• Bushfire consequences: Virgin tree stocks which produce kraftliner take major hit
    Bushfire consequences: Virgin tree stocks which produce kraftliner take major hit
Close×

Australia's containerboard sector is facing an unprecedented crisis of fibre supply, with the ongoing bushfires wiping out huge swathes of trees used for local manufacture of kraftliner, which is used as the outer layers of high-strength corrugated boxes.

The plantation forests around the Visy mill in Tumut have been decimated, with as much as 40 per cent of the softwood trees impacted by the fires either destroyed, or needing to be salvaged. Recovery of pulpable wood from salvage operations is uncertain.

Industry insiders say the level of plantation destruction left in the wake of this summer's enormous bushfires is unparalleled.

So far the plantations serving the Australian Paper mill in the LaTrobe Valley – which supplies Kraftliner to Orora’s corrugated box plants – have escaped relatively unscathed, however the potential for further serious fires remains high.

The Visy mill is the country's largest manufacturer of containerboard materials. Reports suggest that production of Kraftliner has already been curtailed. Visy uses mainly virgin fibre for Kraftliner, and uses post-consumer paper and board to create its recycled containerboard grades at its Tumut mill. PKN understands that post-consumer paper and board is piling up at the Tumut mill.

Visy also uses the same fibre to manufacture a range of other industrial and packaging products, including pallet slip sheets.

The containerboard manufacturers (Visy, Orora and Australian Paper) are all major exporters. They may need to delve into this supply to meet local demand, and one industry source confirmed this was already occurring. Post-consumer waste recycling is already under intense pressure with the banning of waste of China and several other Asian nations meaning it cannot go offshore, and now has to be processed here.

Latest trade data indicates that nationally more than four million cubic metres of softwood logs were exported over the last year. The destruction of significant volumes of resource is already placing those exports under scrutiny. Maintaining production of high quality Kraftliner may require the curtailment of log exports to supply the Tumut mill and other facilities that rely on softwood logs and fibre.

Quoted in the Nine Media the Snowy Valleys Council mayor, James Hayes, says the fire destroyed timber plantations and that the will take 25 years to grow back, which means years of difficulty for the timber mill, the Visy paper mill and workers. “I don’t want to be alarmist but it could be dire,” he is reported as saying.

The seriousness of the situation was evident with deputy prime minister Michael McCormack touring the area, and saying the major industries in Tumut and Batlow faced years to fully recover as they had been destroyed by the fires.

Australian softwood plantations have seen little actual planting for the best part of two decades, as a combination of government inaction and the failure of some private plantation investment have dimmed interest. Industry leaders have been calling for increased investment in new plantations for much of the last decade. Despite some statements of support, practical responses have proven thin on the ground, to date.

Food & Drink Business

Nestle has recorded organic growth of 3.5 per cent for FY19, with CEO Mark Schneider expecting it to accelerate through 2021/22 to sustainable mid-single digit growth.

Former director of Bellamy's Australia Jan Cameron will face criminal charges following an investigation by the Australian Securities & Investments Commission (ASIC).

4 Pines Brewing Company will soon be putting its famous beer into bottles and cans on a new filling line, to be supplied by Foodmach, at its Brookvale facility.