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CHH Cleared To Acquire Tasman Mill From Norske

Issued 21 March 2001

Commission Clears CHH To Acquire Tasman Mill From Norske

The Commerce Commission has cleared Carter Holt Harvey Limited (CHH) to acquire the kraft pulp processing assets of Norske Skogindustrier ASA at the Tasman Mill.

Commission Chair John Belgrave said that the Commission was satisfied that, should the proposal go ahead, CHH would not acquire or strengthen dominance in any of the seven relevant markets.

Mr Belgrave said that the proposal would leave CHH with large market shares in all seven markets. CHH already owns the other main supplier of kraft pulp in the country, the Kinleith Mill.

However, after extensive interviews with 13 major companies in the markets, independent sawmills and downstream users including users of packaging materials, the Commission concluded that, in this case, large market share would not equate to dominance.

Pulp products are traded internationally in large quantities. In general terms, the factors preventing dominance in New Zealand markets are the ability of CHH customers to import products, the ability of CHH suppliers to export products and, in some markets, the countervailing power of customers or suppliers.

Full details of the Commission's decision will be available when public copies of Decision 424 Carter Holt Harvey Limited and Norske Skogindustrier ASA are released by the end of this week.

Background

Kraft pulp is produced by a chemical process and is used mainly for paper or cardboard. It is also used to provide reinforcing in some fibre cement building products.

The Commission considered the likely impact of the proposal in the markets for the:
* production and supply of market kraft pulp (excluding fibre cement
pulp) in New Zealand
* production and supply of market kraft fibre cement pulp in New
Zealand
* purchase of pulp fibre in the central North Island
* production and supply of bulk liquid chlorine in New Zealand
* production and supply of hydrochloric acid in New Zealand
* production and supply of sodium hypochlorite in New Zealand
* production and supply of crude sulphate turpentine and crude tall
oil in New Zealand.


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