“Nippon Paper Industries expected to decide the ongoing viability of the mill by the end of the year.”
This could be the end of logging in the entire SE of Australia! Without woodchips, it wouldn’t be viable. It’s the woodchipping sales that VicForests relies on. By golly they must be in a cold sweat.
Eden woodchip mill hangs on
There were rumours getting around that the Eden export woodchip mill, 100% owned by Nippon paper from Japan, might close it’s doors before Xmas. But not yet. It announced today (Friday 21st) it would be staying open. The question is – for how long?
From a logging industry newsletter this week we read of a depressing scenario for them …
Looking back over the year you’d have to say that for the Australasian forest products industry, it would have to be one of the most tumultuous on record. I’m afraid there’s no way to put an encouraging spin on it. It’s been the industry’s “annus horribilis”. Mill’s shutting down, company closures, a strong New Zealand and Australian dollar, significant changes to the corporate ownership of the forestry estate, subdued housing starts in both countries, a Tasmanian forestry peace deal that’s still simmering away, a restructuring of the Australian MIS sector and a carbon landscape that has been turned on its head.
The declining prices for softwood pulp during much of 2012 have forced many pulp mills to try to cut wood fibre costs to remain profitable. As a consequence, the wood fibre price index (SFPI) has continuously declined the past year and, during the 3Q/12 was at its lowest level since 2010, according to the Wood Resource Quarterly.
So it could possibly be hanging on hopeful of an upturn, or a new biomass industry to sell to around the globe or domestically. It doesn’t look good for its profit margins though. Currently the Nippon shareholders are subsidising this loss making arm of Nippon Paper. How long can it hang on? Let’s hope a matter of weeks or months at most. The woodchip monster is still wiping the forests of the SE corner of Australia off the map, not to mention the wildlife that lives in them.