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PaperlinX spends $258m on Maryvale mill upgrade

Thursday, 01 September 2005
By Print 21 Online Article

PaperlinX claims the project will contribute to the long-term profitability of the company, in the process consolidating the strategic value of the mill. The project is targeted to boost the quality and cost-effectiveness of products produced at Maryvale, while also enhancing the mill’s environmental performance.

Tom Park, managing director of PaperlinX, claims the commitment was made upon securing of hardwood plantations for production of its communication papers, with all of the softwood supply already sourced from plantations.

Park claims the project will be the catalyst for industrial reforms at the mill, “with productivity gains enhancing the attractiveness of the project, while securing the ongoing contribution Maryvale Mill makes to the local economy and community.” PaperlinX has indicated the project is contingent on construction unions signing the industrial project agreement within seven days of the announcement.

The PaperlinX board has also pinpointed the cooperation of the Victorian Government in allowing the project to make it off the ground. “Their support in key areas of resource provision and infrastructure upgrading are fundamental.”

The project approval comes at the same time as the release of PaperlinX’s results, with the paper giant reporting revenue of $7.5 billion for the 2004/05 financial year. Net profit after tax was $91.5 million, a fall of 16 per cent from the previous year.

PaperlinX concedes it is feeling from the impact of reduced profitability of the overall paper manufacturing business in Australia, struggling from lower selling prices, lower domestic sales and higher logistics and production costs.

“Market conditions have remained challenging as we enter the new financial year, and have not improved from the soft environment experienced in the June quarter,” says Park. “We have a clear plan to lift the total returns from Australian Paper, though it will need some improvements in the external environment to realise our return targets through the cycle.”

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