Latrobe Valley Express, 20 March 2024

About 40 salaried jobs at the Maryvale Mill will be gone by June as Opal moves to slash further positions across the company in a bid to stabilise its financial performance.

The 40 are believed to be among about 220 salaried company-wide employees who will be made redundant, adding to the more than 300 workers who lost their jobs when Maryvale’s white paper production plant was closed late last year. Maryvale previously employed more than 800 people. Opal as a whole employs about 4000 people in Australia, New Zealand and around the world.

Opal’s chief executive, Chris Nagaura, said Opal was formed in 2020 to realise Nippon Paper’s long-term vision to create a fully integrated packaging business in Australia and New Zealand. The expectation was that Opal would be profitable from day one.

“Unfortunately, a series of unplanned challenges including Covid, rising energy costs, market disruptions and the end of white paper at the Maryvale Mill are continuing to severely impact Opal’s financial performance,” he said.

“Compounding this, unnecessary complexity and inefficiency exists across Opal. Consequently, our operating costs remain higher than they need to be.

The current situation is not commercially sustainable and must be immediately addressed.”

Mr Nagaura said the Opal executive leadership team had been developing an organisational wide program to improve the company’s performance.

“A raft of initiatives are currently underway to reduce costs across the business. As part of this review, the decision has been made that in the short term, approximately 220 of our salaried positions will be made redundant,” he said.

People leaders would consult with impacted team members immediately on the required changes.

“These changes are expected to be implemented by June 2024.”

Mr Nagaura said the redundancy and restructuring decisions had been very difficult and had not been taken lightly.

“It is essential that we achieve a quick and definitive re-set of our operating costs to help return Opal to financial sustainability,” he said.

“These are unsettling times for everyone across the Opal business and the health, safety and welfare of all team members remains our key priority.”

An Opal spokeswoman emphasised the financial impact of rising energy costs and global supply chain disruptions.

“As a result of these challenges, Opal is reviewing its organisation structure across salaried roles. The review will identify opportunities to improve operational efficiency across the business,” she said.

“There will be no impact on Opal’s customers from these changes. Opal is committed to fully supporting our valued team members as we work through this transition.”

Mr Nagaura said affected employees should reach out to their People Leader or HR representative if they needed extra support to work through these changes. “Opal’s Employee Assistance Program (EAP) is also available to provide free and confidential assistance to team members and their immediate families. The Employee Assistance Program can be accessed through Quick Links on our Opal SharePoint homepage,” he said.

The announcements came as Opal continues its major shutdown at Maryvale to transition from white paper production to packaging. Major shutdowns occur at Maryvale and Opal’s Botany mill each year for a combined total of more than $26 million that involves up to 1500 workers on site.

However, Maryvale is now being reconfigured from tree pulp plants to two pulp plants after EPA Victoria approved the process in January. The Continuous Kraft Pulp Mill (CKM) is being converted from eucalypt to pine as a key element for the mill transition to 100 per cent brown packaging. The CKM will take over the production of pine pulp from the Batch Mill, which in turn will be de-commissioned. Opal says the CKM’s pulping technology will improve product quality, process stability and efficiency.

“The conversion will also reduce environmental impacts including water and energy usage as well as odour sources,” the spokeswoman said.

Opal will mainly use pine pulp, combined with some hardwood pulp, to produce the brown packaging. The hardwood, previously sourced from native hardwood residues, comes from HVP Plantations. HVP is the only supplier of eucalypt wood to the Maryvale site and is key strategic long-term wood supply partner for the ill into the future.

Now, the HVP pulp wood is processed through the Neutral Sulphate Semi Chemical (NSSC) pulp mill.

“The mill doesn’t require additional eucalypt volumes to operate the NSSC Mill,” the spokeswoman said.

Previously, the state government had an agreement to supply Australian Paper with 350,000 cubic metres of hardwood pulp annually from 2010-11 to 2029-30. Due to bushfires, third-party court challenges from environmentalists and political decisions, this was reduced to about 50,000 m3 before the industry closure on January 1.