Norske Skog renews Fairfax and News contracts to 2020

Norske Skog has separately entered into new long-term supply agreements for newsprint and improved grade paper with the News Limited and Fairfax Media.

Sven Ombudstvedt, chief executive officer at Norske Skog (pictured above), says, “This is a very important agreement for the Norske Skog group and we are happy for this confirmation of our position as the preferred supplier of newsprint and improved grades to the most influential media players in Australasia. These agreements give us the opportunity to cooperate closely with these customers; and thus, intensify the effort to reduce costs in the value chain.”

News Limited and Fairfax Media had existing supply agreements with Norske Skog that were due to expire in June 2015 that have been replaced by new agreements that run until the middle of 2020. Norske Skog says its long history of supplying both News and Fairfax with the majority of their newsprint and improved grade paper under long term contractual arrangements has delivered benefits to both Norske Skog and its customers through security of supply and demand with stable pricing.

Andrew Leighton, regional president of Norske Skog Australasia, says, “The combined estimated value of the new agreements over their full term is approximately NOK9bn. Norske Skog has worked separately with both News and Fairfax during 2013 to develop mutually beneficial agreements that secures Norske Skog’s business with News and Fairfax beyond 2015.

Ombudstvedt adds, “These agreements are securing our newsprint and improved grade market share in Australia and New Zealand until 2020. At the same time, these agreements will also limit our future foreign exchange rate exposure in Australia and New Zealand.”

Last year, News Limited and Fairfax Media Limited, Norske Skog’s largest customers in Australasia, represented approximately 70 per cent of the newsprint and improved grade market in Australasia. Norske Skog has three mills in Australasia: Albury, Boyer and Tasman. They have a total production capacity of 700,000 tons.

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