“This situation has been driven by tough operating conditions and a flood of imported paper from Asia. We want to see paper production continue in Australia, however, we have now reached a point where without significant improvement to our cost structures, the ongoing competitiveness, and therefore, viability of our operations will be severely tested,” Peter Williams, Australian Paper’s Chief Operating Officer, said.
Mr Williams said that changes will be required across all areas of the business over the coming months to remain viable. “We need to restructure our operations and work practices to improve efficiency and productivity; work closely with all our suppliers to reduce input costs; and rebuild our market share and performance.”
Mr Williams said that Australian Paper’s parent company, Nippon Paper Industries (NPI) shared the long term vision of continuing to manufacture paper in Australia but a turnaround in financial performance was critical. “The first step involves an organisational restructure of head office to improve efficiency and remove duplication.
“NPI wants to continue investing in Australian Paper and strongly believes we can effectively compete with overseas paper manufacturers, provided we take strong action now to reduce our cost base, rebuild market share for our existing products and capitalise on emerging growth markets such as packaging and recycled office papers.
“There are also a number of external factors that are impacting our operational viability and must be addressed as part of the turnaround plan. These include access to competitive long term pricing for key manufacturing inputs such as gas, certainty of fibre supply and a strong regulatory response to imports where these products are dumped into the Australian market.
Australian Paper is the only manufacturer of office, printing and packaging papers in Australia and is one of the largest private employers in Victoria’s Latrobe Valley.