Paper cartel melts away under Rogernomics

Press, 26 January 1988, Page 25

Paper cartel melts away under Rogernomics

NEILL BIRSS

By

The thousands of tonnes of paper that cross New Zealand desks each year look brighter under Rogernomics.

Ever finer and brighter papers are coming into New Zealand since the dismantling of the cartel that controlled paper sales for decades.

In the depths of import licensing, printers sometimes could not set up in business because merchants controlled paper supplies. The merchants argued that supply did not meed demand, and existing firms must be serviced first. Sometimes the cartel’s restrictions seemed to go beyond rationing. As recently as 1970 a merchant required a Christchurch man trying to set up in business as a printer to provide written approval from a former employer.

The cartel worked for the general good during the war, when papers were imported from Canada, and when floods or strikes affected New Zealand production.

The tight controls on fine paper in the past were caused by N.Z. Forest Products and import licensing, Mr Neil Byers, managing director of Wiggins Teape New Zealand, Ltd, said in Wellington recently. He was speaking at the opening of a display in the National Library foyer of 1988 calendars from Zanders, of West Germany, featuring holograms. New Zealand consumes about half a million tonnes of paper and paper-board products a year. About 80 per cent of this comprises newsprint, hygiene tissue, and packaging material. The other 20 per cent, or about 100,000 tonnes, is in fine paper. About 35,000 tonnes is of glossy coated paper for magazine publishing. Another 45,000 tonnes is New Zealand made uncoated' paper used in photocopiers (about 11,000 tonnes a year), envelopes, computers and offset printing. The other sector' is specialty paper, including self-copying and ther-

mal paper. New Zealand consumes 10,000 to 20,000 tonnes of specialty paper a year. NZFP has cast a shadow over the finepaper market for decades. Originally, it planned to distribute solely through its subsidiary, B. J. Ball, but eventually a group of merchants distributed the New Zealand product. Until recently, NZFP had a virtual, monopoly for the papers it manufactured, such as photocopier grade. Merchants ■ were able to import higher-quality papers, but for many years only under tight limits. Deregulation has taken New Zealand from “an orderly marketing situation to one of complete chaos,” Mr Byers says. Imports have made NZFP look much closer at efficiency, and some new distributors, general importers, have penetrated the market. But there still has been little competition in the high-growth photo-copier paper market.

Over-all demand for fine paper continues to grow, debunking predictions that computers would bring in paperless offices, and that plastic cards would replace cheques. The chequepaper market in New Zealand still shows consistent if unspectacular growth. About 1600 tonnes of paper was used in printing New Zealand cheques in the year ended March 31, 1987. The movement from a

tightly regulated industry to a totally deregulated one in the last five years has meant some stiff competition for NZFP, which has reduced its product range.

Its mill at Mataura, Southland, must now be under intense competition, against papers from many countries. However, as Mr Byers says, there are always niches in the market, and demand for fine paper has been growing at double the annual growth in New Zealand manufacture: 6 per cent compounded. Commodity papers, such as the banks and bonds beloved by the business world, should now be made on very wide machines, Mr Byers says.

Mataura probably has the potential to make specialty grades, though there may not be the demand to sustain it without export sales in the fierce world market. Since NZFP limited its range, Wiggins Teape has been buying papers from APPM in Australia. This firm is a division of North Broken Hill Holdings, in which the NZFP subsidiary, Rada, has a stake. This suggests the quashed merger with Amcor might have been a good outcome for NZFP. However, Mr Byers says the high Tasman shipping costs are hindering the growth of an Australasian market in fine papers. To ship paper between Australia and New Zealand

costs about three-quarters the shipping bill for moving the paper from Europe to New Zealand. Overseas competition has been fierce for some time. At one stage in Britain a paper mill was being closed each month and a paper machine every week.

Against this, says Mr Lyn Sayers, the marketing director of Wiggins Teape New Zealand, the country consumes only about 150 kg of paper per head a year — one-third the consumption of the United States. Paper sales are still growing in America. “We tend to follow Northern Hemisphere trends in most things, and so expect growth in the New Zealand market to continue,” Mr Sayers said at the National Library function. The main merchants of fine paper in New Zealand are: B. J. Ball, N.Z., Ltd, A. Cowan and Sons, Armitron Paper (the amalgamation of the paper interests of Williamson Jeffery and Gordon and Gotch), British and Foreign Papers, and A. M. Satterthwaite and Company. Wiggins Teape in Britain, the parent firm has a turnover of about SNZ2.7 billion. It is part of the BAT group. New Zealanders, like most people in the world, are continually moving to better grades of papers.

This is to show off the ever more colourful printing to meet tastes that are being changed by colour

television. The Zanders calendars on display were an example of superb printing. They feature 13 holograms hot-sealed to Chromolux board. They can be viewed in natural light, but are best if illuminated from above by a spotlight.