Norske Skog Inks Long Term Sales Agreements in Australasia

Norske Skog, Oslo, Norway, has separately entered into new long-term supply agreements for newsprint and improved-grade paper with the Australian media groups News Limited and Fairfax Media Limited. Both of these customers had existing supply agreements with Norske Skog that were due to expire in June 2015 that have been replaced by new agreements that run until the middle of 2020.

 

Norske Skog has a long history of supplying both News and Fairfax with the majority of their newsprint and improved-grade paper under long term contractual arrangements. The contracts have delivered benefits to both Norske Skog and its customers through security of supply and demand with stable pricing.

 

"This is a very important agreement for the Norske Skog group and we are happy for this confirmation of our position as the preferred supplier of newsprint and improved grades to the most influential media players in Australasia. These agreements give us the opportunity to cooperate closely with these customers and thus intensify the effort to reduce costs in the value chain," said Norske Skog CEO Sven Ombudstvedt. "These agreements are securing our newsprint and improved grade market share in Australia and New Zealand until 2020. At the same time, they will also limit our future foreign exchange rate exposure in Australia and New Zealand," he added.

 

"The combined estimated value of the new agreements over their full term is approximately NOK 9 billion (approximately $1.463 billion). Norske Skog has worked separately with both News and Fairfax during 2013 to develop mutually beneficial agreements that secures Norske Skog's business with News and Fairfax beyond 2015," Andrew Leighton, regional president of Norske Skog Australasia, noted.

 

News Limited and Fairfax Media Limited are Norske Skog's largest customers in Australasia. In 2013 these customers represented approximately 70% of the newsprint and improved-grade market in Australasia.

 

Norske Skog has three mills in Australasia—Albury, Boyer, and Tasman, with a total production capacity of 700 000 metric tpy. The new agreements amount to a significant share of the mills' annual production capacity.