Oji Fibre Solutions to Permanently Shut Kraft Linerboard Machine at Kinleith Mill in New Zealand

After extensive work and considering a variety of options, Oji Fibre Solutions is proposing to simplify Kinleith Mill's operations by focusing on pulp and discontinuing loss-making paper production.

Dec. 9, 2024 - Oji Fibre Solutions (OjiFS) on Nov. 20 announced plans to permanently shut paper machine 6 (PM6) at its Kinleith pulp and paper mill in Tokoroa, New Zealand.

The Kinleith Mill operates one paper machine, PM6, with the capacity to produce approximately 330,000 tonnes per year of kraft linerboard (from virgin fiber and recycled fiber). The mill also produces about 265,000 tonnes per year of bleached softwood market pulp.

According to the company, the proposed machine closure is intended to "stabilise and strengthen the company."

Dr. Jon Ryder, CEO of OjiFS, explained, "After extensive work and considering a variety of options, we are proposing to simplify Kinleith Mill's operations by focusing on pulp and discontinuing loss-making paper production. Therefore, we are consulting on a plan to permanently shut the Kinleith PM6 paper machine and move to a paper import model for our packaging operations.

In August of this year, OjiFS announced plans to close its Penrose mill in Auckland, New Zealand, following three years of losses. The Penrose Mill had the capacity to produce about 78,000 tonnes per year of recycled medium liner.

"Manufacturing paper has become unprofitable. Paper production at Kinleith Mill has suffered significant losses for several years and we see no prospect of the situation improving," Ryder said.

"Due to the complexities of operational changes required at the mill for this proposal, the exact number of potential job losses is unknown at this stage. However, we anticipate approximately 230 roles may be affected.?The wider impacts will become clearer as we work through the consultation period, through to final decision and into next year.

"This proposal takes into account our ability to continue to serve our customers with as little disruption as possible. We propose to continue producing paper at Kinleith Mill through to the end of June 2025, to ensure we meet our packaging customer obligations and provide a smooth transition to new paper supply arrangements.

"Under this proposal, there would be no change to the wastepaper collection service provided by OjiFS Fullcircle, which will continue to collect, sort and bale wastepaper throughout New Zealand for recycling.

"This is a difficult change to propose because of the impact on our hard-working team. We acknowledge the history and importance of Kinleith Mill in the local community and region and have made every effort to ensure we continue operating at the site.

"Our need for change is in no way a reflection of the experience, skills, and dedication of all the team and leadership at Kinleith Mill.

"We will now enter a consultation period with employees at Kinleith Mill, through to early January, to see if there is an alternative we have not yet considered.?We anticipate announcing a decision by end of January 2025.

Oji Fibre Solutions is one of Australasia's leading manufacturers of pulp, paper and wood-fibre based packaging solutions.

SOURCE: Oji Fibre Solutions