We are committed to the future in Australia, and we therefore invest AUD 84 million. With substantial funding support from the Australian government, we strengthen the operations at Boyer. This will create future growth opportunities for the Norske Skog group, said Norske Skog President and CEO Sven Ombudstvedt.
The machine conversion project will see AUD 84 million invested at Norske Skog's Boyer Mill in Tasmania over the next two years to enable the production of coated grades among other things suitable for catalogues. The Australian Federal Government will contribute AUD 28 million in grants to help fund the project, and the Tasmanian State Government is providing an AUD 13 million loan. Completion is targeted for the first quarter of 2014.
The permanent closure of 150,000t of capacity at the Tasman mill in New Zealand is required to create a better balance between demand and supply for newsprint in the region. There is today considerable surplus capacity of newsprint in the region. Despite years of great efforts of the staff, the decision is unfortunately unavoidable. The implementation arrangements and timeframes will be subject to consultation with employees and other stakeholders, Mr Ombudstvedt said.
The final costs of the restructuring will be determined once the consultation process at the Tasman mill is completed.