Latrobe urges support from state government and Opal Company timeline

1868 Melbourne’s first paper mill is established by Samuel Ramsden on the banks of the Yarra River at Southbank

1895 Australian Paper Mills Company formed, combining the mill at Southbank with others in Broadford and Geelong

1902 Botany Mill commences operation in Sydney with two paper machines

1926 Australian PaperManufacturers Limited(APM) commenced trading

1930 APM plants first pine seedlings for future pulp production

1937 Construction of Maryvale Mill begins in Morwell

1940 Maryvale No.1 paper machine begins production

1951 APM Forests is formed to establish plantations

1977 Maryvale No.4 paper machine begins production of liner board for cardboard boxes

1986 APM becomes Amcor Limited

1987 Maryvale celebrates 50 years of production

1999 Maryvale No.5 machine begins production of high performance office paper

2009 Nippon Paper Group purchases Australian Paper from PaperlinX

2013 B9 paper machine begins operating at Botany Mill

2015 Maryvale $90 million wastepaper recycling and de-inking facility begins production

2020 Nippon Paper Industries launches Opal

LATROBE City Council has called on the Federal and state governments, along with Opal,tosupport aconsidered transition for the region after the announcement of the end of white paperproduction at Maryvale Mill.

Council said in astatement that it continues to stand by our community following the news that white paper operations at the mill will cease due to lack of wood supply.

Job impacts are still to be realised as the mill’s focus will shift towards manufacturing cardboard fibre packaging.

The mill has been acornerstone of Latrobe City’s economic landscape for more than 85 years, with reduced operating capacity expected to be felt far and wide.

"For every job at Maryvale Mill there is aflow on externally of another job in their supply chain. Without support it is expected therewill be a significant impact to workers, theirfamiliesand the wider localbusiness community," the council said "Opal workers are askilled workforce that offer transferrable skills to other industries. Structural Adjustment Packages are now required, these could provide local workers with vital support including training and job opportunities for industry transformation."

The councilcalled on the state governmentto fast-track their commitment to establishing the State Electricity Commission in Morwell and associated renewable energy projects to allow for atimelytransition.

Latrobe City Mayor, KellieO’Callaghan, acknowledged that this news created further uncertainty for the local community.

“While our community has been aware of impending closures and changes to local industry,the uncertainty that these job lossesatthe mill places afurther need for urgent support,” the Mayor said.

“Latrobe City has been built on abackbone of strong industry and manufacturing and we understand the direct and indirect impacts these changes have on our community.

“While this work has been continuing for some time through our transformation, council is committed to advocating on behalf of our people, amplifying our community’s voice to all levels of government seeking their support.

“We lookforwardtolearning more from the state government about their recently announced support package and how this will assist workers. Council would like to thank them for their initial support during this time.” for Maryvale began in 1938whenpulp production was about 90 tonnes per day or 31,000 tonnes per year and pilot paper production began.

Over 85 years, Maryvale’s pulp production grew to about 600,000 tonnes per year. In 1937-38 the Forests Commissionsupplied Maryvale with 1662 cunits (or 166,200 cubic feet) equivalent to 4706 m3 of Eucalypt pulpwood, along with input from many other sources, including settlers.

In 1939, one of Victoria’s worst bushfires burnt most of the Ash forest resource that was to supply the pulpwood for the new mill at Maryvale.

Australian Paper ManufacturesLtd,commonly known as APM, had astrongresearch capability and tests showed that pulp could successfully be made from salvaged fire-killed Ash and mixed species Eucalypts from the foothills.

Large quantities of fire-killed Ash were pulped at Maryvale through the 1940s and early 1950s. Irecall the odd loaddeliveredin1972whenI joined APM’s wholly ownedforest subsidiary called APM Forests (later renamed Australian Paper Plantations).

Maryvale input was about 28,000 m3 in 1939.

Over the 85 years Maryvale’s log inputhas grown to over 1.5 million cubic metres per year with about half Eucalypt and half pine pulpwood.

M1 papermachine began operation in 1940. M1 wasfollowedlaterbyM2and M3 paper machines and M3 was later convertedtoproduce white papers.

In 1987M4machinewas built for the production of liner board for cardboard boxes and in the 1990s M5 was built for the production of white papers including the iconic Reflex copy paper.

In 1985 anew 160,000 tonne per year continuous digester pine kraft mill was commissioned and fed with the thinnings and lower grade clear-fall logs from the maturing pine plantations previously established by APM Forests and the Forests Commission on farmland that was marginal for farming.

In 1986, APM was renamed Amcor, who decided to focus on packaging. In the 1990s Amcor sold its Morwell sawmilling business called Brown and Dureauand in 2000, spun off intoanew company called Paperlinx, itspapermaking (Australian Paper) and forestry business (Australian Paper

Plantations known as AP Plantations) in the region. Paperlinx sold Australian Paper Plantations to HancockVictorian Plantationsin2001and sold its pulp and papermanufacturingincludingMaryvale to Nippon Paper in 2009.

Paperlinx then ‘burnt’ the proceeds on its failed attempt to become an international paper merchant (old world business).

The demerging of the forests, sawmill and pulp/ paper operations intoseparate ownership substantially reduced economies of scope, synergies and wood quality benefits previously generated by the three operations under common Amcor ownership. Thisaspect of the divestments contributed to the eventual closure of the softwood sawmill at Morwell and increasedpulpingcosts at Maryvale.

In 2007, Paperlinx invested about $203 million in upgrading bleached eucalyptpulpproduction by 90,000 tonnes per year, requiringplantation supply to be augmented by ongoing native Eucalypt supply under along term supply agreement with the Victorian government; recent events suggest sovereign risk under government contracts has morphed from low risk to as risky as junk bonds.

In 2015 Nippon then invested about $90 million in awaste paper recycling plant to annually convert 80,000 tonnes of recovered fibre into 50,000 tonnes of deinkedpulp. Australian Paper waslater renamed Ópal.

AustralianPaper Maryvale looks like it now has to abandon two investments totalling about $300 million, pluspossiblymuch of the investment in M5, along with investment in supporting infrastructure and the training of around220 experienced operators.

The loss of 220 jobs at the mill, coupled with job losses by harvesting and maintenance contractors, could not come at aworse time for the Latrobe Valley, where unemployment is the highest and population growth rate the lowest of comparable Victorian regions.

The government’s transitional assistance, following the closure of Morwell and Hazelwood mines and power generation, has failed. The Latrobe Valleyisalready disadvantaged by areckless rather than well-planned transition to renewables based on more imported components rather than assistinglocal manufacture; afailed forestry plan that has delivered a50,000 ha decline in plantation area over the past fiveyears, and a‘Safer Together’ bushfire policy that is likely to deliver ‘Scorched Together’, unless someoneinSpring Street wakes up to the fact that the government’s 70% residual riskbushfire target is only achievedwith considerable wildfire, and 70 per centresidual risk roughly equates to only ‘30 per cent safe’.

Uncertainty looms: OpalAustralian Paperhas announced it willend whitepaper production.

Another drought yearlike 1898, 1926, 1944, 1968 and 1983 and the plantation resource that is now Maryvale’smainstay is threatened with substantial fire losses. These drought years were worse than 1939 when the 1939 bushfire almost reached Maryvale.

Photo: File

Maryvale's sustainable future requires effective government support to protect and enhance its supply chain.

References: Annual reports of Forests Commission of Victoria, annualreports and announcementsof APMand successors Amcor and Paperlinx and R McCarthy (2019 and updated 2021) APM Forests -Timeline.

John Cameron (Dip Hort Burnley and MBA Monash)isaTraralgon businessconsultant who previously worked at APM Forests, Amcor and AP Plantations.