Production has finally begun at Australian Paper’s $90m Maryvale recycled paper mill, aiming to help drag the embattled company into profit by the end of the year.
Maryvale’s opening comes two months after the company decided to shut down the Shoalhaven specialty paper mill with the loss of 75 jobs, and launched a wide-ranging turnaround strategy to stem four straight years of losses.
The mill will turn 80,000 tonnes of waste paper into 50,000 tonnes of pulp every year, massively increasing its recycled capacity from the current 15,000 tonnes.
So far it is only producing copy paper but will soon expand to the commercial printing and envelope markets. It creates 17 day-to-day jobs and expects another 250 flow-on jobs in related areas as production ramps up.
The company says the mill is an ‘important part’ of its turnaround strategy as it hopes to rebuild its market share through capitalising on growing demand for premium, local recycled paper.
The $90m price tag includes funding from the Clean Energy Finance Corporation of $9.9m, Federal Government funding of $9.5m, as well as Victorian Government help.
Senior marketing manager for sustainability Craig Dunn says the company is increasing its focus on growth products and is seeing higher demand for recycled paper as companies and consumers become more sustainability-conscious.
“We will continue to expand our range of premium recycled printing papers to meet the growing demand, particularly from government and big corporates,” he says.
“We are also seeing more demand from smaller end users for at least 50 per cent recycled paper.”
When asked about how Australian Paper will sell generally more expensive recycled paper to increasingly price-conscious and environmentally ambivalent commercial printers, Dunn says the company will work with the industry, and that locally-sourced paper was faster to market.
“We want to produce competitively priced paper that meets market demands, and develop products that are tailored to the needs of our customers,” he says.
Australian Paper produces copy and packaging paper, uncoated commercial printing paper, and envelopes, and is the only company in Australia to do so.
The Maryvale’s opening coincides with production ramping up at Norske Skog’s Boyer mill, which produces catalogue and newsprint paper.
Dunn says Australian Paper has been undertaking an organisational restructure to improve productivity and efficiency, and is working closely with its suppliers to reduce input costs.
He says this is well underway at head office and the plan is to combine its sales teams that previously sold different product areas, and streamline financial, IT and other support services to lower its overheads.
“Job losses are inevitable when you lower your cost base, but they will be progressive rather than all at once as the turnaround moves forward,” he says.
Dunn says it is too early to tell how many redundancies will be necessary.
Australian Paper operations manager Peter Williams says government and industry should support Australian manufacturing and help the environment by buying its paper.
“The Australian Government has specified that it will purchase 100 per cent recycled papers from 1st July this year and we are hopeful that all Government Departments, Federal and State, will recognise the sustainability advantages of Australian-made 100 per cent recycled paper over imports when making their purchase decisions,” he says.
“The environmental benefits of this project are significant. Importing recycled paper made overseas only adds to Australia’s landfill and also generates significant sea-freight emissions.
“In contrast, removing 80,000 tonnes of wastepaper from Australia’s landfill saves up to 200,000 tonnes of carbon emissions every year, which is equal to taking more than 70,000 cars off Australia’s roads.
“The current Australian market demand for recycled content office papers is only one third of the new plant’s capacity, so we need everyone’s help to lift the demand for Australian-made recycled content paper and do the right thing for our local environment.”