Pulp mill prospects promising

Waimarino Bulletin, Volume 2, Issue 12, 21 August 1984, Page 9

Pulp mill prospects promising

The future prospects of the Winstone Samsung Pulpmill at Karioi are looking good, according to two top executives. Both Mr J.B. Ede, managing director, in his annual report and chairman Mr Laurie Willis, at a speech to the annual general meeting of the company in Auckland, expressed confidence in the future prospects and profitability of the mill at Karioi. The mill reduced its financial loss of over $11 million in the 1982-83 financial year to $4,866,000 in the 1983-84 year. This corresponded with an 81.4% increase in pulp saies from $14.3 million in 1983 to $26 million in 1984.

However while the mill expected to make its first profit in the current 1984-85 year, a major concern was the cost of power. Since 1977 when the pulp mill project was first established at Karioi, power charges have increased by 300%. The supply of electricity to the Karioi Mill is a major item of expenditure in the production of pulp and even though some temporary relief was achieved following representations to government, it was now essential to achieve a permanent reduction, said Mr Ede in his report. Another significant factor in relation to the future earnings of the pulp and paper industry were the financial benefits derived from the export incentive schemes. Abandonment or continuance of these schemes after 1985 will have a major

influence on long-term planning and future investment in an industry which is heavily orientated towards export. The $7 million reduction in the loss between 1983 and 1984 is not attributable to the production and sale of the new bleached CTMP (chemi -thermo-mechanical pulp) process, according to the report, as the commissioning of this plant was delayed because of the late arrival of essential equipment from overseas and didn't take~place until the end of the financial year. Overseas production trials using the new material are now taking place in Japan and Australia and initial production orders have been received. "Dramatic changes" in the status and prospects of the Karioi Mill were due to other factors as well. "Following the senior management changes which

took place in late 1982, a major effort was undertaken aimed at reducing cos'ts, improving efficiency in all facets of the company's operations — including production, marketing and information — enhancing the value of the mill's output by broadening the product range and expanding the mill's capacity to 120,000 tonnes from $70,000 tonnes." This expansion of capacity is now in progress (see picture) and is expected to be completed in November for commissioning, as programmed, in January 1985 at which time it is expected that another 27 members of staff will be added to the workforce of over 100. For an industry that employs about one-third of the total workforce in the Waimarino, either as staff or for the supply of goods and services, the prospects appear brighter than they have for several years.