PAPYRUS AUSTRALIA is renegotiating production agreements as mechanical problems with its manufacturing line delay the commissioning of its Queensland plant.
The Adelaide-based banana ply paper maker said it was resolving mechanical failures associated with the outer-trunk cutting blade mechanism of its Beta Veneer Unit.
``We have identified the problem... It will be resolved by a number of parties,'' Papyrus chief operating officer Grant Pigot said.
The delay means Papyrus will renegotiate agreements with overseas partners, including World Future Fibre for its JV deal to operate the manufacturing line in North Queensland and Vietnam, its EU licensing agreement with Hayot and its EU distribution deal with 3W Tout Bois.
``It will just be a matter of weeks and they (JV partners) are happy to renegotiate,'' Mr Pigot said. Papyrus has installed all other plant, equipment and machinery necessary to operate the Walkamin Production Facility.
It has also obtained approvals from local governments, Primary Industry, Quarantine authorities, and others to allow it to run the production facility on a commercial scale.
The BVU supplied by Sage Automation did not pass the Acceptance Test and could not be handed over to the production team.
An independent assessment of the BVU by Papyrus established that there were a number of mechanical issues.
Papyrus has now executed an agreement with Sage Automation for access to the software and automation system contained in the BVU and ``to resolve the dispute between the two companies by expert determination''.
Papyrus anticipates continuous production at the Walkamin factory from September 2009 with revenue to follow.
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