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Tasman mill's future uncertain

By Nicholas Bryant

Friday 17th November 2000

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There are fresh rumours in financial circles that Norwegian paper giant Norske Skog will sell the Tasman pulp mill, following its announcement it wants to sell a mill in Canada.

The same rumours are tipping Carter Holt Harvey to buy it.

Norske Skog gained the mill, which employs about 350 people, after buying Fletcher Paper for $2.5 billion in April, the first and only clean part of Fletcher's messy targeted letter stock separation.

At that time Fletcher insiders said Tasman was at risk of being sold as it fell near the boundary of Norske Skog's core business of making high-grade paper.

The rumours have resurfaced on the back of Norske Skog's announcement it wants to sell its Mackenzie pulp mill in northern British Columbia. It said it was a standalone facility that might better fit an owner where pulp was its core business.

Norske Skog has also doubled a planned cutback in pulp production from its other mills in British Columbia, apparently as buyers work down inventories.

It is cutting fourth-quarter production by 50,000 tonnes, despite saying three weeks ago production would be cut by 25,000 tonnes.

Norske Skog gained another two paper mills when it bought 50.8% of Fletcher Challenge Canada in the Fletcher Paper purchase.

It has said neither mill is for sale. Attempts to contact Norske Skog's senior vice-president of Asian activities, Vidar Lerstad, were unsuccessful.

Local analysts said the trend for Norske Skog was not to be in pulp assets while the trend for Carter Holt was to be an acquirer of assets.

Carter Holt was giving no clues as to future moves but it is still cash rich after its Copec settlement. It went 4c a share ex-dividend today after posting its best net earnings in five years last month, $176 million for the six months to September 30.

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