As Opal Australian Paper ‘seriously considers’ closing down its paper business at the Maryvale mill in Victoria following a court order blocking supply, owner Nippon Paper’s business plan from last year noted "weak sales" of graphic paper at the mill and a plan to transfer Maryvale's M3 paper machine from graphic paper to more profitable paperboard used in packaging.
More than 300 jobs are on the line as Opal Australian Paper considers the closure of its white paper operation at the Maryvale Mill in eastern Victoria, following a Supreme Court order that forced pulp supplier VicForests to scale back harvesting in endangered possum habitats.
“Despite our best endeavours, Opal has been unable to source viable alternative wood supplies to replace the VicForests shortfall,” said Opal Australian Paper, owned by Japan-based global paper giant Nippon Paper.
Opal employs a total of about 850 workers at Maryvale. The site includes five paper machines, three pulp mills and two wastepaper recycling plants. The Maryvale Mill is also a major supplier of kraft liner board for cardboard containers.
In a Business Plan published in November 2022, Nippon Paper noted that graphic paper sales at Opal Australian Paper’s Maryvale mill were “weak,” with first half sales of copy paper down 8%, while Opal’s packaging business was “becoming profitable":
“Fiber packaging sales are recovering in line with the recovery of the Australian economy. 1H Result, +1.7% YoY.
“Graphic paper sales are weak. 1H Result of Copy Paper, -8% YoY.
“Significant increases in fuel and logistics costs are expected; Annual Forecast -A$160 million.
“Costs increased at the Maryvale Mill due to inefficient operations and one-off losses associated with the transition to packaging grades.”
Nippon said for the second half of the financial year, it planned to:
“Strengthen measures to improve profitability (transfer of Maryvale Mill's M3 paper machine from graphic paper to paperboard, improved production efficiency, etc.).
Stabilisation of Maryvale Mill operations (increase in specialist personnel)."
- Excerpt from Nippon Paper’s “For achieving medium-term business plan (MTBP) 2025 response to change of external business environment & accelerate the transformation of business structure.” November 9, 2022.
The Maryvale Mill opened in Victoria’s Latrobe Valley in 1937 and has since grown to be one of the largest employers in the region, manufacturing close to 600,000 tonnes of paper and board annually.
