Supply may cut timber hopes

DESPITE the pivotal role thrust upon it in the fight to grow the State’s timber industry, the furniture sector is struggling with a crisis of its own.

While there’s no shortage of effort to bring the industry up to speed, many believe that without an injection of funds from the State or Commonwealth governments, the furniture sector may slip back to its cottage industry roots.

As of January 1 next year under the State Government’s Forest Management Plan, the annual jarrah allocation will be reduced from 340,000 cubic metres to 131,000cu m. 

Jarrah is prized for its warm colouring, strength and cellular stability. Working with the wood’s unique features and capabilities, high-volume outdoor furniture manufacturers such as Clare Craft and Jenson Jarrah, and high-end fine furniture artisans, have levered out niche on the national and international furniture markets.

Faced with the drastic reduction in timber supply, a supply also required by the flooring and joinery industries, the industry is facing a watershed.

Only re-growth trees are to be logged under the Protecting Our Old Growth Policy. No longer will producers be able to craft thick slabs of jarrah into furniture. While most producers acknowledge that a reduction in old-growth logging is a positive step, some question the sustainability of logging only re-growth trees.

Forest Industry Federation president Bob Pierce likened the logging of only re-growth timber to a farmer who only takes the lambs out of his flock, leaving the older ones to grow old and die.

Timber from re-growth jarrah is smaller, of lower quality and lighter in colour. In short the industry, from the forest floor to furniture production line, needs to be dramatically restructured to process what will be a vastly different resource.

Across the board, industry members believe that more government support is needed to assist manufacturers implement design techniques, for research and development and to develop policy that drives and protects the industry.

Unfortunately the bulk of the State Government’s $132 million restructure package has been absorbed by business exit assistance packages. 

Despite the attention the Government placed on the future importance of a vibrant fine furniture industry, it only allocated $1 million to the industry for a furniture promotion. 

Only $5.5 million remains of the $11 million set aside to assist mills overhaul their facilities to process smaller, lower quality timber, improve recovery rates and implement more value adding facilities. This money is to be shared between the seven or eight mills still waiting for their timber allocations to be finalised. 

Mr Pierce said the problem the industry faced was that the finalisation of the timber allocations was so extracted, causing uncertainty for both mills and timber-related industries.

“The negative futures of the industry have been finalised; the positive futures have not,” he said.

The furniture industry is awaiting concrete news that Sotico, the main supplier of timber for the furniture industry, has received its requested allocation of 70,000cu m of jarrah.

Sotico has long supported the furniture industry and big players such as Jenson Jarrah, Clarecraft and Inglewood Product Group have built up large national and international markets underpinned by the volume and quality of supply from Sotico. 

With this in mind the three companies were quick to react to Wesfarmers’ announcement that it had plans to offload Sotico. In partnership with Sotico management, the companies spearhead a furniture consortium that aims to secure the mill and ensure that its jarrah allocation continues to be directed into the furniture industry.

With Sotico’s price tag at more than $30 million, the consortium cannot do it alone.

Furniture consortium chairman Ewald Valom said the group was currently in discussions with the State and Commonwealth.

If Sotico received its requested allocation and the consortium secured the mill, he said, it would mean big things for the industry.

Under the plan, both the Yarloop and Manjimup mills would process the allocation however, all timber would be brought back to Manjimup to be processed in a high technology, high value-add furniture precinct.

There is talk of Clarecraft, Inglewood Products and Jenson Jarrah shifting part of their operations to Manjimup to take advantage of what will be 25,000cu m of high-quality timber in a single location. 

“The creation of 300 to 400 jobs is not overly optimistic,” Mr Valom said.

But if funding was not forthcoming to fund purchase of the mill, he said, and the industry did not secure resource security, the sector would degenerate into a small-scale cottage operation.

“It is going to be a watershed at the end of the year,” Mr Valom said.

Inglewoods Product Group founder Dino Gossatti said if the consortium managed to secure Sotico, the industry could look forward to a successful future.

“We are currently producing 20,000 chairs and we are forced to waste 20 millimetres of wood per metre,” he said.

“The future of Sotico is to cut market specifications for the requirements of the furniture industry.”

Another danger facing the industry is the export of jarrah to countries where it can be cheaply manufactured and sold at a significantly lower price than the WA-made equivalent. 

At the recent Spoga Exhibition for outdoor furniture in Germany, which attracts producers from all over the world, there was an exhibition of jarrah furniture that had been manufactured in Vietnam, and undercut the WA product by 40 per cent.

Timber mills are required to value add the resource but beyond that there are no obligations to place the resource into the hands of local manufacturers, another reason for the furniture consortium to secure Sotico and, in turn, secure the future on the industry.

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