South Australia’s Opposition said that 1000 jobs are at risk after a warning by New Zealand timber company Carter Holt Harvey that its Mount Gambier mill facilities cannot continue incurring losses. The company said it would close its four operations in Mt Gambier and Nangwarry if a new contract with Forestry SA was not struck. Source: ABC News, Adelaide Now
Carter Holt Harvey has sent a letter to its employees saying imported timber has gained substantial market share, leading to a significant decrease in timber prices.
The company said it has been negotiating with the State Government for more than a year, but it could not continue to lose millions of dollars.
It also says forest operators like the State Government-owned Forestry SA have continued to increase the price of logs.
The company indicated that its mill facilities are losing millions of dollars while Forestry SA is making millions.
Carter Holt Harvey said that without a renegotiated contract with Forestry SA “the losses will force the closure of the mills and the decimation of the industry they support”.
“Carter Holt Harvey will not be put in a position where our losses, which form part of Forestry SA’s profits, are capitalised and sold by the State Government, leaving us to resolve the problem with a new forest owner,” the company’s general manager timber Ian Tyson wrote in the letter.
“The destiny of the Mt Gambier facilities and the shape of the forestry and wood processing industry in the South-East is in the hands of Forestry SA and its owner, the South Australian Government.”
Mr Tyson said the company had comprehensively briefed State Treasurer Jack Snelling and Forestry Minister Gail Gago about the need for a log price reduction.
The company said it had allowed its books to be reviewed by the Government to prove that the price reduction was necessary.
The Opposition’s economic development spokesman David Ridgway said management and union representatives had met with employees.
“They locked the gates, ceased delivery so they could actually talk to the staff and laid it on the line that we are facing a very serious set of circumstances,” he said.
“The Government just seems to be oblivious to it. They’re hell-bent on selling the forests, taking the cash and turning their back on the people of the south-east.
“They’ve actually gone to the Government with a proposal to link the log price to the price of sawn timber, and the Government has rejected that.
“Now we see there’s 1000 jobs at risk, direct jobs, and many other flow-on jobs at risk. It’s time for the Premier to intervene.”
The company says it has started discussions with the Forestry Union (CFMEU) and Australian Manufacturing Workers Union about the future of the mill.
