Norske Skog global cost-cutting plan to affect NZ

By PAM GRAHAM

Norske Skog will decide where and when costs will be cut in its New Zealand business, which employs about 700 people, in six to eight weeks, regional president David Kirk said yesterday.

The Norwegian papermaker, which bought Tasman pulp and paper mill at Kawerau from Fletcher Challenge Paper in 2000 and later onsold the pulp business to Carter Holt Harvey, has begun a two-year global cost-cutting plan that will affect New Zealand.

The business is managed by Kirk from Sydney. The global plan included decisions about headcount but Kirk would not discuss specifics in New Zealand.

The company is trying to save 1 billion Norwegian krona ($266 million) this year and then make decisions that will save another 1 billion krona annually.

Six areas are being considered: sales and general administration, operations and maintenance, customers and sales, capital expenditure, working capital and purchasing.

At mills both maintenance and headcount will be considered. There were opportunities to improve maintenance by using materials better, Kirk said.