Amcor takes over APPM mills

Issue 

By Dave Wright

HOBART — APPM's Burnie and Wesley Vale paper mills will be sold to the giant multinational Amcor Ltd. The deal, worth $415 million, guarantees Amcor — owners of APPM's domestic rival APM — a monopoly of the fine paper market in Australia.

The deal also includes APPM's pulp and paper mill at Shoalhaven in NSW; paper merchants the Paper House, Dalton Fine Paper and Tomasetti; and APPM's envelope business in Sydney and Melbourne.

APPM's parent company, North Broken Hill-Peko, will retain its forestry and export woodchip operations in Tasmania. APPM will continue to supply wood to the Burnie and Wesley Vale mills.

APM is Australia's largest private forest plantation owner, with over 85,000 hectares of freehold and leasehold land. It appears that it will be granted APPM's environmental licences and forest concessions.

The sale is no surprise as both companies streamline operations. APPM has been reducing labour costs, but not at a fast enough pace for its liking. The dispute at the Burnie mill last year was an example of this. At the same time, it has reinvested little in upgrading equipment, which has left it running well behind overseas competitors.

The sale gives APM well over 50% of the domestic market. It is competing with importers from Indonesia, Brazil, South Korea, the US and South Africa. Imports have steadily eaten into the APM and APPM market share. Imports of white paper in the last 10 years have risen from 20% to 55% of the market, and imports of copy paper in the last three years from 17% to 40%. Indonesia produces about 1 million tonnes of fine paper per year and is rapidly expanding its capacity.

To June 1993, Amcor announced a net profit of $267 million from its worldwide operations. Its Australian operation, however, needs to capture more of the market. Amcor has stated that it will rationalise its paper production and cut jobs.

Amcor Paper managing director Don Macfarlane said, "I'd be very surprised if there were more working in five years time than at present, because we have to become more competitive. To do that we have to become more productive. While there may be fewer people [workers], there may be more tonnes of paper made."

This brings little joy to the 2500 Tasmanian workers employed by the company. Macfarlane added that the Australian market was too small for two competitors.

Official figures put Tasmania's present unemployment rate at 13.4%, and well over 40% for young people.

ACTU president Martin Ferguson responded positively to the takeover by Amcor. He said, "Amcor has a good reputation for its reasonable approach to industrial relations. I do believe that now APPM has vacated this part of the paper industry, we can expect the bitterness of the industrial battles in Burnie will hopefully disappear."

This seal of approval from Ferguson would indicate that mill workers at Burnie and Wesley Vale will get little support from the ACTU in defending their jobs in the coming period.

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