A tale of two pine companies

STATE Development Minister Clive Brown had a broad smile on his face last week when he officially launched Wesbeam’s $86 million pine processing project at Wanneroo.

But back in his electorate of Bassendean, the 100 staff at another pine processing company, Pinetec, are finding it harder to raise a smile.

The bright future facing Wes-beam, and the problems facing Pinetec, are closely connected.

Mr Brown is the minister caught in the middle, trying to ensure a future for both companies – and provide extra jobs in the marginal electorate of Collie.

Wesbeam, owned by industry veteran Dennis Cullity, is building WA’s first laminated veneer lumber (LVL) plant.

It expects to provide employment and training opportunities for 140 people when operations commence in mid 2004.

Wesbeam has a 25-year agreement allowing it to buy 160,000 cubic metres of pine logs each year, primarily from the Gnangara pine plantation.

This has added to the supply problems facing Pinetec, which has traditionally sourced a portion of its pine from around Perth.

Pinetec director Alan Gerrard said the company built a new sawmill and treatment plant at Bassendean 10 years ago because it was considered the best location for long-term timber supplies.

Now Pinetec sources most of its pine from the south west.

“The logs are coming from further away each year,” Mr Gerrard said.

“Government policies have put us in a position where we have to move.”

Pinetec aims to turn its current predicament into a positive, by investing $10.5 million in a new sawmill and treatment plant in the South West.

“We are the only project of any substantial size that is creating new jobs in the south-west,” Mr Gerrard said.

The company expects to create 40 new jobs in the south west on top of the 100 jobs it provides at Bassendean, where it plans to increase production.

Its pine log intake would nearly double to 120,000 cubic metres.

Pinetec’s first preference was to build the sawmill at Dardanup, where it would be located alongside two of the State’s big pine pro-cessing plants – Wespine Industries’ sawmill and Laminex Group’s particleboard plant.

Instead the State Government has offered Pinetec a $1 million assistance package on the proviso that it builds the $10.5 million sawmill in Collie.

Mr Gerrard said the Government was working hard to make Collie more attractive, with negotiations at a sensitive stage.

A second proviso – that the Federal Government provide matching $1 million assistance – could prove even harder to satisfy.

As reported in last week’s WA Business News, the Federal Government’s assistance package for the timber industry, totalling $15 million, is highly unlikely to be paid because of a stand-off with WA over the planned jarrah harvest.

“The funding issue needs to be resolved,” Mr Gerrard said.

“If we get $2 million it makes the change worthwhile.”

Mr Gerrard said it was frustrating that Pinetec had responded to Federal government advertisements in 2001 inviting applications for assistance, yet it still had not received a response.

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