Treasury modelling confirms importance of KCA to SE South Australia

11 November 2008

Treasury modelling of the Carbon Pollution Reduction Scheme (CPRS) released recently has indirectly confirmed the importance of Kimberly-Clark’s pulp and paper operations to the success of the CPRS.

Kimberly-Clark Australia spokesperson, Ross Hearne, pointed out that the modelling assumes dramatic growth for forestry operations – growth which must be fuelled by demand from the Pulp and Paper industry as well as the sawlog industry.

“The pulp- log market is a critical component of forestry industry profitability in regional areas,” said Dr Hearne. “The importance of the Pulp and Paper industry to the viability of forestry in Australia was recently confirmed by a report by leading environmental consultants, URS Corporation.

“The URS report found that in 2007, 30% of the total forestry harvest was used for pulp-logs by the Pulp and Paper industry. Clearly, this is a major revenue stream for the forestry industry which adds value in Australia.

“Without this revenue stream the profitability of forestry operations is greatly reduced and the growth of forestry projected in the Treasury modelling would be questionable,” Dr Hearne said.

Mill Manager at the Kimberly-Clark Millicent Mill in South Australia, Scott Whicker, also noted the importance of Kimberly-Clark’s operations to the region.

“Kimberly-Clark directly and indirectly provides 1400 jobs and contributes $800m to the economy of the South East of South Australia,” said Mr Whicker.

”The Treasury modelling acknowledges that emissions intensive industries will contract and that regional dislocation will occur. It assumes that other opportunities emerge but what these are in regional areas such as ours is not obvious.”

Dr Hearne said, “The modelling of the CPRS indicates the potential for a severe impact on Kimberly-Clark and therefore for the South East region in the short term. For Kimberly-Clark to continue to support the growth of the region’s important forestry operations it is important it gains Emissions Intensive and Trade Exposed status through the transitional period until global agreement on Carbon reduction is achieved.”