AUSTRALIAN Sustainable Hardwoods managing director Vince Hurley has dismissed the Herald Sun’s front page story, headlined ‘Rumour Mill – Secret deal undercuts private timber producers’ on Monday as containing misinformation and incorrect inferences.
According to the metro newspaper, VicForests is fighting a decision to publicly release the timber supply agreement it made with ASH at the Victorian Civil and Administrative Tribunal.
The story detailed how the state government body “increased” the Heyfield manufacturer’s timber supply to 240,000 cubic metres over three years, after an initial deal of 200,000 cubic metres was offered “at the time private operators were seeking a public bail-out”.
The article quotes Premier Daniel Andrews, who argued prior to buying the mill that anything above 200,000 cubic metres would mean “risking the future of Victoria’s timber supply”.
The article states some smaller sawmillers were unable to view ASH’s contract, and “raised fears of competitive disadvantage”.
In the article, journalists Matt Johnston and James Campbell maintained the latest deal with ASH “undercuts private timber mills” and quoted lawyers for smaller mills as saying the state government effectively “controls the board of directors of holdings” at ASH.
Mr Hurley said ASH is a privately-owned timber mill.
“There are no secret deals, ASH is a private company, is not controlled by the government nor has any advantage,” he said.
At the beginning of 2017, ASH’s timber volume was dropped from 155,000 cubic metres per year to 80,000.
At the time, VicForests said it could only offer 80,000 cubic metres of timber for 2017 and 60,000 each for the two following years, because of dwindling supply supply because of new prescriptions for Leadbeaters possums.
This was revised to 80,000 for each year in February 2017, long before the state government expressed any interest in buying the mill. ASH was the first company to have its VicForests contract up for renewal, and therefore no other company had, by that stage, lost any of its timber volume.
The sawmill clients of the lawyers quoted in the article have not had their timber volume reduced.
The volume drop from 155,000 cubic metres to 80,000 cubic metres resulted in the company’s then majority shareholders to consider closing ASH rather than continuing at the lower volume.
Then existing chief executive officer Vince Hurley, engineering and projects manager Garry Henthorn, national sales manager Brett Bould, marketing manager Daniel Wright and commercial manager Ian Jones became joint owners by buying 51 per cent of the company, putting in their own money to keep the business afloat. The state government bought the remaining 49 per cent and has nominated three directors on the company’s board.
The sale of the mill was finalised in September 2017.The company still operates on 80,000 cubic metres per year, unchanged from the offer given in February 2017.
The Herald Sun‘s article comes about after the state government’s decision to ban native timber harvesting in Victoria by 2030, with supply halving by 2025 with the remainder available through a competitive tender process.
Mr Hurley said at a time when the timber industry should be showing a united front, it was disappointing a couple of other, smaller mills had gone to the media with a dreamed up conspiracy theory about not being able to view ASH’s contracts.
“Volume availability is not about ASH, it is about government policy,” he said.
He added regardless of whether ASH exists or not, no mills will be around come 2030 if government policy doesn’t change.
The Gippsland Times understands all VicForests sawlog contracts are confidential.
Speaking with the Herald Sun, VicForests chief executive Monique Dawson said ASH’s timber supply did not affect other customers.
ASH management was not contacted for comment for the Herald Sun‘s article.
