Jobs jeopardised following Kawerau mill closure

Tasman mill in Kawerau

Norwegian newsprint producer Norske Skog has confirmed it is closing one of its New Zealand newsprint machines as it restructures its Australasian operations.

The closure will halve the capacity to 150,000 tonnes a year at its Tasman mill in Kawerau, which employs 290 people.

The company says the machine will probably close early next year, but the exact timing or the number of job cuts will be known later.

CEO Sven Ombudstvedt says the closure is an inevitable result of a "capacity surplus" in New Zealand.

Tasman Mill general manager Peter McCarty says falling demand and unfavourable exchange rates have made large-scale exports to Asia unprofitable.

"The mill will continue to produce newsprint for the New Zealand, Australian and Pacific Island markets," he says.

Meanwhile, Norske Skog is pumping an extra $A84 million into its Boyer Mill in Tasmania over the next two years so it can produce catalogue paper.

The company's other Australian mill in Albury, NSW, would continue to produce newsprint for the Australian market. 

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