Sawmills put pressure on state

SIX Gippsland sawmills have renewed pressure on the Victorian government, urging Premier Daniel Andrews in an open letter to save jobs, protect regional communities and return confidence to the timber industry.

The G6, as the new group calls itself, fears that the six mills are at a competitive disadvantage since the state government bought into the Australian Sustainable Hardwoods mill at Heyfield, and VicForests’ action in not extending their timber contracts past 2021.

VicForests is the state government’s commercial forestry arm.

“Urgent action is needed,” said the G6, which consists of Fenning Timbers, Bairnsdale; Ryan and McNulty, Benalla; Dindi Sawmill, Murrindindi; AG Brown Sawmill, Noojee; Kelly’s Timber, Westburn; and Powelltown Sawmills.

The G6 said the government’s large stake in the Heyfield mill made it a “competitor with every other timber mill in Victoria”.

It urged the government to reassure the timber industry that it would be “treated equally and given a fair go”.

“Don’t get us wrong. We’re happy for the Heyfield folks,” the letter read.

“We’d be rapt if we were part of the special deals, some adjustment support and the advantages they are getting.”

But they feared the advantage given to Heyfield could drive them into the ground.

The G6 maintains the refusal to allow wood contracts past 2021 also included a halt to some harvest and haulage contracts to some Gippsland businesses.

Under threat are the sawmills’ clients, their 200 employees and the 700 jobs down the line that they support.

Australian Securities Investment Commission records show that the Heyfield mill is owned 51 per cent by management and 49 per cent by the state government.

It is believed management shareholders will buy the government’s share over time.

VicForests’ 2016-17 Resource Outlook, released last July, forecast a reduction of 88,000 cubic metres of sawlog quality timber over the 2013 Resource Outlook levels.

VicForests chief executive, Nathan Trushell, said the cut in timber volume was mainly due to increased conservation levels of forest to protect the Leadbeater’s Possum.

Heyfield was the only mill immediately affected by the cut, down from 150,000 m3 to 80,000m3.

“None of our other customers’ supply has or will be impacted by our decision for their current contract term,” he said.

“VicForests is honouring its contractual commitments to the best of our ability to all of our customers, and any suggestions otherwise is misleading.”

Mr Trushell said contract extensions were potentially available to some customers within their current contracts. Normally, these extensions would have been offered.

“However there has been a dramatic change in our forward supply profile. We need to manage any decisions around future timber allocation in a fair and reasonable manner to all our customers, including Heyfield,” Mr Trushell said.

“There is no special future deal for the Heyfield mill.”

Mr Trushell said industry understood the next step down was from 152,000m3 of ash sawlog to 130,000m3 by 2020. VicForests was keen to talk with customers on how to resolve the forward allocation “in an equitable and sustainable way for all operators”, he said.

The stand-off comes as the federal and state governments this month agreed to complete Victoria’s five regional forest agreements (RFAs) by March 31, 2020.

The six mills source logs from all eastern RFAs — the Central Highlands, East Gippsland, Gippsland and the North-East. RFAs last 20 years, and are reviewed every five years.

A state government review of the Leadbeater’s Possum surveys argued that changing to forest landscape planning was the best way to manage endangered species. It would also provide greater certainty and reduced costs to industry.

The report recommended reviewing timber harvest exclusion zones around possum colonies and other existing Special Protection Zones in the Central Highlands to optimise the availability of timber availability, and protect the possum, threatened species and other forest values.

After more surveys, the report said the Central Highlands State forest zoning scheme, including the THEZ, should be reviewed.

This would take into account new information and changes in the forest since the Leadbeater’s Possum reserve system was set up in 2008.

Currently, about 450,000 hectares, or 5.7 per cent of Victoria’s native forest, is available for harvest.

In 2016-17, VicForests harvested 2965 hectares, or 0.038 per cent of the total native forest area.

When the Victorian RFAs were first signed, 955,000 hectares of forest was put into conservation reserves.