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Forico’s $10m investment in Tasmania in operation

A woodchip mill in northwest Tasmania formerly owned by bankrupt timber company Gunns, that had been lying dormant for five years, has swung into action. Source: ABC Rural

The new owner, Forico, spent close to $10 million on refurbishing the mill, which now has the capacity to produce about 1.5 million green tonnes of woodchips per year.

The Surrey Hills Mill in Hampshire, about 30 kilometres south-west of Burnie, commenced limited production of 4000 tonne in late July, which will quadruple by the end of August.

Forico CEO, Bryan Hayes, said the investment would see huge efficiency gains.

“We’ve had to completely refurbish this mill,” he said. “All the old equipment, all of the old electric drives and various pieces had to be refurbished.

“We’ve been demolishing sections of the mill that are no longer required, for instance the very large drum de-barker has been removed, and taken out long in-feed conveyer sections.

“The overall objective is to make this mill super efficient, low cost, so we can compete with the other woodchip suppliers around the world.

He said Forico’s future was about far more than woodchips to make paper products.

“We’re entering the bio-era where wood is becoming far more versatile in terms of what can be made out of the cellulose molecule that is in wood fibre,” he said. “It has multiple uses around the world, bio-energy, bio-plastics, are becoming far more advanced as technology develops around the world.

“We’re actually growing bio-mass for the future.”

Forico is also investing about $6 million into the refurbishment of the Longreach Mill on the Tamar River, in the state’s north-east.

Sydney-based investment fund New Forests bought up the assets of insolvent Tasmanian timber company Gunns last year.

New Forests set up Forico as the forest manager of about 100,000 hectares of plantation and operator of Gunns mothballed woodchip mills.

Meanwhile, a University of Tasmania forestry professor hopes New Forest’s investment encourages more private companies to follow suit.

Member of Tasmanian Resources Minister Paul Harriss’ forestry advisory council, Dr Mark Hunt, said the agricultural sector also had an important part to play.

“There’s also opportunities to expand the plantation estate more generally,” he said. “Research has shown in many parts of the world that having a component of trees on the farm can provide a whole range of environment benefits and benefits to cropping or stocking.

“In some places 10% to 15% of a property could be under trees without any loss in revenue and immediate benefits to the production system.”

But he said a continued focus on research and development and training people in silviculture is vital to the industry’s future.

“Over the last decade as the forestry sector in Tasmania has retracted, many people have left, they’ve either moved…or simply gone and done other things,” he said. “And we notice that in research and development as well…it means that industry is slower at taking up opportunities that arise.

“There’s a need for training locally or an investment in bringing people into Tasmania to do the work, but they need some confidence that it’s not a short-term arrangement.

“Forico shown a genuine enthusiasm for research and development, that’s been lacking in Australia for many years, it is now seeing a bit of a resurgence.”

Forico has plans to re-plant upwards of 6000 hectares of eucalypt plantations a year and pump close to $20 million into refurbishing the woodchip mills.

The company, which is operating solely in the plantation sector, plans to export upwards of two to three million tonnes of woodchips into export markets including North-Asia in the next few years.