Lignor to receive State log residues until 2013: Minister

Subiaco-based Lignor Ltd will receive log residues from the State Government's Forest Products Commission for use in its engineered strand lumber products until December 2013, Forestry Minister Kim Chance announced today.

The full text of an announcement from the Minister's office is pasted below

Forestry Minister Kim Chance today announced an agreement for the Forest Products Commission to supply log residues to Lignor Ltd, a company intending to construct a $300 million manufacturing facility to produce engineered strand lumber products in the Great Southern.

"The agreement is worth about $14 million each year to the State and local timber workers," Mr Chance said.

"It also offers a local and a higher value-added solution for the use of karri, jarrah and marri residues, which are presently a low value resource.

"Obtaining a significant buyer for this material will also help underpin the economic viability of the entire native forest industry."

Lignor Ltd managing director Glyn Denison said the company had been developing the project for the past seven years, with plans to build the plant about 14km north of Albany.

"The plant is scheduled to open in late 2008 and will use applied patented innovative processes to create value-added timber products," Mr Denison said.

"It will utilise mainly eucalypt logs in the stranded lumber manufacturing process that is commonly used overseas.

"The innovation is in the use of eucalypt combined with forest residue and Lignor expects the resulting exceptionally high-strength products will compete against steel in many applications.

"After four years of joint development work between FPC and Lignor, about 200,000 tonnes per year of karri, jarrah and marri residues will be turned into high quality engineered strand lumber suitable for the construction industry."

Although more than 70 per cent of the plant's timber will come from bluegum plantations near Albany, FPC's hardwood residues will ensure a stronger product in many applications for the end products.

"The State Government, through the FPC, is continually working with industry to find higher value uses for our unique timbers. This new product range will not only help reduce costly imports but also earn valuable export dollars," Mr Chance said.

"Last year the State Government was proud to announce a $9.68 million package, which included the commercial user infrastructure for the Mirrambeena Timber Processing Centre near Albany and to support Lignor, which has a 31ha site in the centre. The Lignor facility will be the first of its kind in Australia."

Lignor has received about $16 million in State and Federal Government funding to date.