The paper company announced yesterday that it would be quitting manufacturing to focus solely on its global merchanting operations, and would be closing its entire Wesley Vale site and a portion of its Burnie site as a result. The company also flagged possible full closure of its Burnie site if it is unable to find a buyer for the operations, citing the total number of jobs on the chopping block at 252.

However, AMWU state secretary Anne Urquhart told ProPrint that the actual job losses will be closer to 580, once all contractors and sites are accounted for.

Urquhart reported being “disgusted” at the lack of notification given to the union about the company’s plans, even though the company was known to be conducting an internal review of its operations.

“I guess we knew that if the company didn’t operate fiscally, that it was under threat,” Urquhart said

“All the company said was they were doing this review, there was really no indication that it would lead to closure.

“Until the announcement, we weren’t even 100% sure what the review entailed,” she added.

However, Urquhart conceded there was little the union could do in the face of economic consolidation.

“We know that the mills haven’t been operating very effectively. They’ve been losing money, they’re old,” she said.

“We just have to try and make sure the employees are looked after.”

The Tasmanian and federal governments have already announced a $20 million package intended to stimulate investment and jobs in the northern Tasmania region, with federal innovation minister Kim Carr saying he is “very disappointed” by PaperlinX’s decision to pull out of the area.

“We will work with stakeholders including councils, community groups and unions to see this through,” said Tasmania premier David Bartlett.

“We want to keep families and communities together and that will be a firm focus of our initiatives.”

PaperlinX has said it expects the Wesley Vale closure to be completed by the end of March, by which time it also expects to have shut down its B4 paper machine at Burnie. A sale or closure of the Burnie mill, including the B10 paper machine on site, will be completed by June.

PaperlinX managing director Tom Park said: “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. 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.”

“It is unfortunate that it was not possible to create a scenario where the Tas Paper business could be sustainable over the long term, but a more positive outcome for the Burnie Mill will depend upon the outcome of current discussions with a potential purchaser and the level of support any new owner receives from the wider community.”

“The operations at Burnie and Wesley Vale are together currently substantially loss making and this level of loss, exacerbated by the current high Australian exchange rate and business configuration, is unsustainable.”

Pulp and paper industry expert Robert Eastment told ProPrint that the move was somewhat inevitable for a company that has been progressively shifting its focus away from manufacturing.

“PaperlinX over the last decade has been focused significantly on growing its international merchanting,” Eastment said. “As a consequence it has not invested as much in manufacturing.

“The Tasmanian mills were always unlikely to have long-term operations without significant investment.”

The greatest change that local printers will see, Eastment said, is the absence of any manufacturer of coated white papers in Australia, which will impact on delivery times.

“The short delivery time was the advantage of the Tasmanian mills. That benefit is no longer available to local printers,” Eastment said.

“In the past, when some printer had some cock-up with a job and they had to source some paper quickly they could always grab some from Tasmania. They’ll have to plan ahead a little better now.”

The trend away from manufacturing for PaperlinX was first demonstrated earlier this year with the sale of its Australian Paper operations to the Nippon Paper Group, in a deal which noticably excluded the Wesley Vale and Burnie mills.

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