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CHH mothballs loss-making paper mill

By Phil Boeyen, ShareChat Business News Editor

Wednesday 12th July 2000

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Carter Holt Harvey says external factors are behind the decision to mothball its loss-making Southland paper mill.

The company will stop production at the Mataura operation in August.

CHH says despite investing $4 million dollars to refocus the mill on the specialty end of the paper market, it has continued to operate at a loss.

It describes the decision to stand down the mill as regrettable but necessary, and says the team at Mataura have worked hard to return the operation to profitability.

But external factors such as recent hikes in pulp prices, changing consumer preferences, flat paper prices and increased competition have aggravated the situation

The company says it is therefore unfeasible to continue production at Mataura until market conditions significantly improve, and that is not expected to happen any time soon.

The Mataura mill has been making a loss for the past four years.

CHH's major shareholder, International Paper, announced mid-week that Carter's sales in the quarter to the end of June had risen to US$460 million, a jump of more than 10% on the previous quarter.

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