Norske Skog to expand its Coated Paper productionFriday 19 Apr 2013 Norske Skog, the Norwegian papermaker that hasn’t made a profit in eight years, is betting on an expansion in coated paper used for catalogues and inserts to counter a slump in newsprint and magazine demand.The company is converting one of its paper machines at the Boyer mill in Australia to coated paper and is also investing to expand the product range at its Saugbrugs mill in Norway in a move that could see coated paper account for as much as 25 percent of sales in the future, Norske Skog Chief Executive Officer Sven Ombudstvedt said in a phone interview on 22 March. Global newsprint demand is falling by between 2 percent and 3 percent annually while magazine demand slumped 6 percent last year as people increasingly read news on computers and smartphones. That has prompted papermakers to shut mills to try to restore a supply and demand balance as well as shifting their focus to other products. Norske Skog has annual newsprint capacity of 2.3 million tons and 1.3 million tons of magazine paper, a ratio that will change as it expands in coated paper. “Today, it’s relatively small,” Ombudstvedt said, referring to the company’s capacity for producing coated paper used in catalogues and magazine and newspaper inserts. “In a few years’ time, it may be up to a quarter of the top-line.” The company’s newsprint production is seen falling to just below 50 percent of its total output “in a few years,” said Ombudstvedt, adding that Norske Skog has kept the shift largely to itself as the transformation will “take some time.” |
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