Plantation woodchip exports and hundreds of forest contracting jobs in Tasmania are set to be hit by a downturn in economic activity in China. Source: The Advocate
Forico chief executive officer Bryan Hayes said the company’s customers in China and Japan had advised postponement of up to eight ships or nearly 400,000 tonnes of woodchips.
The 40% cut in quota means fewer people will be required to work in the forest harvesting and cartage of logs.a
Forico will shut down operations for two weeks at the end of July and beginning of August to reduce woodchip stockpiles at Long Reach and Burnie.
Mr Hayes none of Forico’s 110 direct jobs would be affected. However, indirect employment of 450 people via contractors and sub-contractors will be affected.
“I am not anticipating any Forico staff job losses but certainly in the contracting workforce they will have no choice but to reduce numbers because of lower activity levels,” Mr Hayes said.
“I can’t give you an estimate of numbers, but I just know that some of the contractors have been hit very hard and some have stopped immediately.”
The Australian Forest Contractors Association was unable to be reached for comment.
Mr Hayes said the coronavirus pandemic had exacerbated an economic slowdown caused by the US-China trade war.
“That has caused consumption of paper products in Asia and globally to drop,” he said. “That has impacted Forico in the last few weeks, we’ve been advised by customers in Japan and China that they have either cancelled or deferred vessels until next year.”
While Australia and China have had diplomatic tensions this year Mr Hayes said that all the information coming to the company was that the downturn was purely economic.
“There is nothing to indicate that there are any other political considerations,” he said.
Exports to China comprise 75% of Forico’s total export volume with Japan making up the remainder.
