Mill manager Bruce Borchardt said a downturn in paper sales over the past few months meant a reduction of 20 staff in the operation’s workforce.

In the last month the number of shifts on the paper machine had been reduced from four to three, leading to the reduction of staff.

The mill has been operating in the Shoalhaven for more than 50 years and in its heyday supported more than 500 employees. 

It now has a staff of 85, which includes contractors.

“The mill is in a difficult position,” Mr Borchardt said.

“Cheaper imports are hurting the site, but we also need to be able to export our products and get them exposure in overseas markets. 

“But we are not priced well in those markets. We have the problem of having higher Australian based production costs.

“At the moment the sales simply aren’t there.

“It is something that has been impacting on the site for a few years now.”

He said unless the market improved, they would continue to run on the reduced basis for some time.

“Owner, Nippon Paper, is very supportive and would love to see the business a success,” he said.

While the paper machine had a reduction in shifts, the paper finishing operation stayed at four shifts.

“We have products coming in from our Maryvale mill in Victoria that use the finishing section, which has allowed it to maintain its four shifts,” Mr Borchardt said.

On a brighter note Mr Borchardt said plans to establish a revolutionary recycling program that can transform disposable nappies, continence aids and sanitary pads into usable items like fence posts, park benches, and speed humps was continuing.

Recycling company Relivit signed a memorandum of understanding with Australian Paper to establish the country’s first nappy and incontinence pad recycling service at the Shoalhaven mill.

The company aims to spend about $10 million on the project including installing additional equipment into the Shoalhaven mill.