Paper mill cuts 84 jobs, blames Victorian government for lack of timber

Opal Australian Paper is cutting 84 jobs at its Maryvale mill in Gippsland, a decision the company attributes to the Victorian government's failure to ensure adequate timber supply. The mill, once Australia's sole producer of white paper, has been restructuring its operations since ceasing that production in early 2023 and laying off 156 workers.

The company stated that the latest job losses follow a "detailed review of operations" aimed at aligning the mill's reduced footprint as a kraft and recycled paper manufacturer with ongoing fixed cost reductions. Opal Australian Paper claims it has suffered "substantial losses" due to the Victorian government's alleged failure to meet contractual obligations under the Wood Pulp Agreement.

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The end of white paper production has significantly changed the operational footprint of the Mill, and the site has been working to right-size its operations as a kraft and recycled paper manufacturer. This has included ongoing fixed cost reductions to align with its reduced footprint.

The Latrobe Valley, where the Maryvale mill is located, has a long history of high unemployment. This has been compounded by economic shifts, including the privatization of the state's coal-fired power industry in the 1990s and the closure of the Hazelwood power station in 2017, which resulted in the loss of 900 jobs. The Victorian government has been contacted for comment regarding the timber supply issues.

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The company said it suffered "substantial losses due to the Victorian Government's failure to meet its contractual obligations under the Wood Pulp Agreement".