Whittakers Timber Products almost halved its 100 strong workforce, while Boral is restructuring its timber business and The Australian Forest Products Association (AFPA) is concerned at the loss of Australian jobs. Source: ABC South West WA, 4-Traders, Timberbiz
“We had some indications that the mill was having some financial challenges over a period of time,” said Forestry Minister Terry Redman who is also the Member for Warren Blackwood.
The government, through the Forest Products Commission, had been working “closely” but ultimately unsuccessfully with the company to resolve the situation.
The redundancies will be put in place over the next five weeks.
The mill owners face a number of challenges, he said.
“First of all, the economic backdrop. If you take out the resources sector, the economic backdrop is pretty challenging right now. It’s not only the timber sector in the South West that is facing economic challenge,” said Redman.
In addition, timber has its own peculiar circumstance to deal with. Mills are moving into regrowth forest and having to make adjustments in gear and equipment to handle smaller logs.
Forest resource is allocated to mills on a 10 year forest management plan which is almost at the end of it cycle.
According to the Minister, the government has attempted to support the Whittakers Mill.
“A number of the mills, including Whittakers, have investment security guarantees, a decision that government has made.”
Those guarantees should engender confidence in making investments, states Redman.
“Even though there’s still a short time to run, they would get compensated if they didn’t the resource they were entitled to.”
Whittakers had benefitted when Deanmill operator Gunns were looking to leave the region.
“We were able to provide more timber to Whittakers and that was certainly helping their bottom line,” said Redman. However, he said that with Deanmill increasing output, pressure is again placed on the resource.
Redman parried criticism from the Forest Products Commission that uncertainly over the quality of logs would have been a factor in Whittakers’ decision to cut back production.
“It’s been known that, over time, we move into regrowth forest.”
Probably 65% of the current reserves are not available for harvest, he said.
“The remainder are regrowth … and we’re going back into those in a sustainable way. Therefore, we’re picking up a smaller diameter log, a different style of resource.
“This is generally a known quantity. What they’re finding is that that’s actually quite challenging.”
The government will work with the Bridgetown Greenbushes Shire to ensure that the displaced workers will have access to advice and training courses, said Redman.
“I believe that the native forest harvesting sector is a long term sustainable industry that we can have driving significant employment in the South West,” he said.
Boral announced further restructuring of its timber operations, which will assist the business improve its competitive position at a time when earnings have been under significant pressure.
On May 6 this year, Boral reported to shareholders that earnings from Boral Timber had continued to decline.
In response, a range of restructuring and cost reduction initiatives continued and the following newly announced initiatives would add to these restructuring efforts.
With all this going on the Australian Forest Products Association has expressed its concerned at the loss of Australian jobs across the industry with the two announcements of industry restructures on two consecutive days.
“The redundancies in WA from one of the state’s largest timber mills and the job losses from Boral Timber in NSW will impact on regional employment and have the potential to undermine the social fabric of these tight-knit communities,” said Ross Hampton, CEO of AFPA.
“Sustainable native timber forestry has been, and will continue to be, a vital part of Australia’s regional life providing economic and community benefits as well as multiple use conservation outcomes.
“When we discuss meat consumption we applaud those who advocate a no waste, ‘nose to tail’ approach. However, some fail to appreciate the same positive approach to the fibre we sustainably harvest from our trees.
“Woodchips, mill residues and indeed biomass for renewable energy are important parts of sustainable native forest management.
“Better policy for the use of native forest residues as a source of renewable energy would help industry competitiveness and better protect jobs in regional Australia.
“The distress felt by families reliant on incomes from this renewable and carbon neutral industry deserves compassion.
“Both Boral Timber and Whittakers Timber Products deserve our gratitude for minimising the impact on regionally based communities during challenging economic times,” said Hampton.
