Carter Holt seeks Tasman Mill

By Phil Boeyen, ShareChat Business News Editor

Thursday 1st February 2001

Carter Holt Harvey (NZSE: CAH) has confirmed market speculation that it wants to buy the Tasman pulp mill from new owner, Norske Skog.

Carter Holt has applied to the Commerce Commission for acquisition approval. The Commission has ten working days to make a decision but can extend the period if necessary.

The Commission says the deal involves two of the world's biggest forestry companies, International Paper and Norske Skog

International Paper owns 50.3% of Carter Holt, which has pulp and paper division plants at Whakatane, Penrose, Mataura and Kinleith.

Norwegian company Norske Skog, which acquired Fletcher Challenge Paper last year for $2.5 billion, is the leading supplier of newsprint in New Zealand, Australia, Asia and South America.

The company announced in January that it was in the process of a possible sale of the pulp part of the Tasman Mill because it was outside its core paper business.

It says the pulp mill has an annual capacity of 280,000 tonnes and has high profits.

Norske Skog Canada announced early last month it would reduce pulp production by around 25,000 tonnes in the first quarter of 2001 due to continuing lower demand for market pulp, primarily in the Asian markets. The company is also looking to sell its Mackenzie pulp mill in British Columbia.

In its application for the Tasman pulp business CAH states that the proposed acquisition is of assets at the Tasman Mill only, and not of shares in Norske nor of other assets owned by Norske.

The Commerce Commission says it must determine what markets are relevant to the proposal, and then assess what impact the proposal would have on competition in those markets.

Carter Holt Harvey last week delivered December quarter net earnings of $42 million, less than half the previous year's $89 million result, and warned of slowing pulp markets.

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