04/03/2009 - 22:00

Pinetec’s problems may boost business

04/03/2009 - 22:00

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THE possible closure of one of the state's largest integrated pallet manufacturers, Pinetec, could prove to be a boon for the local industry with one player keen to keep jobs in Western Australia.

THE possible closure of one of the state's largest integrated pallet manufacturers, Pinetec, could prove to be a boon for the local industry with one player keen to keep jobs in Western Australia.

Within two weeks, Pinetec's 110 employees will find out the fate of their jobs from receivers PricewaterhouseCoopers.

PwC receivers Derrick Vickers and Stephen Longley last month told employees the company, which operates a plant next to the Muja power station in Collie and another in Bassendean, would only last a month unless a buyer for the business was found.

If a buyer could not be not found, PwC said, many large WA manufacturers may need to source alternative pallet supplies from the east coast or overseas.

However, Aussie Crates owner Russell Miller believes differently, expecting business to stay in the state and other local players to pick up the shortfall in pallet manufacturing.

"[Pinetec's closure] would have a positive effect on the remaining players in the industry, with Aussie Crates a big beneficiary because Pinetec was probably the biggest manufacturer of pallets in WA," Mr Miller said.

"So you take the biggest player out of the industry and then that business has got to be satisfied somewhere, so it would obviously be spread among the remaining players in the industry."

Welshpool-based Aussie Crates, which makes pallets to order, has 2,500 clients in WA and employs 32 people.

Jason's Pallets manager Kerryn Cordina said the business had already experienced an increase in queries, particularly from Pinetec customers.

"[Demand's] not inclined but we've definitely had a lot of people look at other options because they are with Pinetec ... and that's just happened in the last month or two months," Ms Cordina said.

She added that if Pinetec were to close, it would be a "big bonus" for the Kewdale-based company, which has 600 clients and employs 15 people.

Mr Miller said if Pinetec were to close, Aussie Crates would consider employing a number of Pinetec workers.

"We've certainly got the capacity to take on extra work and build extra pallets to meet the shortfall," he said.

Meantime Ms Cordina said while demand for pallets had softened in the current economic climate, she expects Pinetec's clients, should they head to Jason's Pallets, to pick up the shortfall.

In a statement emailed to WA Business News, Mr Longley said the local pallet making industry would be one option for Pinetec customers.

He added that talks with several interested buyers were continuing.

"We continue to talk with interested parties to try and find a buyer for the business as a going concern," he said.

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