Sale of Norske Skog mill assets expected by year's end.
Norske Skog is expecting to conclude the sale of its mill assets at Kawerau in the second half of this year after confirming production will end by June 30.
The paper mill has been making newsprint at the site since 1955.
In a statement, Norske Skog said the closure was forced by the decline of printed newspapers in New Zealand.
Chief executive Sven Ombudstvedt said ceasing production at Kawerau “will address the substantial imbalance between newsprint production capacity and customer demand in the Australasian region.
“The Tasman mill has been an important contributor to the regional economy in New Zealand for the past 66 years, producing more than 15 million tonnes of publication paper over its lifetime.
"I would like to thank everyone who has worked at the mill for their outstanding contribution throughout the years, and their significant efforts to ensure a long and good life for the mill.”
Paper for New Zealand’s continuing newspapers and magazines will be supplied by Norske Skog’s Boyer mill in Tasmania.
About 160 staff at Kawerau will lose their jobs as a result of the plant’s closure.
Financial statements filed to the Companies Office show mill owner Norske Skog Tasman reported a net profit of $3.6 million for the year to December from revenue of $111m.
Net assets at balance date were $31.6m.
Norske Skog said the group would recognise restructuring costs of about $40m, mainly in redundancy and site closure costs and an additional loss of $15m on energy contracts.
The sale of mill assets was expected to produce gross proceeds of about $60m.
The company’s Nature’s Flame wood pellet business will continue to operate.
