Pulp mill plans 3-week shut down to cut stocks

Ruapehu Bulletin, Volume 13, Issue 610, 31 October 1995, Page 1

Pulp mill plans 3-week shut down to cut stocks

Winstone Pulp International is to shut down its Karioi pulp mill for three weeks from this Thursday. Solid wood production at the company's Tangiwai, Lower Hutt and Masterton mills is unaffected by the shutdown. A world-wide over-sup-ply of pulp has led to the decision, said mill manager Alex Christensen. "This has arisen as a result of critical market conditions where demand for Pulp in our traditional markets has quickly reduced," Mr Christensen said yesterday. He said internationally pulp mills are planning down-time in Europe/Scandinavia, Canada and the

United States to take 450,000 tonnes of pulp off the market. The demand for paper products continues to increase at 2.3 per cent and WPI sees the current situation as necessary to help restore the supply-demand situation. He said it was a complex situation but basically the following factors had most affect on this situation: • In July China reduced the importation of paper products to tighten control over foreign currency expenditure. • The relatively high prices for pulp has resulted in increased production world-wide. • While prices have not decreased as yet, it is expected that there will be

some negati ve impact in the medium term until the balance between supply and demand is restored. 'The effect on us is considerable. With few saies we continue to build up stocks to the extent that we will have approximately 1 6,000 tonnes in store," said Mr Christensen. He said problems arising from the situation were: Karioi pulp starts to deteriorate after prolonged storage; storage space is now at a premium and other alternatives are becoming uneconomic; without saies there is insufficient cashflow to fund the cost of production. Mr Christensen said other mills who compete in the same market are taking

shuts up to six weeks long. "This will assist the market in restoring the balance between supply and demand."

He said while the medium to long term situation is unclear most experts say that the market will improve in the new year.

During the shutdown, employees who have leave owing and who are not required to work on maintenance will be expected to

take their leave. Others will be encouraged to take leave in advance. For others, work will be made available, said Mr Christensen.