2023 COMMERCIAL: PAPERMAKING ENDS IN AUS

Opal has made the final decision to stop the manufacturing of white pulp and paper at the Maryvale Mill, spelling the end of papermaking in Australia.

Some 200 staff in regional Victoria will lose their jobs, and around 200,000 tonnes of uncoated woodfree (UWF) and copier paper will now need to be imported into the country to make up the deficit.

The mill’s closure has been forced by green activists persuading a Supreme Court judge that logging in Victoria’s forests was detrimental to a rare possum. Loggers, who supplied almost all the mill’s logs, had to stop work, leaving the mill without supply, and without viable alternatives.

State-owned VicForests has the rights to manage the state's forests, in return it got to log about 0.1 per cent of the trees each year, most of which it says are either fallen, a bushfire risk, or stifling growth in the forest.

Printed paper manufacturing at the mill stopped the day before Christmas Eve when it ran out of logs. The company had been producing some 200,000 tonnes of white paper a year, split 50/50 between UWF and copier grades.

Maryvale produces a significant amount of the UWF used in Australia’s offset printing, including forms and envelopes. Major merchants Ball & Doggett and Spicers are assuring printers that they are able to source alternate grades from their overseas suppliers.

The mill also produces the vast majority of copier papers used in Australia, with its dominant Reflex brand, and several others. Major supplier Office Brands, for instance, sourced 98 per cent of its copier paper from Maryvale. The local copier paper market is now seriously challenged. Copier papers are likely to rise in price by at least 50 per cent, as they are all subject to anti-dumping tariffs.

Maryvale operates on a log-to-sheet business model, and despite extensive efforts, has been unable to source alternate logs on a viable economic basis. The nearest alternate logs would have to come from 600km away from the mill. Importing pulp would likewise be an unviable proposition.

Opal will now strengthen its core strategy as an integrated manufacturer of cardboard fibre packaging in Australia and New Zealand. Supply for packaging grades comes from different trees.

Opal will now consult further on the impact of this final decision. Following that consultation, the process will then move through redeployment considerations and into a redundancy process in accordance with Opal’s legal obligations.

Opal says it is committed to working closely with its key stakeholders to achieve a successful turnaround at the Maryvale Mill by transforming the site to meet the growing need for fibre packaging in Australia and New Zealand.