Australia’s largest toilet paper manufacturer, Sorbent, has called for staff to nominate for voluntary redundancies in preparation for the closure and offshoring of some operations at its Box Hill plant in Victoria.
Solaris, the sister company of Sorbent, will continue to operate its Greystanes facility in New South Wales.
IndustryEdge reports hand towel and facial tissue production is likely out-sourced in what the company with toilet paper production expected to remain at Box Hill.
Wood Central understands Sorbent will shift part of its operations to Indonesia, with Steve Nicholson telling 3AW’s Tom Elliott the company’s gas bill had surged by almost 300 per cent this calendar year.
Up to 70 workers will lose their jobs, with Mr Nicholson saying that the federal government did not seem to care and was only worried about the appearance of promoting renewables.
In December, the AFR reported that the manufacturer’s gas bill had jumped 290.7 per cent across 2022.
In late 2022, the Albanese government introduced an energy plan that pushed to cap the gas price at $12 a gigajoule.
But according to Mr Nicolson, Sorbent feared that the east coast market did not have enough gas to sustain the manufacturing sector for 2023 reliably.
At the time, Mr Nicholson said the “close and complex relationship between gas and electricity” – whereby the high price of coal-fired electricity led to greater demand for gas-fired power – had upset regular supply for manufacturers such as Sorbent, which used gas in its processes.
Sorbent will embrace a ‘hybrid business model’
Yesterday, Australian Manufacturing reported Sorbent will transition to a ‘hybrid business model.’
The business model could involve importing Livi, Sorbent, Sorbent Professional, Handle napkins, and facial tissues.
Sorbent reports that it will combine benefits from local manufacturing with the advantages of international competitiveness.
Australia’s tissue production will fall to 65% of consumption
Australia imports Toilet Paper primarily from China ($267M), New Zealand ($45.1M), Germany ($38.2M), Indonesia ($35.3M), and South Korea ($34.1M), with the fastest-growing import markets in New Zealand ($18.8M), China ($8.71M), and Netherlands ($8.01M).
According to IndustryEdge, the decision will lead to Australian tissue production capacity falling to 65% of consumption.
Unlike paper-based alternatives like bamboo, Sorbent and its sister company, US-based Solaris, carry PEFC certification – ensuring that the tree-based plantations are managed to environmental best practices.
Sorbent will now negotiate with unions over restructuring
Australian Manufacturing reports that Solaris will now confer with the CFMEU Manufacturing Division over the impact, which will include:
- Shutting down the Box Hill PM3 and CW114 machines will ease operation from 1 October 2023.
- The Box Hill Napkin 20 machine will relocate overseas in November 2023, with 22 machines to relocate in Q1 2024.
- The Box Hill Facial F310 machine will relocate in Q1, 2024.
- And the Greystanes, Sydney Facial Line will relocate in Q4, 2023.
On Thursday, Sorbent told its employees: “While some of our operations will shift, we remain committed to local manufacturing and investment in new assets.”
“All other assets across Box Hill and Greystanes, including Box Hill’s PM4 TAD technology, CW117/Cw118 and Greystanes UTT and Future converting lines, will continue to operate.”
The PM4 TAD technology is involved in tissue making, while Universal Tissue Technology (UTT) is an Italian company in the tissue industry.
The closures will be partially offset by purchasing and installing a new Converting 2.8m wide winder at Box Hill to be commissioned in 2025.
In a memo published on its Facebook page, the company told staff, “As many of you are aware, our business has long been committed to local manufacturing and investing in state-of-the-art equipment.”
“…However, considering the changing dynamics of our industry, and some outside of our control, we have determined that a hybrid business model is necessary for us to be a sustainably profitable business.”
Sorbent said that further information would be provided shortly.
“Please be assured that we will support those affected by these changes and work with the union to assist in this transition with our EAP provider, outplacement services and financial advice.”