In an announcement to the Australian Stock Exchange on Wednesday, parent company PaperlinX confirmed its mills at Bomaderry, Maryvale in Victoria, and northern Tasmanian towns Burnie and Wesley Vale, which comprise the manufacturing business Australian Paper, were on the market.

“PaperlinX is currently seeking investors for some or all of its Australian manufacturing business, Australian Paper,” the announcement stated.

But it stressed no decision had been made to sell.

“Any decision to sell some or all of Australian Paper will be assessed in the light of the overall value of any offer, the value to PaperlinX of retaining Australian Paper, and PaperlinX’s alternative uses of funds in the near and medium term, if a sale proceeds,” the announcement said.

Corporate affairs executive general manager of PaperlinX, David Shirer, also stressed no decision had been made to sell anything, and said the company was really just testing the water.

“In many ways it’s testing how people value the company compared to how we value the company,” he said.

The search for investors in the paper mills was actually flagged in August, Mr Shirer said, with “a number of interested parties in the process of undertaking due diligence”.

However, no offers had been made and Mr Shirer said any that were would be assessed on the value they gave shareholders in comparison to the value of holding on to the manufacturing operations.

The manufacturing arm of the business did not make a profit in the last financial year, and profitability had been flat for a few years since 2003, when a pre-tax profit of $160 million was made, according to Mr Shirer.

He said PaperlinX had relied on its paper merchandising business to remain profitable in the past few years, adding merchandising provided a more steady income stream while manufacturing “is more volatile”.

Part of that volatility was caused by the fluctuating Australian dollar, along with increased production in Asia, Mr Shirer explained.

“Our strategy is to run those two earning streams, and at this stage that hasn’t changed,” Mr Shirer added.

The largest of Australian Paper’s four mills is at Maryvale, which is nearing the end of a multi-million dollar upgrade and expansion, and Mr Shirer said it was unlikely any sale would proceed, provided the right offer was made, until the upgrade was finished around the end of the year.

While PaperlinX had called for investors in “some or all” of its mills, Mr Shirer said the best value to PaperlinX shareholders would come from someone wanting to purchase all the Australian Paper operations.