Innovation and Industry Minister Senator Kim Carr announced the formation of the Pulp and Paper Industry Strategy Group this morning. It is to report back to him by November.

Senator Carr said in a media statement that the group would undertake a review of the industry and develop a plan to encourage innovation and attract investment in pulp and paper manufacturing in Australia.

He said members of the strategy group would include senior representatives from the leading pulp and paper companies, unions, and all levels of government.

The group will be overseen by Jim Henneberry, general manager of Australian Paper and Mr Michael O'Connor, the national assistant secretary of the CFMEU's Forestry and Furnishing Products Division.

Gunns is currently trying to put a finance package together for its controversial $2.2 billion Bell Bay pulp mill proposal.

Jon Ryder, general manager of PaperlinX's printing and publications division, is also on the panel. PaperlinX is currently trying to sell its Burnie and Wesley Vale mills,

The pulp and paper manufacturing sector employs some 19,000 people and contributes around $1.3 billion a year to the Australian economy, Senator Carr said.

"It is an important industry, particularly in regional areas, so it is vital we get the balance right between environmental concerns and economic activity in order to take Australia forward on a sustainable basis.

"The industry is undergoing a period of rationalisation, particularly in meeting the challenges of the current global recession.

"We need a full and frank assessment of the challenges and opportunities facing the sector, which is what this Review will provide.

"Industry and Government need to work together to create an operating environment where it makes good business sense for international firms to invest in Australia.