremendous missed opportunity to put Australia’s forest industry onto an economically and ecologically sustainable footing, the Australian Greens said today.
“This is a business-as-usual strategy from an industry which doesn’t want to change, not an innovation strategy from a government looking to the future,” Australian Greens Acting Leader, Senator Christine Milne, said.
“This was an opportunity to involve real innovators in the field and move forestry into the future. Instead it is an exercise in re-branding business-as-usual as innovation
“What does it say that the Minister for Innovation asked the Pulp and Paper industry to write a report about itself? You can’t solve problems with the same thinking that created them.
“It is no surprise that the people who have overseen a failing industry are now recommending a direct pipeline to taxpayer funds and corporate welfare.
“Some of the recommendations play catch-up with industry developments overseas – gasification of black liquor, for example, is a desirable move.
“But the bulk of the recommendations read like an election pork-barrel wish-list from the CFMEU Forestry Division – to get paid to keep doing what they are doing.
“They want locked in tax incentives such as the disastrous MIS schemes, locked in recognition of the Australian Forestry Standard, locked in native forest logging, locked in promotion of biomass from burning forests for energy, and locked in Regional Forest Agreements.
“Extraordinarily, they are blatantly asking for windfall gains under an emissions trading scheme – looking for more than 100% compensation for any costs!
“Before any of this is agreed to, somebody should review the effectiveness of the $42 million spent by the Commonwealth to supposedly transition out of native forest logging in Tasmania. The industry took the cash, made no transition, kept logging the forests and is now on its knees.
“What a missed opportunity to put forestry on an economically and ecologically sustainable footing.”
