Forestry Tasmania confirms ownership of Southwood sawmill

Forestry Tasmania has confirmed it assumed ownership of the Southwood sawmill in mid June 2012. Michael Wood, Assistant General Manager Strategic Business, said Forestry Tasmania took upon ownership of the sawmill when the company that had purchased the mill from Gunns in April 2012 was unable to repay the short term loan made to it for this purpose by Forestry Tasmania.

“At that time the sawmill had not operated during the preceding twelve months as a result of Gunns decision to withdraw from native forest harvesting and to sell the sawmill as a going concern. Forestry Tasmania assumed ownership of the sawmill in fulfillment of the expectation of signatories to the Statement of Principles and Tasmanian Forestry Intergovernmental Agreement that the Southwood sawmill would continue to operate”.

“It had become clear that the private sector did not have the confidence to invest in the timber industry during such a period of uncertainty, and until the outcomes of the TFIGA are resolved.” Forestry Tasmania intends to divest itself of ownership of the sawmill, once confidence to invest in the Tasmanian timber industry has been restored.

“In the meantime, Forestry Tasmania’s ownership of the sawmill has secured the opportunity for the operator, NSFP Southwood, to continue to process eucalypt sawlogs under its long term supply agreement with Forestry Tasmania. “Forestry Tasmania expects to recoup the cost of its ownership of the sawmill within six months due to the revenue arising from the sale of sawlogs to the sawmill, together with revenue from the sale of other products harvested alongside the sawlogs.

“However, the economic benefits to the Tasmanian community are even more significant. While sawlog supply to the mill has a gross value to Forestry Tasmania of more than $4M per year, the value of sawn timber produced has a direct value to the Tasmanian economy of $15M per year.

“If indirect effects of the sawn timber production are taken into account, this increases to $20M per year. The additional value to the Tasmanian economy of other logs harvested alongside the sawlogs, including peeler logs and pulp logs, is more than $60M.”

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