Miller blames fall on forestry law

A SAWMILLER in Perth’s southern suburbs has blamed dramatic cutbacks in native forest logging for forcing his fledgling business into liquidation.

McLean Recycling Industries Pty Ltd proprietor Gordon McLean said a plan to exploit marri timber – traditionally shunned by the sawlog sector – fell foul of the Western Australian Government’s decision to reduce logging in native forests.

“The marri was a disaster, but the mill was perfect,” Mr McLean said.

He said a shift to a jarrah focus was possible but required further capital on top of the $3 million already spent developing the site and infrastructure in Oldbury since 1994.

Mr McLean said he was hoping to keep the business intact and was close to signing up new investors for $1.6 million.

While he backed much of the proposed constraints on old growth logging Mr McLean said the same conservationist forces that were destroying his sawlogging business had also undermined his ability to raise capital by affecting the value of his land.

The sawmill is built on land reclaimed by McLean Recycling Industries using landfill from construction and development sites.

Mr McLean said claims about the environmental impact of the landfill had affected valuations on the property, despite a clean bill of health provided by the Department of Environmental Protection and the local council.

He said this issue had been exacerbated by unexpected urban encroachment on his industrial site despite council assurances to the contrary that he claimed he had received when he embarked on the venture.

“The changes between 1994 and 2003 are so massive I am staggered,” Mr McLean said.

If the money cannot be raised the sawmill would be sold for scrap and the land sold.

Louis Nilant from Clout & Associates, who was appointed liquidator of the company with colleague Oren Zohar last year, said if the assets were broken up and sold separately it was unlikely there would be anything left for unsecured creditors.

Creditors meeting minutes from August show BankWest was owed $890,000 of the $2.2 million in debts outstanding.

Mr McLean said he had 56 years experience as a sawmiller and believed marri had great potential.

“It was considered uneconomic,” he said.

Flaws in the trees meant that only one in every few logs was viable for sawlogs but Mr McLean said he had created a mill that would have been economic until legislation made it too difficult to convert useless logs into woodchips.

An alternative to use low-grade jarrah logs was feasible but the company needed to build more drying kilns to add value to the logs, a move that required further capital.

Mr McLean said the investors he was in discussions with would end up with the majority of the company and funds would be used to meet the obligations to the bank.

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