Peak industry body Timber Queensland said the unfortunate circumstances that triggered Toowoomba based NK Collins Industries to call in administrators after 65 years of operation could also cause other sawmillers to follow suit. Source: Timberbiz
Timber Queensland’s CEO Rod McInnes said local timber businesses were being pushed to the wall.
“Industry is doing it tough, real tough and is on a knife-edge regarding costs. The spectre of further raw material increases by way of increased State Government royalties does not bode well for our industry’s future,” said McInnes
Timber Queensland said the cypress industry received very welcome 25 year supply agreements from the State Government earlier this year, which will underpin future log supply. Prices (royalties) were adjusted from January 1 when the 25-year supply agreements came into force.
“Now the Government is seeking to further increase royalties in an attempt to use their monopoly supply powers to force a further increase – just because they can. They’ve even engaged accounting giant Ernst & Young to assist them in this process,” said McInnes.
“Now is not the time to bully industry into paying more royalty,” he said.
“The Government should let industry consolidate and wait until the market improves before gouging further increases. We already have a pricing formula, which sees royalties increase as market prices increase.
“Other mills may follow NK Collins into liquidation if the Government doesn’t pull its head in on this issue.”
The administrators of NK Collins say it is possible some of the 40 staff will keep their jobs.
Terry Van Der Velde from SV Partners said that they are trying to minimise job losses by looking for buyers for two sawmills in the southern inland.
“What we’re trying to do is secure sales of different parts of the business,” he said.
“For example the head office in Toowoomba – we are in preliminary discussions with an interested party.
“Now if they take that over which is our hope – too early to say if they will or they won’t – but if they do, then the intention of the purchaser would be to retain employment of all those people on the site.”
Van Der Velde said the company is not in a position to trade its way out of difficulty.
