Norske Skog Tasman Cuts Newsprint Capacity in Half
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Norske Skog Tasman, which owns and operates the Tasman newsprint mill at Kawerau, New Zealand, is reportedly planning to cut capacity in half, to 150,000 metric tpy, in the face of declining global and regional demand for newsprint. A report this week by the Otago Daily Times, Dunedin, New Zealand, said that company management is currently consulting with some 290 employees concerning the need to reduce capacity.
Norske Skog Tasman, a wholly-owned subsidiary of Norske Skogindustrier ASA, Oslo, Norway, is the world's largest producer of newsprint and magazine paper, and the only producer of newsprint in New Zealand. In the newspaper article, GM Peter McCarty said that the Tasman Mill had successfully increased exports to Asia over the past three years in an effort to offset the decline in demand in New Zealand and Australia. However demand in these new markets was weakening and prices were falling due to fierce competition between newsprint suppliers.
"We have worked very hard to reduce costs to allow us to compete in the Asian market, however low newsprint prices, unfavorable exchange rates, and oversupply to the Asian region has made this market unprofitable for us," McCarty said in the news article. The Tasman mill is now exporting more than two thirds of its production to Asia.
"We cannot profitably sustain this level of exports and it is now time to take action to address this overcapacity in the long term interests of the Tasman site," McCarty emphasized. He noted that the Tasman site would remain an important employer in the region, adding that the mill would continue to produce newsprint for the New Zealand, Australian, and Pacific Island markets and was actively pursuing a range of renewable energy opportunities.
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