Australasia's home for timber news and information

Redmond Sawmill’s $5m investment all for nothing

A timber company in the WA’s south is concerned their recent $5 million sawmill upgrade will place the business in major financial difficulty, following the State Government’s hardwood logging ban. Source: ABC News

Redmond Sawmill, north of Albany, has been processing hardwood timber of jarrah and karri for more than 20 years for local, national, and overseas customers.

Their most recent $5 million upgrade to its mill in late 2019 has left the company in major financial difficulty following the government’s snap decision to ban hardwood logging.

Last week, the government announced that, by 2024, timber taken from native forests would be limited to forest management activities that improve forest health and clearing for approved mining operations.

Managing director Corey Matters, who took over the business in 2015, said the upgrade will cost the business significant capital loss.

“We will not get to see the benefit of that investment, if we have to pack up; it’s going to be a $10-12million capital loss for sure,” he said.

“We had no idea this ban was coming.”

Mr Matters said he immediately placed a further $500,000 upgrade on hold following the announcement.

With other sawmills shutting down, he said he would be lucky to sell the equipment for one-fifth of its original cost.

“It will not have any retail value, so there won’t be too many interested buyers,” he said.

Speaking with the ABC South West, Forest Industries Federation of WA executive director Melissa Haslam said the industry was keen to see the ban overturned, but recognised it was unlikely.

“If it’s not overturned, I just need to make sure people are looked after,” she said.

Mr Matters said despite the announcement made last week, the government has yet again left them in the cold.

“The decision they’ve made is one thing, but the way they’ve gone about this and handling the situation to date has been very irresponsible in my opinion and poorly handled,” he said.

“We still don’t have answers for our customers and employees.”

By contrast, the convener of WA Forest Alliance, Jess Beckerling said the ban was well overdue and hardly a surprise.

“We have to protect the forest for climate and for biodiversity, and this decision could not have come soon enough,” Ms Beckerling said.

Ms Beckerling said new information released from Parliament this week revealing Parkside Group requested the government provide $25.8 million to help it continue operating shows that the timber industry was in decline and the ban was inevitable.

“This hasn’t come as a surprise to Parkside; they knew that it was unviable and they were planning to close their gates by the end of this year,” she said.

“That shows us all in WA and around Australia, native forest logging is not sustainable, it’s not economically viable.”

For Mr Matters, the worries don’t stop here.

He is concerned his 24 employees will face the consequences of the decision.

“Our workforce … would also start to look for alternative work outside of the timber industry,” he said.

“They’ll have to find additional work in whatever currently exists in Albany.”

With further clarifications yet to be announced by the State Government, WA Forest Alliance plans to grow timber within the south regions.

Ms Beckerling said this will allow the 400 employees in the hardwood timber industry to make a transition into a sustainable industry.

“There is no need for workers to be relocating, I think there is sustainable job opportunities within those regions,” she said.