Opal has undertaken a legal lockout of its Maryvale Mill production team, consisting of about 300 staff, following unresolved negotiations with the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) for a new enterprise agreement.
Opal’s current production agreement expired at the end of December 2024, but the company said the terms and conditions that were appropriate many years ago in previous enterprise agreements are not relevant to the mill’s operations today.
Opal started facing supply challenges for its Maryvale Mill towards the end of 2023, when the VicForests situation resulted in the end of wood supply, stopping the mill from manufacturing white pulp and paper at its site.
It then decommissioned its Paper Machine 5 (M5), which previously made copy paper including Reflex, and Paper Machine 2 (M2), only running three of its paper making machines and directing its focus to creating brown paper bags.
The move caused its parent company Nippon Paper a total of 6.1 billion yen ($63.9 million) in losses and a dip of almost half of its production volumes.
As such, Opal says the new enterprise agreement needs to reflect these significant changes and is seeking to redefine the agreement by continuing to negotiate with the CFMEU and its production team members.
Opal expects the new agreement to include fair and reasonable changes to its operations and to embody these in a simpler, fair and competitive way.
“We are focused on reaching an enterprise agreement with our team members and the union that is fair and allows us to supply our customers with quality paper in an extremely competitive and evolving market,” the company said.
“Unfortunately, given the protected industrial action taken and upcoming notified action by the CFMEU, which includes planned rolling shutdowns of the mill’s infrastructure, we cannot operate our paper production facilities.
“We are disappointed to announce that we have been forced to make the decision under the Fair Work Act to undertake a legal lockout of our production team members covered by the CFMEU Agreement.
“Given our commitment to good faith bargaining and the ultimate success of our Maryvale Mill, we remain confident that the enterprise agreement negotiations will be successfully resolved so that our team members can return to work.
“Our mill has been in operation since 1937. It is part of the fabric of the Latrobe Valley, employing generations of locals and driving economic activity for local industries and thousands of Victorians. Opal is motivated to ensure the mill continues for generations to come, but to do so we must challenge ourselves, our valued team members and our stakeholders to adapt to the reality of the market in which we now compete.”
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