Norske looks at closing paper machine

By PAM GRAHAM

Norwegian company Norske Skog is considering closing a paper machine in New Zealand.

"It will mean some job losses," said chief executive Rob Lord.

The company is looking at upgrading the No 2 and No 3 paper machines at the Tasman mill in Kawerau and the No 1 machine at Albury in New South Wales.

Under the plan, the No 1 machine at Tasman, first commissioned in the early 1950s, will close.

The upgraded machines will produce more so the total output in the region will drop only slightly. A decision on the plan will be made in December or early in the new year.

The two Tasman machines' upgrade is estimated to cost $30 million.

Norske Skog employs about 700 workers at Tasman and has long signalled that a global cost-cutting plan will include the site.

"This is part of an overall modernisation programme which is essential to the future viability of Norske Skog Tasman in New Zealand, and the overall region," Lord said.

Engineering, Printing and Manufacturing Union spokesman Mike Sweeney said the union understood the move would not be fully implemented until 2005.

"The contraction is to do with the overall international corporate request for lowering costs, Sweeney said. "The configuration is all up for grabs and we are doing what we can so that we are up front and best-dressed when it comes to performance.

"It is a world market now so we have to be conscious of the fact if we are not up in the best practice and world standards we are not going to survive," he said.

On September 10, Norske Skog announced that a joint venture it has with Abitibi-Consolidated had entered into a venture with Chinese company Hebei Longteng Paper to build a newsprint mill 280km southwest of Beijing.

The new mill, using recycled fibre, will cost US$300 million (NZ $511 million) and is intended to be the most cost-competitive in the world.