Norske Skog to Convert Machine at Boyer Mill to Coated Grades

Norske Skog, Norway, reports that it will convert a machine at its Boyer mill in Australia to the production of coated grades, and close one newsprint machine at the Tasman mill in New Zealand. The machine conversion project at the Boyer Mill in Tasmania will involve an AUD 84 million investment over the next two years to allow the production of coated papers suitable for catalogs. The Australian Federal Government will contribute AUD 28 million in grants to help fund the project, and the Tasmanian State Government is providing an AUD 13 million loan. Completion is targeted for the first quarter of 2014.

"We are committed to the future in Australia, and are therefore investing AUD 84 million there. With substantial funding support from the Australian government, we are strengthening the operations at Boyer. This will create future growth opportunities for the Norske Skog group," said Norske Skog President and CEO Sven Ombudstvedt.

"The permanent closure of 150,000 metric tpy of capacity at the Tasman mill in New Zealand is required to create a better balance between demand and supply for newsprint in the region. Currently there is considerable surplus capacity of newsprint in the region. Despite years of great efforts of the staff, the decision is unfortunately unavoidable. The implementation arrangements and timeframes will be subject to consultation with employees and other stakeholders," Ombudstvedt added.

The final costs of the restructuring will be determined once the consultation process at the Tasman mill is completed.

TAPPI
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