Pulp fiction

The State Government and the Liberal opposition have united in their bid to continue the madness of Tasmania's pulped future. Both parties have linked arms in a show of unity against the reversal of what can only be described as an evil piece of legislation, the Pulp Mill Assessment Act (PMAA) and its infamous section eleven. The act denies the democratic rights of businesses and individuals alike, to seek damages compensation against the pulp mill and any contractor and for any part of the process from forest to mill and beyond. The Tasmanian people are angry and with good cause.

The claims of a jobless future for Tasmania without the pulp mill and an economic disaster for the state, should this legislation be revoked, pose a narrative question. When viewed in context with the world's pulp and paper industry it leaves one a little perplexed as to what all the commotion is about. According to the Pulp and Paper Products Council, there is a global downturn in pulp consumption of 15.5% this year. It also looks as though the paper manufacturers have forced a ceiling in the creeping monthly price increases the industry has had to face. Inventories have increased to a higher than usual position and the resolve to force containment of prices in the future is clear. The paper industry has had enough and, like the Tasmanian people, it is fighting back.

China, now Australia's major trading partner and the country's biggest consumer of wood chips (since the Japanese tsunami) is down on consumption by as much as 31.1%. Coupled with power shortages from unusually high 40-degree temperatures and a need to conserve energy, the paper industry, at least for Zhejiang province in the east, has been forced to shut down the Cartonboard mills for weeks at a time.

DuPont has announced a US$500 per ton increase in the price of titanium dioxide, adding more pressure to the paper maker's bottom line.

The Russian-based Llim Group, has announced it will leave its prices stable at US$720 per ton for Bleached Hardwood Craft (BHK) for the Chinese market, obviously realising the forced downturn could have impacts globally on profits and therefore supply. It might help to add at this point that Russia has timber supplies about twice the size of the European landmass, making Tasmania's efforts pale into insignificance.

It all paints a gloomy picture for anybody considering entering the pulp market and yet Tasmania sees this move as the saving grace for its economy and yes, the news gets worse. The EU has decided to put anti-dumping duties of up to 35.1% on Chinese paper makers, wishing to dump product on that market and adding to China's woes.

According to RISI, the leading information provider for the global forest products industry, Chilean producer Arauco and Canada's Canfor reported flat prices to Chinese customers. China's Shengda Packaging has shown a 10.7% fall in gross profits from this time a year ago.

The final blow is sustainability (that buzzword used in Tasmania to describe anything that isn't). China has been put under extreme pressure by EUROPEN to ensure packaging, China's major use for woodchips, meets sustainability requirements and that means using less layers and dealing with recycling issues as well as certifying where the woodchips come from.

Meanwhile, both the major parties in Tasmania battle objections from the Greens and all environmental groups in order to secure Tasmania's future as a pulp producer, regardless of whether it is a sound business model or not. It is as though they are saying "we don't care whether it is profitable, we want a pulp mill".

Like children with a letter to Santa, the politicians sit bright eyed and cheery-faced, awaiting the sound of sleighbells. The bell that is ringing loudly however is more reminiscent of the Lloyds bell in London and one wonders when the politicians will finally realise the pulp ship is sinking and scramble for anything that floats.

Any screenwriter would love a theme like this, because it is larger than life and quite fascinating to watch. The narrative questions are there and the characters are well defined. The only problem is that the ending is so predictable; it would only be suitable for an extremely credulous audience.