Pinetec's pallet making business sold

The part sale of the state's largest integrated pallet manufacturer Pinetec has offered some certainty to its employees, who have been offered casual employment during the 45-day settlement period.


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Staff have been told that Rodpak is buying the Pallet Machines, but not the Pallet Shed building and that the Sawmill will close in 45 if no buyer is found. Which in the reciervers words "seems very unlikey". This would stringly suggest the site will shut in 45 days with the loose of all jobs (67 staff). Issues relating to the state government are the main reasons a buyer has not been found: Forest Products Commission (FPC) made errors in calculating the haulage distance, avg should have been 108Km on 96000 tonne of logs. If the cost of the error is passed onto the company in full it will add substantial cost. FPC has increased price of small sawlogs by 9% since Oct 2008. There are ongoing problems with log quality and supply issues. Verve Energy are not paying the full contract price for Sawmill residues, this has a sserious impact on the viability of the company and is the main reason behind the recievers not finding a buyer. The reason Verve are not paying full price is there are technical problems in feeding the residues into the furnaces. Verve is being very slow to resolve these issue. Through a $2m grant to Pinetec and the reported $4m to date Verve has spent on infarstructure, the project has had $6m spent on it and is the largest biomass renewable energy project in WA. In 2007 43,000 REC credits were generated.

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