Wednesday, January 1, 2014

Newspapers stick with Norske

AUSTRALIA'S major newspaper publishers have signed new long-term agreements with papermaker Norske Skog for the supply of newsprint and improved-grade paper. News Corp and Fairfax Media both had supply agreements with Norske Skog that were due to expire in June 2015 and these have been replaced by new agreements that run until the middle of 2020.

Norske Skog has a long history of supplying both News and Fairfax with the majority of their newsprint and improved-grade paper under long term contractual arrangements. "This is a very important agreement for the Norske Skog group and we are happy for this confirmation of our position as the preferred supplier of newsprint and improved grades to the most influential media players in Australasia," Norske Skog CEO
Sven Ombudstvedt said. "These agreements gives us the opportunity to co-operate closely with these customers; and thus, intensify the effort to reduce costs in the value chain."

The combined estimated value of the new agreements over their full term is approximately $1.7 billion. "Norske Skog has worked separately with both News and Fairfax during 2013 to develop mutually beneficial agreements that secures Norske Skog's business with News and Fairfax beyond 2015," Norske Skog Australasia regional president Andrew Leighton said.

News Corp and Fairfax Media are Norske Skog's largest customers in Australasia. In 2013 they  represented about 70% of the newsprint and improved-grade market in Australasia. Norske Skog has three mills in Australasia (Boyer, Albury and Tasman), with a total production capacity of 700,000 tonnes. The new agreements amount to a significant share of the mills' annual production capacity.

Norske Skog's paper mill at Boyer was built by Australia's major newspaper companies and has been producing paper since 1941. Originally called Australian Newsprint Mills, the business changed hands several times before being acquired by Norske Skog. This history is reflected in many street names at New Norfolk, most notably Murdoch Avenue and Fairfax Terrace.

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