Oji Fibre Solutions to Permanently Cease Producing Paper at Kinleith Mill in New Zealand

Oji Fibre CEO Dr. Jon Ryder said "paper production at Kinleith Mill has suffered significant losses for several years and we see no prospect of the situation improving."

Feb. 17, 2025 - Oji Fibre Solutions on Feb. 14 announced its decision to permanently shut paper machine 6 (PM6) at its Kinleith pulp and paper mill in Tokoroa, New Zealand.

PM6, the mill's only paper machine, has 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.

On Nov. 20, 2024, Oji Fibre CEO Dr. Jon Ryder first announced proposed plans to simplify Kinleith Mill's operations by focusing on pulp and discontinuing loss-making paper production.

"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," Dr. Ryder said at that time.

After a few months of consultations with employees and unions, Oji Fibre determined that shutting PM6 would be the only path to simplify operations at Kinleith Mill and further stabilise and strengthen the company.

"We are grateful to our people for their thoughtful feedback, and for their continued focus on safety and maintaining critical production at Kinleith Mill throughout this unsettling time," said Dr. Ryder.

"After extensive work and considering a variety of options and feedback from Unions and our team, we see no feasible alternative to our proposal to simplify operations, which will keep Kinleith Mill operating, maintain jobs in the region and continue reliable supply of product to our customers.

"Therefore, we will proceed with our proposal to transition the mill to a new operating model by focusing on pulp and ceasing loss-making paper production. We can confirm, we will permanently shut the PM6 paper machine at Kinleith Mill at the end of June 2025 and move to a paper import model for our packaging operations.

"We expect this decision will result in the loss of around 230 jobs. We will now work with our people on a new mill structure and processes, and the outcome of that work will define role requirements moving forward.

"We know for many of our people and the local and regional community, this is not the news anyone was hoping to hear.

"We plan to continue producing paper at Kinleith Mill through to the end of June 2025. This provides a period in which options for affected staff can be explored; while ensuring we meet our customer obligations and provide a smooth transition to alternative paper supply arrangements for our packaging operations," Dr. Ryder concluded.

SOURCE: Oji Fibre Solutions

Go to a related article: Oji Fibre Solutions to Permanently Shut Kraft Linerboard Machine at Kinleith Mill in New Zealand - Dec. 9, 2024.