Shares of paper maker PaperlinX were all but unchanged yesterday after the company confirmed that it will close its mill at Burnie in northern Tasmania.
The shares traded up half a cent at 75c after the company said the closure would be the last step in its exit from manufacturing in the state.
No date was revealed yesterday by the company.
But the decision marks PaperlinX’s move from producer and merchant to purely merchant.
"The closure of the remaining operations at the Burnie Mill is the final stage of PaperlinX’s exit from its Tasmanian paper manufacturing operations with the balance of operations already closed," the company said in the statement yesterday.
"On completion of this closure, PaperlinX will be solely a merchanting company, with businesses distributing paper, sign and display, graphics solutions and industrial packaging to a wide range of customers in Australia, New Zealand and Asia, Europe and North America.
"The overall total net cash cost of PaperlinX’s exit from Tasmania is still expected to be around A$(10-20) million, while PaperlinX is expected to include after tax significant items in its 2010 full year results of around A$(170) million including non-cash accounting items as a result of the closure, in line with previous guidance.
"A$(134) million of the total after tax significant items was already included in the first half results released in February 2010 and Tas. Paper results will be reported under “Discontinued Operations” for the 2010 financial year."
PaperlinX managing director, Tom Park, said it was "disappointing that we have not been able to find a sustainable outcome for the Burnie operations (but) we do believe that we have reached an outcome that is in the best interests of PaperlinX and its shareholders".
Mr Park said PaperlinX would "meet all of our obligations, as we have for all employees of Tas. Paper who have lost their jobs as a result of our exit".
Mr Park said the exit from Tasmania would cost the company less than it expected originally.
"We are now focused on completing our refinancing program, which is progressing well, and on ensuring that our competitive position is as robust as it can be in these uncertain economic times," he said.
