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Norske Skog to invest in Tasmania

Norske Skog will convert a machine at its Boyer mill in Australia to the production of coated grades of paper, and close one newsprint machine at the Tasman mill in New Zealand. The international company’s Australian operations are responsible for the supply of around 600,000 tonnes of paper Australia-wide. Source: Timberbiz

The company says it is committed to a future in Australia and so will invest $84 million albeit with substantial funding support from the Australian government.

This will create future growth opportunities for the Norske Skog group according to Norske Skog President and CEO Sven Ombudstvedt.

The machine conversion project will see $84 million invested at Norske Skog’s Boyer Mill in Tasmania over the next two years to enable the production of coated grades of paper.

The Australian Federal Government will contribute $28 million in grants to help fund the project, and the Tasmanian State Government is providing a $13 million loan.

Completion is targeted for the first quarter of 2014.

The permanent closure of 150,000 tonne of capacity at the Tasman mill in New Zealand is required to create a better balance between supply and demand for newsprint in the region.

Norske Skog said that despite years of efforts by the staff, the decision is unfortunately unavoidable. Arrangements and timeframes will be subject to consultation with employees and other stakeholders said Mr Ombudstvedt said.

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