Thursday, 04 February 2010 15:45

Mill closure illustrates challenges for Australian manufacturing: A3P

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The continued strength of the Australian dollar and the increase in the size and competitiveness of manufacturers elsewhere in the world is making it more difficult for Australian manufacturers in both domestic and export markets, according to the Australian Plantation Products and Paper Industry Council (AP3).

The Council outlines that the recent decision by PaperlinX to close its Wesley Vale pulp and paper mill and part of the Burnie facility is yet another confirmation of the major challenges facing Australian manufacturing.

Richard Stanton, CEO of A3P says, "The resources boom is providing huge benefits for the Australian economy as a whole and certain sectors and regions in particular. However, the boom is also having negative consequences for manufacturing and for those regions and communities that do not have large endowments of key natural resources."

He continues, "Australian pulp and paper manufacturers are competing against producers who receive a range of subsidies and benefits including free or cheap finance, generous renewable energy and fuel subsidies, and lower regulatory standards for environmental protection and employment conditions."

The Australian pulp and paper industry produces some $9bn of finished product each year including newsprint, packaging, printing, writing and industrial papers along with tissue and other sanitary products, according to the Council.

The A3P continues that the vast majority of these products are sold in the domestic market and in New Zealand, but these markets are increasingly being targeted by low cost producers in countries such as China and Indonesia. Australia must maintain a strong anti-dumping system to ensure Australian manufacturing is not unfairly disadvantaged, the Council states.

Also according to the A3p, the Australian pulp and paper industry does have a number of competitive advantages including;

* High quality, reasonably priced, sustainably managed fibre supply (wood and recovered paper);

* Competitively priced energy and an ability to increase renewable energy production from biomass;

* Skilled labour

* Stable business and regulatory environments

The council outlines that the pulp and paper manufacturing facilities require continuous large scale capital investment to remain competitive. Some $2bn has been invested in the industry in Australia in the past five years but even this investment is not enough to maintain the capacity of the industry and its ability to compete internationally.

Stanton also says, "The announcement by PaperlinX is sad news for the company's employees, contractors and suppliers and the communities concerned. These mills have made a substantial contribution to the Tasmanian and Australian economies over many decades."

Read 4878 times Last modified on Wednesday, 04 March 2020 20:36