Mill closing earlier

RELATED: Parties urged to find a solution

THE closure of the Australian Sustainable Hardwoods timber mill and timber products plant at Heyfield will begin sooner than initially announced.

After rejecting a state government offer to buy it, closure of the mill will now begin in August.

It is understood the government offered $20 million for the business, plus another $20 million to take on its debts. 

The offer was based on numerous evaluations of the business.

The closure will leave about 260 workers, many of whom found out about Wednesday’s announcement on social media, out of a job.

The mill’s owner, the Hermal Group, said the move was made in response to a continued shortage of timber from VicForests.

In a statement, Hermal claimed it had a “genuine intention” to continue operations at the mill at full staff capacity for as long as possible, which was expected to be at least until mid-September. 

While there were business and commercial issues around VicForests’ failure to supply enough logs, Hermal noted a significant numbers of harvesting areas were lost this year because of the continued application of Leadbeater’s Possum exclusion zones. 

According to Hermal, VicForests will have now failed to meet its contractual timber supply arrangements for four out of the past five years.

Management said it would meet with affected staff next week to work through their options.

The Heyfield mill is Australia’s largest hardwood timber facility of its kind.

Mill owners had been working with the CSIRO on wood waste fuel paste development, with the intention of initially building a highly efficient five megawatt scalable carbon neutral electricity generator at the site, as a national demonstrator operational facility.

The owners said they had looked at all options to keep the mill open, including less commercial options such as giving the state government more time to work through its internal issues by accepting the 80,000 cubic metres offer in the first seven months of the 2017-28 year, however this was rejected by the government.

The owners have also looked at importing sustainable plantation logs from Tasmania and Ash species from Chile, however none were able to be progressed.

Hermal claimed since the closure of the mill was forecast in January, no fair commercial offer had been received from the government.

ASH chairman Ron Goldschlager said his “heart is with my staff and has been so throughout this whole fight”.

“I am appalled at the insensitive ways that Daniel Andrews has treated our staff and good people in Heyfield,” he said.

“Mr Andrews’ actions to falsely build-up the hopes of the staff over the last four months is a disgraceful, selfish act, and he should hold his head down in shame.”

“The damage that VicForests and now Daniel Andrews have inflicted upon this business, our staff and the local region demonstrates just how little respect or understanding Mr Andrews and his bureaucrats have for business and our state of Victoria.”

According to Mr Goldschlager, the “forced closure” of an environmentally friendly, profitable business and major employer in rural Victoria was “immoral, unnecessary and simply outrageous”.

“Thousands of decent Victorian families currently employed in this timber industry supply line will have their lives disrupted and will suffer for no good reason at all,” he said.

“Not being a union man myself, I must commend the efforts of the CFMEU in this process and the professionalism and selfless dedication they have demonstrated and support they have given in attempting to keep our staff in jobs.

“Sadly, not even Labor’s union friends could get this unscrupulous and chaotic Victorian Labor government to see sense. 

“Who cares about the people of Victoria?”

Mr Goldschlager acknowledged the support for ASH staff from politicians Jeff Bourman, Danny O’Brien and Tim Bull, as well as Greens forestry spokesperson Samantha Dunn.

“Samantha’s willingness to look at all options pragmatically in an attempt to find a way to balance the environment and our business needs in our proposal to move progressively over the medium term to full plantation supply, was refreshing and appreciated,” Mr Goldschlager said.

He said the approach of the Greens “demonstrated significantly much more maturity than I expected”,  in contrast to that shown by Mr Andrews.

Gippsland Senior
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