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PaperlinX Getting Out of Paper Manufacturing

Dec. 9, 2009 - Australia's PaperlinX said that following a comprehensive ten month review of the opportunities for its Tasmanian paper manufacturing operations, it has decided to close its Wesley Vale pulp and paper mill and one of the two paper machines at its Burnie mill. But, the company is continuing to explore a sale of the remaining operations at Burnie as an alternative to the mill's complete closure.

About 252 employees at the mills will lose their jobs due to the closures. However, approximately 170 jobs will be maintained at Burnie pending the outcome of the sale discussions, PaperlinX noted.

“While this was a difficult decision to make, it provides greater certainty for all of our stakeholders and removes one of the key uncertainties that has been overhanging the Company and its employees,” said Tom Park managing director of PaperlinX.

“To reach this point has been a complex exercise and we will now work to conclude this process expeditiously in the interests of all parties,” Park said.

The closures mark Paperlinx's exit from paper manufacturing. Upon completion of this exit, PaperlinX said that it will be solely a merchanting company, with businesses distributing paper, sign and display and graphics materials and industrial packaging.

The closures will occur in two stages, with the first expected to be completed by the end of March 2010, and the second expected to be completed by the end of June 2010.

Stage 1 involves the closure of the number 4 paper machine at Burnie (B4) and the number 11 and 12 machines at Wesley Vale (WV11 and WV12) by the end of March 2010. The Conversion Department of the Wesley Vale Mill will remain operational until all work in progress is converted (expected to take 4-6 weeks post closure of WV12). Actual closure dates will be determined following discussions with relevant stakeholders including customers.

Stage 2 involves either the sale of the balance of the Burnie Mill, including the number 10 paper machine (B10) and converting operations, or closure, which is expected to complete by the end of June 2010. PaperlinX continues to explore the potential for a sale with discussions ongoing.

Wesley Vale Mill
The Wesley Vale operation is an integrated mill with two pulp mills, a paper machine and an off-machine coater. It has the capacity to produce 40,000 tonnes per year (tpy) of pulp and 145,000 tpy of coated and uncoated papers for publishing, business forms and printing.

Burnie Mill
The Burnie mill operates two paper machines with a combined capacity of 140,000 tpy of uncoated paper (plain paper for forms, grades, photocopying, offset printing and base grades), which is then coated at Wesley Vale Mill.

SOURCE: PaperlinX Limited




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