Opal Australian Paper owner Nippon Paper Industries says the decision to close its white paper manufacturing operations at Maryvale Mill in Victoria will cost the company a total of 6.1 billion yen ($A63.9 million).
Opal's Maryvale Mill in Victoria's Latrobe Valley
In a note to investors titled ‘Notice of Extraordinary Loss regarding Withdrawal from White Pulp and Paper (Graphic Paper) Business at Opal,” Nippon Paper said:
“As disclosed in Notice of Withdrawal from the Business, on February 14, 2023, Paper Australia (Opal), a consolidated subsidiary of the company, decided to withdraw from the graphic paper business (resulting in permanent suspension of some manufacturing facilities at the Maryvale Mill) due to sudden and unexpected suspension of supply from VicForests (VF), a Victorian state-owned forestry business.
“Based on the progress of withdrawal from the business, the company expects to recognize approximately 4.9 billion yen as an extraordinary loss related to withdrawal from the business, including redundancy payments for personnel rationalization, in the first quarter of FY2024/3.
“In addition, the company expects to record in FY2024/3 an impairment loss of approximately 1.2 billion yen on fixed assets due to a recent decision to shut the M2 paper machine at the MV Mill from around late August 2023 in relation to unexpected suspension of supply from VF.”
Nippon said it was still reviewing the cost of “personnel rationalization” at the mill.
“The rest of the estimated loss related to business withdrawal, including personnel rationalization, is under scrutiny,” Nippon stated, adding that its earnings outlook would not be affected. “The impact of the above extraordinary loss on the consolidated earnings forecast for FY2024/3 has already been factored in and the earnings forecast will remain unchanged.”
https://opalanz.com
