Nippon Paper and Opal to Discontinue Graphic Paper Production at Maryvale Mill in Australia
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Nippon Paper Industries Co., Ltd. announced its decision to discontinue production of graphic paper at its Australian consolidated subsidiary, Paper Australia Pty Ltd. ("Opal"). Opal manufactures and sells paperboard, kraft paper, graphic paper, corrugated board, and folding cartons in Australia and New Zealand.
Opal's Maryvale Mill in Victoria, Australia — one of Opal's manufacturing sites — manufactures and sells graphic paper, paperboard, and kraft paper. The Maryvale Mill had sourced eucalyptus wood produced in Victoria's state-owned forests as the raw material for bleached pulp — the main ingredient of graphic paper — from VicForests, a Victorian state-owned forestry business.
VicForests had been contesting a combined court case involving the Environment East Gippsland and Kinglake Friends of the Forest environmental groups since 2021 regarding its timber harvesting activities. On November 11, 2022, the Supreme Court of Victoria, Australia, issued orders against VicForests, which impacted the timber company's ability to continue its timber harvesting operations, and thus making it impossible for Opal to procure eucalyptus wood from VicForests.
In response to this sudden and unexpected suspension of supply, Nippon Paper and Opal have been considering alternative wood supplies in order to continue graphic paper operations, but concluded that alternative procurement is not feasible and decided to discontinue the graphic paper business at the Maryvale Mill, which will result in the permanent suspension of some manufacturing assets, namely paper machine 5 (M5).
M5 has the capacity to produce 220,000 tonnes per year of graphic papers, such as copy, printing and inkjet grades.
Nippon Paper said the completion date of withdrawal from the graphic papers business will take place within 2023.
Nippon Paper noted that moving forward Opal will focus on the packaging business, which is expected to grow in the future, and will strengthen its integrated packaging supply strategy in Oceania by transitioning the MV Mill into a sustainable packaging paper mill.
