Forestry contractors in northern Tasmania are investing millions of dollars in new equipment to supply a woodchip mill near Burnie that’s reopened under new ownership. Source: ABC Rural
It’s been five years since failed timber company Gunn’s closed it’s woodchip mills in the state’s north, leading to hundreds of job losses and the closure of contracting businesses in the region.
The new owner of some of Gunn’s assets, Forico has invested $9.5 million dollars to refurbish and re-launched the Surrey Hills Mill, about 30 kilometres south of Burnie.
The very same contractors, including Sarani Woodhouse’s family business Ulverstone-based Woodhouse Transport, whose operations went to nothing, have now started re-building.
“It’s the most positive thing we’ve had in five years, we had rough times before Gunns fell over as well, things haven’t been great for a long time,” the 29-year-old said. “It’s good to be able to move forward.”
Woodhouse Transport had slashed its workforce from 18 to one when Gunns went into receivership three years ago and considered moving operations to mainland Australia. But now after signing new five-year contracts with Forico staff numbers have been rebuilt to 13 people.
Paul Morgan’s firm Casa Grande Ltd is one of his family’s contracting businesses in northern Tasmania and has also signed five-year contracts with Forico.
He said after having to let go over 20 workers when Gunns fell, he’s looking forward to growing his workforce and business again.
But for some contractors, many of which have taken on hundreds of thousands of dollars of new debt to supply Forico, a shadow has been cast over the upswing in the plantation sector.
The liquidators of Gunns’ PPB Advisory are taking legal action against some contractors to recoup millions of dollars.
Paul Morgan said that this isn’t good news for some contractors.
“I can’t speak for individual cases but it’s certainly going to have some effect on some people,” he said.
When asked if it could drive some out of business, Mr Morgan answered “Yes.”
The Surrey Hills Mill is processing about 750,000 metric tonnes of woodchip and Forico has plans to increase that to about a million metric tonnes within the next six months.
Forico’s parent company, New Forests, is supplying surging demand from China and Japan for woodchips and has a plantation-only mandate.
