About half an hour north of Hobart, the Boyer mill is unmissable on the banks of Tasmania’s River Derwent.
- The Boyer paper mill has seen a major drop in sales because of a decline in advertising during the coronavirus pandemic
- Staff at Boyer have been stood down for two weeks on JobKeeper
- There are fears glossy magazine closures could have an indirect impact on the Boyer mill
The vast industrial site, owned by Norwegian company Norske Skog, is the only manufacturer of newsprint and magazine-grade paper in Australia, able to produce hundreds of tonnes of paper each year.
“If somebody picks up their Mercury or their Sydney Morning Herald or their Financial Review, they’ll be reading paper that’s made by us,” Norske Skog regional president Eric Luck said.
It is no secret that the newspaper industry, and therefore the newsprint industry, is in systemic decline.
Seeing newspapers becoming thinner and fewer, in 2014 Norske Skog converted one of its machines to produce a lightweight coated paper — the kind used for supermarket catalogues and advertising inserts.
But now the business is being squeezed on both sides.
The lightweight coated paper that the Boyer mill produces is used for advertising and promotions with the expectation that people will be out buying things.
Lockdowns and job losses have given big businesses little reason to advertise to people who aren’t spending.
“[With] newsprint, obviously the publishers also rely on advertising … so again if the retailers aren’t advertising then they need to cut back their costs and the purchasing of newsprint to print on is a significant cost, so they’ll pull that back as well.
“We get the double whammy — we’re squeezed on both sides.”
Workers on part-time JobKeeper, worried about long-term future
Workers at the Boyer mill have spent the past few months taking annual leave and long service leave, but that only lasts so long.
The mill has had to stand its workers down on JobKeeper for two weeks over July and August.
Shane Jones is one of 265 staff at Boyer paper mill. He has worked there for 22 years.
“I’m actually third generation,” he said.
“My grandfather worked here at number one [machine], and my father worked here at the wood mill.”
Mr Jones is a finishing operator, working on the machine that was converted to produce catalogue paper.
“It’s worrying times for everybody.”
His colleague Tony Hodge is a machine tender, working at Boyer for the past 35 years.
“The mood’s been pretty good, but everyone’s a bit up in the air, a bit anxious about what could happen long-term with the mill,” Mr Hodge said.
Hopes pandemic has created appetite for local supplies
Although the Boyer mill is the only domestic producer of newsprint and lightweight coated paper, it does not have 100 per cent of the Australian market — it competes with imports from Europe and Canada.
Ross Hampton from the Australian Forest Products Association said the pandemic and its associated freight and supply issues for other products, such as face masks for hospital workers, had reinforced the importance of local manufacturing.
“There is an enormous understanding now that we need to be more self-reliant in Australia in things that we’ve taken for granted in the past,” Mr Hampton said.
“And Australians are now extremely acutely conscious that we are going to be in a real problem when it comes to jobs next year.”
Mr Hampton said while Australia could not always compete on price because of higher labour and energy costs than some other parts of the world, he hoped big corporates and purchasers would recognise the importance of regional jobs.
Potential for magazine closures to hit Norske Skog
While the Boyer mill does not produce thick, glossy magazine paper, it might still feel the effects of recent closures.
Popular magazines including Harper’s Bazaar, Men’s Health and Elle have been axed by Bauer Media Australia because of declines in advertising spending during the coronavirus pandemic.
Norske Skog regional president Eric Luck said there could be indirect impacts for the Boyer mill.
“Those glossy magazines, that’s all imported,” he said.
“So of course those producers overseas who are producing that paper are then going to look at, ‘Well, OK, what else can we do.’
“Anybody that loses a market share or demand is going to be looking at how they can recover that in some other way, so they’ll look to get into our product range and potentially produce that to compete with us.”
Ongoing declines likely to continue post-pandemic
Paper industry analyst Tim Woods said the only event that had affected mills and manufacturers in a comparable way was the global financial crisis a decade ago, when advertising expenditure and office activity declined.
“There was an initial bounce-back the year immediately after the global financial crisis,” Mr Woods said.
“But then that switch to digitisation that we’re all familiar with, and digital communications … has seen consumption of all these grades of printing and communication papers, newsprint included, decline continuously.”
Mr Woods, who is the managing director of Industry Edge, said something similar could happen after the pandemic.
“We’re just as likely to see that little uplift and then that be followed by a continuation of the declines that we’ve become quite familiar with,” he said.
He said the Boyer mill’s saving grace was that it was versatile.
“At some point that becomes really difficult for any business to continue to operate but you’d rather be in the flexible Boyer mill’s position than many other mills that can only make one product around the world.”
Paper mill important for valley
Workers at Boyer recently got the good news that they’d be working through September due to a bump in newsprint orders, rather than taking a planned week off on JobKeeper.
Tony Hodge is remaining optimistic.
“The paper machine has been a big employer for the Derwent Valley over the years and there’s still a lot of employees who live locally,” he said.
“So we do need it up and running, we need it to stay — not just for me, there’s plenty of young guys coming through too.
“But everyone’s binding together, and I think we’ll get through it.”