More pain for timber towns

Timber millers, furniture makers and many related businesses have been waiting more than a year for the State Government to finalise its Forest Management Plan. Mark Beyer previews the likely outcome.

WESTERN Australia’s second biggest sawmiller, Mundijong-based Colli and Sons, is shaping up as the most likely loser from the State Government’s long awaited Forest Management Plan, at an estimated cost to taxpayers of $20 million or more.

A senior adviser to Environment Minister Judy Edwards has confirmed that 10 sawmillers who applied last year for jarrah allocations under the FMP had been placed in a queue, with Colli being last in line.

Tony Jupp, acting project director in the minister’s office, said seven small timber millers would be first in line to get their requested jarrah allocations, totalling 30,000 cubic metres.

An eighth small sawmiller, Busselton firm JA House, has been knocked out of the process but is currently appealing that decision.

Next in the Government’s queue is industry heayweight Sotico, which has requested 70,000cu metres, followed by Colli (30,000cu metres).

For Colli to survive, the Government would have to approve an annual harvest close to 180,000cu metres, which is the level requested by the timber lobby.

If the Government accepted the industry’s request, it would be sure to anger the conservation lobby, which wants a much lower annual harvest.

The Conservation Council’s Beth Schultz said a yield of 106,000cu metres – which is the minimum yield used by the Forest Products Commission in its planning scenarios – was “way, way too high”.

In reality, the minimum harvest is likely to be 140,000cu metres, which happens to be the ‘indicative’ yield used by the Government in its planning.

This would be sufficient to supply the Greenbushes and Nannup mills, which already have guaranteed long-term allocations (see table), as well as the seven small sawmills and Sotico.

To put the current shape of the industry in context, it historically had more nearly 40 sawmillers harvesting about 350,000cu metres.

If the future harvest is anything less than 140,000cu metres, it would threaten the commercial viability of Sotico, which is central to the Government’s plans for the industry.

This was highlighted last December, when Premier Geoff Gallop said the Government had provided a ‘letter of comfort’ to Sotico based on its requested allocation of 70,000cu metres.

While the agreement was subject to completion of the FMP, failure to deliver 70,000cu metres would be a major setback for the premier. He described the agreement as a “big step” towards fulfilling the Government’s commitment to develop the furniture industry in Manjimup (see below).

Colli general manager Cesare Colli said he was not aware his firm was last in line for jarrah allocations.

“I know there is a queue,” Mr Colli said. “I haven’t been told if I am at the end of the queue.”

He said Colli, which employs about 100 people at its mill, needed at least 30,000cu metres to remain commercially viable.

Industry sources have estimated that, if Colli is forced to shut down, it would be entitled to a $20 million payout under the Business Exit Assistance scheme.

Mr Jupp said any payout to Colli would be additional to the $62.5 million the Government has already budgeted to spend under this scheme. The Government has previously acknowledged that further substantial job losses are expected in the timber industry.

Based on the ‘indicative’ yield of 140,000cu metres, the government expects a total of 1,000 job losses, according to Mr Jupp.

He said job losses to date as a result of the Saving our Old Growth Forests policy were 457.

With the benefit of guaranteed jarrah supplies and government financial assistance, Greenbushes and Nannup are two locations that have generated extra jobs.

The two mills employ just over 160 people, with many mill workers having been retrained to work in value added processing of timber.

Greenbushes has also benefited from the relocation of manufacturer Stallwood Furniture to the town. The Nannup mill is owned by Bayswater joinery firm M&B Sales, which has invested $1.5 million (matched dollar-for-dollar by government) in drying kilns and new processing facilities.