The state government decision to close the native forest timber industry culminates eight years of mismanagement that turned VicForests from a profitable business into a loss maker, an analysis by a Traralgon consultant has found. Source: Philip Hopkins, Latrobe Valley Express
As a result, Victoria will no longer be a major domestic producer of appearance grade and further manufacturing grade sawn timber.
“Also, Melbourne will no longer be the centre of further manufacturing of hardwood sawn timber into value-added engineered wood products that generate lots of jobs,” said consultant John Cameron. Mr Cameron has a Diploma of Horticulture, an MBA from Monash University and a long employment background in forestry, particularly in Gippsland.
Mr Cameron said a chief victim was Gippsland’s largest operation, Australian Sustainable Hardwoods’ manufacturing plant at Heyfield, where 100% of output was appearance grade timber or further manufactured into timber products that expose the natural beauty of the timber.
“ASH is the largest vertically integrated hardwood manufacturer in Australia and directly employs 192 people. Its sawmill and nine further manufacturing plants produce Masslam-laminated appearance beams, staircases, benchtops, custom mouldings, lining, solid flooring and various timber components,” he said.
Mr Cameron said Australian hardwood sawn timber mill gate revenue sold for 3.5 times the price of Australian softwood sawn timber and contributed to much greater value-adding and job creation than softwood.
“This has been driven by the greater strength, hardness, dimensional stability, low degrade and other unique wood properties of Victorian native eucalypts. The softwood plantations proposed, but yet to be delivered under the Andrews Governments Forestry Plan, are unsuitable for many applications where these qualities are critical,” he said.
Mr Cameron said the state government’s mismanagement had resulting in a raft of bad outcomes:
- Lack of legislative support and mismanagement of VicForests resulted in its net worth declining since 2014-15 by $64m million, delivering a business that is now worthless. A profitable VicForests was turned into a huge loss maker with cumulative losses of $51m over the past three years to 2021-22.
- In 2021-22 preventable activist litigation cost VicForests $24.1m in legal and associated costs.
- VicForests’ ‘operable area’ has been reduced from 450,000 ha to 160,000 ha due to overzealous increases in ‘various conservation reserves’ that ignored win-win outcomes that would have been available under multiple use, in accordance to the Regional Forest Agreements and the National Forestry Statement.
- The flawed forest policy and lack of a rigorous forest strategy has resulted in a decline in hardwood sawn timber output and also a decline in sawn timber recovery (and a decline in plantations).
- Mills will have to write off large investments made in value-adding for the production of high-value appearance timbers and further manufacturing of timber components. These investments were made on the assumption that government log supply agreements would be honoured.
- The government has scrapped its agreements without adequate consultation and relegated sovereign risk to something riskier than junk bonds.
- Increased conservation reserves were put in place after the 2019-20 bushfire. The 1.5million ha burnt was preventable and a result of negligent bushfire mitigation under the flawed ‘Safer Together’ bushfire policy that ignores recommendations of the Bush Fire Royal Commission.
You can read John Cameron’s full analysis in Friday’s Daily Timber News.
