If you want to understand something about the future of newspapers in Australia and New Zealand, you need to go to the source: the paper itself.
In April 2014, the Federal Government’s Anti-Dumping Commission announced it would investigate the alleged dumping of newsprint exported to Australia from Korea and France. Norwegian multi-national Norske Skog, who owns the three remaining newsprint mills in Australia and New Zealand, complained that ‘dumped’ newsprint had caused ‘material injury’ to Australian industry. Prices were down, sales were down, profits had fallen.
Those of us who still read printed newspapers will be aware that imports may be one of many reasons that the newsprint manufacturer is feeling the pinch. You can touch Norske Skog’s problem. You can see it. The pile of newspapers sold in newsagents is shrinking and individual papers are shrinking too.
Yet when I interviewed Norske Skog executives in early 2013, they denied that Fairfax’s plans to turn its broadsheets into compacts would have much of an impact on business. There was still a future for newsprint and for newspapers.
The public record for the commission’s inquiry tells a different story, one that affirms but also challenges what the executives told me 18 months ago.
In its submission, rival global newsprint giant Bowater Korea states the obvious: ‘The single most important factor impacting Norkse Skog’s viability is the global decline in demand for newsprint, which is beyond Norske Skog (and the Commission’s) control.’
The submission noted that in 2013 Norske Skog had extended its contracts with News Limited and Fairfax beyond 2015 until the end of 2020. It is difficult to imagine the weekday Age or the broadsheet Australian staggering on as printed papers six years from now but both publishers appear committed to putting some ink on paper for at least another five years.
Norske Skog’s complaints of a surge in imported newsprint referred to contracts West Australian Newspapers had negotiated with newsprint suppliers in Korea and France, Bowater’s submission said. Likewise, Australian Provincial Newspapers (APN) had also switched from Australian or New Zealand-made newsprint to imported stuff.
An appendix to this submission is the Pulp and Paper Products Council’s Supply and Demand Newsprint report (April 2014). Perhaps there are other newspaper nerds out there who will find this report as fascinating as I did.
Between 1995 and 2013, the demand for newsprint rose in Algeria, Egypt, Ghana, Kenya, Morocco, Nigeria, South Africa, Tanzania, China, India, Bangladesh, Hong Kong, Indonesia, Iran, Malaysia, Pakistan, Singapore, Sri Lanka, Turkey, United Arab Emirates and Vietnam.
But demand plummeted elsewhere, including ‘Oceania’ – Australia, New Zealand and Pacific nations. In our part of the world demand fell from 648,000 metres in 2008 to 387,000 metres in 2013.
As with the unfolding collapse in printing, the consequences of the collapse in demand for paper are yet to be fully appreciated.
Paper-making uses huge amounts of power and water. In late 2012, Norske Skog’s mill in New Zealand was churning through as much power as 20,000 households. It was the country’s second biggest power consumer (after the aluminium smelter at Tiwai). What impact is the collapse in the manufacturing of newsprint and other types of paper going to have on power prices? How might it be linked with the current over-supply of power in Australia?
Then there are the jobs.
In early 2013, Norske Skog shut a paper machine at its mill in Kawerau in the central North Island of New Zealand, a move that cost 110 jobs in a tiny community. One machine remains and no one is talking about even a medium-term future for newsprint manufacturing up there.
In Australia, Norske Skog makes newsprint at mills in Albury and Boyer, in Tasmania. It has one newsprint machine left at each site. A second newsprint machine at Boyer has been converted into one that makes lightweight coated paper (the sort of paper used in advertising catalogues and some magazines). The $85 million conversion was funded by Norske Skog and state and federal government grants. Until this machine opened, Australia imported most of its coated paper from Japan.
In the 1980s, 1500 people worked at the Boyer mill. There are 270 left there and 185 at Albury yet each mill supports thousands of other jobs in forestry, transport and more.
About 1000 people work at the Australian Paper mill in Maryvale, Gippsland (manufacturers of office paper rather than newsprint). The mill is the region’s biggest private sector employer but the company and Construction Forestry Mining and Energy Union (CFMEU) have argued it is threatened by cheap imports.
Last month, the Anti-Dumping Commission terminated its inquiry into the alleged dumping of copy paper exported from China, finding that any dumping was ‘negligible’.
The commission is still investigating newsprint. What they call a Statement of Essential Facts will be published on its website by the end of October. After further public submissions, a final recommendation will go to Bob Baldwin, the Parliamentary Secretary for the Industry Minister before mid-December.
How will they read the paper?