paperlinx says positive signs emerging

Paperlinx says positive signs emerging
09:32, Thursday, 31 March 2005

Sydney - Thursday - March 31: (RWE Australian Business News) -
Paperlinx Ltd was starting to see positive factors emerge - some "macro"
and others a direct result of the company's actions - managing director
and CEO Mr Tom Park told a CorporateFile open briefing today.
"On the macro side, demand is improving in the USA and in
Europe," Mr Park said.
"Assuming this continues, this will lead to tighter markets
globally, putting upward pressure on international paper prices while at
the same time reducing the amount of paper looking for a home," he said.
"From our own actions, we have leveraged our local supply
advantages to win a 40,000-tonne contract with a key Australian buyer of
copy paper.
"This is based on a range of benefits that we can provide this
customer while bringing paper back to the domestic market that we would
otherwise export at lower margins.
"We have also invested in the key Reflex brand and seen a
positive response to the improved quality of the product and the
increased promotion," he said.
"In a few months the upgrade of our sack kraft paper machine
will be completed, and this will improve quality and lead to higher
profitability on these products," the CEO added.
"However, while these type of actions will help the business,
and we remain focused on reducing our production costs and improving
competitiveness, the current level of paper selling prices in Australia
is continuing to significantly depress the earnings of Australian
Paper," Mr Park said.
He said the company had no updates to make to its forecast of an
improved second half, made with the interim results release in February.
Shares in Paperlinx rose 6c to $4.15 yesterday.