10/02/2011 - 00:00

State logs deal gets industry rolling again

10/02/2011 - 00:00

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Western Australia’s struggling hardwood timber industry has been given a glimmer of hope after sawmill operator Whittakers Timber Products struck a deal with the state government that will help it increase production and employment.

State logs deal gets industry rolling again

Western Australia’s struggling hardwood timber industry has been given a glimmer of hope after sawmill operator Whittakers Timber Products struck a deal with the state government that will help it increase production and employment.

The company said its investment in new milling technologies was key to the expansion, which contrasts with Gunns’ recent decision to close its Manjimup mill.

Privately owned Whittakers is expanding production at its Greenbushes sawmill and processing facility, 250 kilometres south of Perth.

Whittakers mills jarrah, karri and marri sawlogs, which are sold to the wholesale market in Perth and the eastern states. The company also exports to Japan, Sweden, Korea and China.

Director Trevor Richardson said the company was now one of the largest hardwood millers in the state, which has fewer than 10 other players.

The company has reached an agreement with the Forest Products Commission (FPC) to take an additional 14,400 tonnes of jarrah sawlogs for processing and converting into value-added products such as furniture feedstock, flooring and joinery.

Acting general manager of the FPC, David Hartley, said the deal with Whittakers was a positive sign for the hardwood industry.

“There are very optimistic signs in the timber industry and this deal with Whittakers is a good example of the optimism that is starting to re-emerge after a difficult period,” he said.

Mr Richardson attributes the stalling of the hardwood industry to the anti-logging legislation imposed by the Labor government seven years ago.

“The industry has been trying to work out solutions to the problem since 2004. Now the industry can negotiate commercial terms with the government and move forward,” he said.

Mr Richardson credits a large part of Whittakers’ success to state-of-the-art technology in which the company invested four years ago.

“Back in 2006-07, the company invested $10 million in a small-log processing line and, as logs have gotten smaller, the new technology has allowed us to handle a smaller resource,” Mr Richardson said.

Gunns told the market last month it would close its Deanmill jarrah sawmilling site in Manjimup on February 18, putting 44 people out of work.

“The government’s restructure of the timber industry in 2004 has resulted in a lower grade of log being received, together with the significant increase in the cost of a log resource,” Gunns chief executive Greg L’Estrange said.

Small Business Minister Simon O’Brien has responded by announcing a $70,000 support package for small businesses in Manjimup affected by the closure of Gunns’ mill.

“When a significant business in a regional town closes down, the ripple effect can be felt for some time, across a fairly wide area,” Mr O’Brien said.

As part of the program, business operators will be able to access grants of up to $1,500 to enable them to obtain financial, legal and accounting services.

Mr Richardson has indicated that Whittakers will be employing 33 additional staff at Greenbushes over the next year, a large jump from its staff of around 70.

He has stated he welcomes any experienced personnel stood down at the Gunns site to contact Whittakers about employment opportunities.

 

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