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Monday, January 16, 2006

$60m deal for mills

$60m deal for mills ]

A MALAYSIAN timber company will invest $60 million in Tasmania over the next two years on two new mills to process value-added wood products within the forests where the eucalyptus hardwood is grown.

The two separate plywood veneer processing mills will be built by Ta Ann Holdings in the Huon Valley near Judbury and at Circular Head in the state's North-West, near Smithton.

A key part of the Malaysian company's interest in Tasmania is the guarantee it will be able to give to its Japanese, Korean and European customers that only regrowth timber grown sustainably by Forestry Tasmania will be used in making the plywood.

Under the deal signed yesterday by Premier Paul Lennon and Te Ann Holdings executive chairman Hamed Sapawi, the first $30 million rotary peel veneer mill will be operational in the Huon within a year.

Mr Lennon said 120 jobs would be created during construction of the Huon mill, with 50 long-term permanent jobs at the completed mill

Construction of the Circular Head plant will start in April next year, with a similar number of jobs created.

Mr Lennon claimed the investment as a victory for Tasmania, marking an end to conflict over Tasmania's forests.

The Premier said the deal showed international timber companies had confidence that the right balance had been struck between protecting and harvesting Tasmania's forests by such landmark accords as the Regional Forest Agreement.

"The fact we have been able to settle down the environmental debate in Tasmania is the key reason [the Malaysian company] has made this investment," Mr Lennon said.

"This is timber that would otherwise have been sent to woodchips. This is the best form of value-adding we can have."

The timber to be used in the value-adding process will all be smaller young pulpwood logs that otherwise would have been trucked and exported as low-cost woodchips from Gunns mills at Triabunna and Burnie.

Forestry Tasmania chief Evan Rolley says that by converting the pulpwood logs to plywood at the Huon Wood Centre site at Southwood and at the Circular Head Wood Centre, 30 per cent less timber will be exported as raw woodchips.

The increase in revenue gained from the sale of the veneer logs will be even greater than a 30 per cent boost.

Mr Rolley also highlighted the public safety benefits of the deal.

Once the Huon mill is operating, many fewer laden log trucks will need to drive from the Huon forests to the Triabunna woodchip mill and port, passing through central Hobart on their way.

The new plywood mill will also mean the end of the export of small "peeler" logs lining the Hobart and Bell Bay wharves for export.

The wood supply agreement between Te Ann and Forestry Tasmania guarantees the supply of 150,000 tonnes of eucalyptus regrowth pulpwood annually from State Forests to the Huon mill for at least 10 years.

Under the second Circular Head wood supply agreement, a further 115,000 tonnes a year of regrowth wood will be supplied to the new Smithton veneer mill.

Forestry Tasmania will invest $2.5 million in the rotary peel veneer mill, with its 10 per cent equity stake to be sold within three years.

It will build a state-of-the-art "merchandising" yard alongside the veneer mills at both wood centres, where all pulpwood logs will be brought from the forest logging sites and electronically scanned and measured for optimal use and sale price.

Ta Ann executive chairman Mr Sepawi admitted there had been great haste to make the announcement yesterday, pointing out that the $30 million Huon mill is in the Premier's electorate of Franklin and the Circular Head mill in the electorate of Forests Minister Bryan Green.


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