After being closed for the past two years, the Gunns woodchip mill at Longreach in Northern Tasmania is once again open for business. Source: ABC News
Gunns closed the mill in 2011 before going into administration in 2012 but the receivers and managers of Gunns limited, Korda Mentha, have reopened the mill after securing new contracts with Japanese customers.
Receiver Bryan Webster says the first load of woodchips will be shipped to Japan next month.
“We’ve got about 10 ships locked away between post-appointment and through to March next year,” he said.
Gunns’ general manager of forest products Bryan Hayes says the contracts to send woodchips to Japan have been negotiated with old customers.
“Provided we could give security of supply, those customers have been happy to come back to us,” he said.
The wood is coming from 40,000 hectares of Gunns-owned plantations in the north-east and north-west of the state.
Webster said re-opening the mill has allowed Gunns to employ 100 new contractors.
“Prior to appointment there was approximately 20 contractors employed. Now there’s about 120, so they’re involved with the harvesting, haulage, chipping of the woodchip logs as well,” he said.
Some of the contractors delivering wood to the mill are old hands, like Donald Beams. He has been working for Gunns for 41 years.
“We had the obviously existing gear, and if we didn’t have that you wouldn’t buy machinery to go into it, as in buy new machinery or setting up leases. We’re just hopeful that something, it’ll come up. It’s – I suppose you grab whatever you think you can, within reason,” he said.
But the re-opening of the mill has not helped a Tasmanian businessman who makes trailers for log trucks.
Graeme Elphinstone’s business has gone down by 80% in the past two years, and he has had to put off 12 staff.
Elphinstone said contractors are not buying new equipment, because the future of the forest industry is so uncertain. He said: “people get awful nervous about spending money on short term futures or where they have no control of their future. And also the finance companies are very nervous because a lot of them have been burnt through this whole issue. Ideally we need a pulp mill.”
The pulp mill site is right next door to Gunns’ Longreach woodchip mill. But the future of some of the plantations that were going to feed the mill is being debated in the courts. And without a wood supply locked in, Webster cannot say when Australia’s biggest pulp mill project will go on the market.
“There’s a lot of complexities around the pulp mill and the timing of when that may be taken to the market,” he said. “That’s all wrapped up with what’s happening in the courts at the moment and the trees associated with the managed investment schemes.
“At the moment it’s not clear whether some of those schemes will be continuing. ”
Webster said that Gunns owns enough trees to keep the woodchip mill going for at least 15 years.
