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The big issue for tissues in Australia as Sorbent cuts production

The Sorbent Paper Company, owned by Asia Pulp & Paper (APP), will be reducing its workforce by around half at its manufacturing facilities in Box Hill, Melbourne with around 70 job losses expected in its production staff by the end of the year. Employees were advised last week. Sources: Timberbiz, IndustryEdge, Australian Manufacturing

Staff have been asked to nominate for voluntary redundancy.

Some manufacturing will be moved offshore to Indonesia. One of two paper machines in Box Hill will be permanently closed as well as other converting equipment with some to be relocated to Indonesia.

IndustryEdge has said that it believes that hand towel and facial tissue production is likely to be outsourced in what APP says is a hybrid model. This hybrid model relies on importing Livi, Sorbent, Sorbent Professional, Handle napkins and facial tissues. Toilet paper production will remain in Box Hill.

The equipment moves are reported as follows:

  • Box Hill Paper Machine 3 will cease operating 1st October 2023
  • Box Hill CW114 converting machine will cease operating 1st October 2023
  • Box Hill Napkin 20 machine will be relocated in November 2023
  • Box Hill Napkin 22 machine will be relocated in Q1 2024
  • Box Hill Facial F310 machine will be relocated in Q1 2024
  • Greystanes Facial Line will be relocated in Q4 2023.

The company said in a statement:

“Sorbent and Solaris has commenced a restructuring exercise for the operations at Box Hill in Victoria. Under the restructuring, manufacturing of certain products would be moved offshore while both manufacturing units in Box Hill and Greystanes would continue to operate with right sizing.”

APP acquired Sorbent Paper and its brands in 2018 and has a history of moving manufacturing to its main production centres including Indonesia.

There is no Australian or New Zealand competitor with anything like the same footprint as APP, providing the global tissue giant a near unique capability.

APP reports its decision in regards the Box Hill site was “…necessitated by the challenging macro-economic environment, including unsustainable energy costs, among others.”

The company has said that its gas bill had surged by almost 300% and said it was aware that the east coast market of Australia may not be able to supply enough gas reliably in the near future.

The closure of a tissue machine at the Box Hill site will see domestic tissue production capacity fall to around 237,000 tonnes per annum, a fall of around 13%. An initial analysis by IndustryEdge for the 2022-23 financial year is that tissue consumption has exceeded 365,000 tonnes.

Solaris operations part of the APP group will continue in Greystanes, New South Wales. The company has commenced negotiations with the union.