South Australia’s timber manufacturing sector is undergoing a revolution with one of the largest mills beginning a $20m upgrade and progressing plans for a biomass facility worth up to $100m. Source: The Border Watch
The Tarpeena mill – now operating as Timberlink Australia – yesterday celebrated its one-year anniversary under the new ownership regime.
With the milestone being marked with some fanfare, Timberlink Australia’s chief executive officer Ian Tyson delivered a positive message about the future of the region’s powerhouse forestry sector.
He said investigations into securing a biomass facility for the mill were progressing and a decision could be 12 months away.
If successful, he said a biomass facility would deliver a significant “boon” for the forestry sector and broader community.
Explaining the industry was undergoing major change he said the company had created a “significant” re-investment plan for Tarpeena.
He said the revamp included a critical $7.8m grant from the State Government.
“This has enabled us in total to spend over $20m at the site over the next two to three years,” Tyson said. “It is a real transformation project that enables us to be more competitive and able to secure the future of this mill.”
While the mill had a heavy domestic trade, he said the company had just started exporting products to Saudi Arabia.
“A whole new product market has opened up for us and we are also growing our presence in the Australian market,” Tyson said.
Regarding plans to secure a biomass facility he said the company had commissioned a company to undertake a feasibility study report.
“Out of that we will then understand the extent of the investment that is required and the logistics involved around that,” Tyson said. However, he said Timberlink was also waiting for “clarity” on the Federal Government’s investment guidelines.
“So by the time that is clear and by the time we have done our feasibility work, we would hope that would lead to a favourable outcome,” he said.
“We have gone into the process with a very positive view – it will be really good for the mill, good for the community and we think it is a sound viable project.”
But he warned it was a “big investment” and the outcome relied on a number of factors that were outside the company’s control.
Asked about the possible investment sum, he said the outlay could be anywhere between $60m and $100m.
“So they’re very big pieces of investment and very big decisions to make,” Tyson said. “It will be a big boon for the forestry industry because what it does is it finds a home for some of the mill residues and also the forest residues that currently have very low value and there is too much of it for the local industry to consume.
“We think this is a good long-term investment that enables the capability to balance the forest interests and the mill interests – it is a big financial commitment and we have to go in to it very carefully.”
Tyson said a biomass facility would drive up to 30 new mill jobs, as well as having significant spins-offs across the sector.
“This would be significant in this region as it would need extra harvesting, extra processing, extra driving and then a major project like this would employ a lot of contractors for quite a substantial period of time
“In the next 12 months we should get to a point where we know whether this is going to viable for that.”
He warned more information was needed from the political landscape.
“We really need clarity on State Government and Federal Government policy around this to ensure that the broader political environment is understood and the way energy subsidies and energy credits – that whole system – are going to work,” Tyson said.
“I think the Liberal Government is in the process of reviewing it and we are waiting for that review to be completed.”
But he said the review would not stall the project.
Regarding the sawmill upgrade, he said the new investment would create between 15 to 20 new jobs.
“But the most important thing – apart from additional employment – is that it will lower the cost base and enable us to compete with imports and provide a sustainable future for this business and guarantee the employment of people who work here at the moment,” Tyson said.
International timberland investment company New Forests purchased Timberlink following the demise of timber giant Gunns Limited. It formerly operated under the name Auspine Limited.
