BLUE GUM ALLIANCE A CONFIDENT SIGN
The export hardwood woodchip industry in the Green Triangle Region has received a major injection of confidence with Australian Bluegum Plantations (ABP) and South West Fibre announcing a 10 year alliance involving up to 1.2 million tonnes of blue gum per year.
Negotiations for the major deal have been ongoing between the parties since ABP assumed control of the former Timbercorp’s forestry assets last year.
It is understood the alliance shuts one of the resource doors available to the proposed Penola pulp mill project.
In a joint announcement South West Fibre manager Steve Walker and ABP managing director Tony Price said the alliance would “facilitate harvesting, haulage, processing and marketing of up to 1.2 million tonnes per year from ABP estates in the Green Triangle Region”.
“Combined with existing supply arrangements, total export volume available from South West Fibre (in) Portland is now up to 1.8 million tonnes per year until at lest 2020,” they said.
“The supply and marketing alliance establishes the first fully integrated forest to market supply chain for industrial scale blue gum in the Green Triangle Region.
“It is an exciting development for both companies and for the regional economy.”
Mr Walker said the woodchip mill at Myamyn could easily handle the increased resource.
It is also understood GrainCorp which handles woodchips from South West Fibre’s Myamyn mill and infield processing facilities, is set for major expenditure of a new chip leader at the Port of Portland in the near future.
ABP and South West Fibre listed the major benefits of the alliance as being, in part, a large scale forest resource, long-term supply security, processing capacity, uniform chip quality, export infrastructure and a forest to ship solution.
Source: The Portland Observer - 30/07/10
BLUEGUM FORESTRY ESTATE ON MARKET
Just over a year after its collapse, Great Southern’s bluegum forestry estate is up for sale by the company’s receiver, McGrathNicol, but a deal will probably not be finalised until the end of 2010.
McGrathNicol has begun a formal sales process for 269,000 hectares of freehold forestry land located mostly in the Green Triangle region of south eastern Australia, along with parts of Western Australia.
Construction, Forestry, Mining and Energy Union spokesperson Brad Coates said it would be business as usual in the South East’s forests, with the future depending on a number of factors.
“The changes and their impact depend on a lot of things, like who buys it and whether the pulp mill goes ahead,” he said.
“The sale will make no short-term difference, however long-term it may change things.”
However, with depression occurring in the chip market it was not a good time to sell, according to Mr Coates.
Limestone Coast Regional Development Australia chief executive Grant King said the sale would merely represent an ownership change and the important objective was that the plantation acquired stability.
“From a regional point of view, we hope the bluegums are treated as an asset by the new investor and they make them available to the market place and drive its potential,” he said.
“We will have to sit and wait to see who picks it up and hope that we will continue to have access to its economic benefits.”
McGrathNicol’s Tony McGrath said the receiver’s priority would be to ensure the sale process maximized both value and certainty for all stakeholders, including the investor growers and secured creditors of Great Southern. He said the resource was ideally located for the key export markets of Asia, in particular Japan and the fast growing Chinese market.
“The initial bids are due in late July and we will continue to update the market at regular intervals as the sale process continues
Source: The Border Watch - 16/06/10
UPBEAT FORESTRY OUTLOOK
The value of forestry to the South Australian economy is expected to increase above $2.6 billion as bluegum harvesting ramps up and new projects come on stream.
Forests Minister Michael O’Brien gave the upbeat forecast at the National Association of Forest Industries (NAFI) board and policy dinner in Adelaide.
“It is estimated that the forest and forest processing industry is responsible for the employment of nearly 13,000 people directly and indirectly in more than 630 businesses in South Australia,” Mr O’Brien said.
“In terms of dollars the industry is worth $2.6 billion and this is likely to increase as bluegum harvesting ramps up, leading to growth in exports, and developments take shape such as the proposed Penola Pulp Mill and the renewable energy pellet mill in Mount Gambier.”
Source: The Border Watch - 15/06/10
TIMBER CONFIDENCE GROWS
The South East’s $1b timber sector is beginning to show signs of climbing out of a three year downturn, with some major companies beginning to hire new people.
While the sector – which has lost 250 jobs in the past three years – is beginning to dust off its troubles, a timber leader has warnED it will take some time before it will return to its former buoyancy.During the past three years, the industry has been reeling from the mothballing of the Cartor Holt Harvey Dartmoor mill and the loss of 130 jobs at Nangwarry.Forestry union spokesperson Brad Coates said it appeared the industry was beginning to turn a corner with Cartor Holt Harvey employing 25 new people at its pine mouldings site in Mount Gambier.His comments come in the wake of a major government report revealing that the global financial crisis and a sharp decline in the Australian housing industry cut $130m from the sector in 2008-09.“While things have started to improve, we still have some way to go to be where we were three years ago,” Mr Coates said.He said he hoped the period of consolidation by forestry companies and subsequent job losses were now behind the industry.“We know the forestry companies are beginning to employ more people,” Mr Coates said.The union boss said it was great to see Cartor Holt Harvey beginning to employ new people, particularly at its pine mouldings site, which that had seen a rise in demand for its products.While imports were still impacting demand for pine moulding products made in Mount Gambier, he said the falling Australian dollar would help to lift the sector.He said the long-term future of 30 workers left employed at the downgraded Cartor Holt Harvey site at Nangwarry was also beginning to improve.“At this stage the situation is looking promising,” said Mr Coates, who explained the employees at the site appeared busy.But he conceded the industry had experienced hard times in recent years.Mr Coates said the value of woodchip exports in the region fell because of the weakening Japanese economy during the economic downturn.“But woodchip exports are starting to improve,” he said.According to the ABARE report released last week, the global financial crisis and a sharp decline in housing activity was still being felt in many forestry regions.The report revealed that investment in forestry, log harvesting and forest product exports all suffered setbacks in the past financial year.“Much of the decline was lead by weak demand for Australia’s woodchip exports and more than 80pc of these go to Japan,” ABARE deputy executive director Paul Morris said.“The collapse of two major managed investment scheme companies also contributed to a reduction in new plantation establishment from 72,000ha in 2008 to 50,000ha in 2009.”He said domestic demand for structural timber products declined due to weak housing starts.But he said there were signs the industry was turning around.“There are signs of recovery in some export categories,” Mr Morris said.“Exports of veneer continued to increase, China’s demand for woodchips continued to grow Plantation Energy exported its first significant shipment of wood pellets from its new West Australian plant to the European market.”A similar wood pellet factory is planned to be built in Wandilo, near Mount Gambier.
Source: The Border Watch - 04/06/10
CHINA TARGETS GUNNS FOR POTENTIAL TAKEOVER
The possible takeover of woodchipper Gunns by a leading Chinese plantations developer could have a positive impact on the forestry industry in the South East, according to experts.
Speculation has surfaced that the Chinese firm Asia Pacific Resource could be interested in securing Tasmanian timber giant Gunns, which took over Auspine in 2007, while other companies, including Asia Pulp and Paper, Hunan Tiger and Chenning are also showing interest.
Industry spokesperson and General Manager of Plantation Timbers John Kellas said a takeover could increase the demand for woodchip in the South East.
“The industry has been waiting for an increase in demand and Asia Pacific and other Chinese firms are interested in bluegum for the production of woodchip,” Dr Kellas said.
“With Portland nearby, where woodchip is shipped from, the infrastructure is in place.”
Robert Eastment, a director of Industry Edge, economist and forester from Tasmania, said a takeover could only be good for the forestry sector in the South East.
“The Chinese firms are after woodchip and that is what is being produced in the South East,” he said.
“That means the production of bluegums will continue.”
Both Dr Kellas and Mr Eastment said a change would not impact negatively on employment in the sector.
Shares in Gunns have fallen dramatically in recent times and the company posted a net profit for the six months to December 31 of $400,000, down from $33.6m in the prior corresponding period.
However, shares have soared since the speculation of a possible take-over has surfaced – along with the announcement of the retirement of Gunns chairman John Gay.
Last week, Gunns shares surged from 39 cents to 53 cents and this week American brokerage company Morgan and Stanley bought 49 million Gunns shares.
Source: The Border Watch - 04/06/10
INDUSTRY GROWTH POTENTIAL REMAINS DESPITE COLLAPSES
The South East has been left with a valuable plantation recourse after rapid planting under managed investment schemes over recent years, according to a forestry spokesperson.
“Expansion was simply too rapid, which ultimately led to competition for land and forced prices up,” Plantation Timber general manager John Kellas said.
“But the wash-up from MIS is we have almost 350,000 hectares of pine and bluegum plantation across the region, which is significant and just under 20pc of Australia’s plantation estate – that’s a recourse from which viable industries can operate.”
Dr Kellas said the industry has now “consolidated” following the collapse of Great Southern and Timbercorp, but rejected claims forestry was given support beyond other agriculture sectors.
“It was people investing their own money in commercial enterprises, which all have ups and downs,” he said.
“Those plantations are now managed by companies that have their main focus on forestry production.”
Gunns has taken control of the former Great Southern bluegums as the new responsible entity, while Australian Bluegum Plantations has acquired the Timbercorp estate.
Dr Kellas said employment levels had altered little in the bluegum sector under the changes, with many people employed by the former managed investment scheme operators picked up by the new companies.
However, he said the long anticipated bluegum harvest would remain at low levels until the world economy strengthened and export facilities were completed at Portland, although ships were regularly leaving the south-west Victorian harbour with loads of Green Triangle hardwood chips.
“There is a bit of activity at the wharf, but it is hard to say whether that is things picking up or new markets being found,” he said.
“World demand is going to be the driver for bluegums, so it will still be a matter of waiting.”
Meanwhile, he said bluegum planting continued in the region under managed investment schemes, but not at the rapid rate of the past, and the new managers of plantations would decide where to replant second rotations after the harvest.
“But people are still prepared to invest in the long term.” He said.
Source: The Border Watch - 19/02/10
CONSTRUCTION OF NEW CHIP FACILITY STARTS
Gunn’s hardwood chip export facility construction began last week in anticipation of receiving chips and shipping them out in the last quarter of this year.Portland’s Mibus Brothers began earthworks at the site of a former log storage facility at the north-west end of the Port of Portland’s land, in front of the port’s administration office, in preparation for the construction of a large shed, port commercial general manager Jim Cooper said.The shed will be built on four hectares of leased port land and will store chips from the region’s blue gum plantations, including those from Gunns Plantations-managed properties in the Greater Green Triangle Region, once it is operational.Mt Gambier-based Gunns resources general manager Phil Loyd said Gunns would manage the construction project, and would be using mainly local contractors. Expressions of interest are currently being sought for various stages of the building.The finished facility would have an estimated annual throughput of 1.5 million tonnes, and would be scalable to 2.5 million tonnes if an additional building were added on.“That’s in addition to the 0.5 million tonnes of softwood chips that we already export annually,” Mr Loyd said.He said it was too early to tell what volume of chips they would draw from their recent acquisition of management rights to 44,000 hectares of plantations from Great Southern, but he expected chips from other plantation owners such as Australian Bluegum Plantations (formerly Timbercorp) and ITC Timer would have to be handled by them or their competitor, Graincorp.The facility represents a significant ramp-up in woodchip handling from Portland, with port chief executive Scott Paterson previously telling the Portland Observer the port’s two hardwood storage sites would be handling more than “three million tonnes of plantation grown blue gum hardwood chips per year from 2011.”“Currently the port can only handle one quarter of this volume,” he said.
Mr Cooper said the port’s entrance road would be reinforced to cope with the new heavy vehicles delivering the chips.
Source: Portland Observer - 29/01/10
NEW BIOMASS PELLET PLANT BEING CINSTRUCTED IN AUSTRALIA
Plantation Energy Australia has announced it is constructing a AU$25 million wood pellet plant at Wandilo, near Mount Gambier in South Australia, with production expected to begin in March 2010. It is estimated that AU$40 million will be injected into the local economy annually. Approval for their second project (the first one is near Albany, WA) follows Plantation Energy signing a AU$70 million export agreement with Belgium's Electrabel with the aim of producing up to 500,000 tonnes of wood pellets per year at its South Australian plant.
Source: Friday Offcuts - January 2010
www.fridayoffcuts.com
FORESTRY REVIVAL
Strengthening of the world economy is leading to recovery in the timber sector with production cuts and job shedding replaced with optimistic re-hiring and ramped up activity, according to an industry spokesperson.
Construction, Forestry, Mining and Energy Union South East leader Brad Coates said there were signs the construction industry was “starting to bounce back a little bit”, particularly in the domestic housing market.
“Demand for framing timber for housing has certainly increased, but there are still areas of the chip market that are reasonably depressed,” he said, adding this impacted on the transport sector, and demand for round product, such as treated posts, was also low.
“But the two main Carter Halt Harvey saw mills and Tarpeena mill are cutting at full production and looking to have short Christmas breaks, in some cases just a week, because of demand.”
Mr Coates said production was at a vastly different level to this time last year when Christmas breaks were extended to a month, Easter shutdowns were also blown out and some sites enforced a mid-year shut.
“Now they are all working Saturdays, Sundays and overtime in the sawmills and hiring staff, which is good,” he said.
“The trend toward redundancies has stopped for the time being and people are starting to have the confidence to rehire people.
“However, the confidence is still not completely back and people expect a blip at some stage next year once the stimulus packages and things like that wear off, but we’re certainly in a better position now than 12 months ago, so hopefully we’ve weathered the worst of the global economic crisis.”
Domestic housing activity decreased by 17pc in the financial year to June 2009, affecting domestic consumption of structural wood products, according to ABARE’s biannual Australian Forest and Wood Products Statistics report, released yesterday.
Production of wood-based panels, excluding veneer, was down 7.7pc, with a similar effect expected in the sawnwood sector.
Forest product exports, which remained strong in the first half of 2008-09, also suffered large declines in the March and June quarters of 2009, leading to an annual fall of more than 5.2pc to $2.3b.
This was mostly a result of a 7pc fall in the value of woodchip exports, which fell below $1b, with volume down 15pc.
Mr Coates said that while the industry was now recovering, the Green Building Council must take action to accredit domestic sustainable timber products for six-star green building credit rating to support demand and protect jobs.
“We are still seeing a lot of imported timber coming in from developing countries with a history of flouting sustainability laws and not following the environmental and human rights standards Australia does,” he said.
He called on state ministers to take up the issue as currently “six star” timber products must be sourced from overseas.
Source: The Border Watch - 11/11/09
Source: The Border Watch - 20/10/09
BLUEGUM FIRE THREAT CONCERNS
Penola man Duan Butler has called on Wattle Range Council to enter discussions tonight about how to deliver a safer environment for residents during the approaching fire season, claiming the spread of bluegum plantations across the region over recent years has led to increased hazards.
Mr Butler has written to council’s mayor and chief executive, calling for his letter to be tabled and talks to begin at tonight’s meeting after he raised planning concerns with the state ombudsman.
“With the collapse of Timbercorp and Great Southern the ratepayers and residents of the Wattle Range Council are left with an unmanaged, uninsured and poorly planned hardwood plantation area,” he wrote.
“It would have been far more sensible to have the appropriate fire protection measures in place with the original developers.
“Any future investors in the hardwood plantations would inherit the responsibility of rectifying the inadequate fire protection measures I deem exist.”
Mr Butler claims he cannot find any plantations in the council area with 20-metre external firebreaks, despite this being a condition of council’s principles of development controls for plantations of more than 100 hectares.
One example he claims is planted to within seven metres of the road boundary and cites other approvals allegedly granted despite CFS claims of serious deficiencies with associated fire management manuals.
“My farming property and home are situated to the south east of the extensive plantings of bluegums in the Wattle Range Council area,” Mr Butler wrote.
“During the Ash Wednesday fires of 1983, when there were no major plantings of hardwood in the area, my property narrowly avoided the carnage.”
He said there was now a higher risk of major fires due to failings of the council’s planning approval processes.
Wattle Range chief executive Frank Brennan said council had responded to the ombudsman’s office about Mr Butler’s concerns and he did not expect the issue to be discussed at tonight’s public monthly meeting.
“From council’s perspective, the answers to the ombudsman were satisfactory,” he said, adding councillors were unlikely to discuss the matter, which would instead be dealt with by administration staff.
Mr Brennan said council’s key concern was the ability for proper fire safety regimes to continue within plantations following the collapse of Timbercorp and Great Southern.
He said there was not time to review all applications mentioned in Mr Butler’s “scattergun approach” to the issue, although a broad response had satisfied the ombudsman.
Mr Brennan said plantations growing today could not be assessed against today’s development plans as changes had been made since some were established and new requirements could not be retrospective.
“Each application is considered on its merits and within the constraints of the plan at the time,” he said, adding existing use rights had also led to replanting of plantations under old regulations,” he said.
“To apply the current development plan to all the plantations today is nonsense.”
Source: The Border Watch - 08/09/09
GUNNS' SIGHTS ON BLUEGUMS
Tasmanian timber giant Gunns has publicly confirmed speculation it will seek to expand its growing forestry venture by acquiring a stake in the assets collapse managed investment scheme companies Timbercorp and Great Southern.
Gunns announced a $56.2m full-year profit to the Australian Stock Exchange yesterday, a decline of 4.9% on the previous year.
In his report on the 2009 financial year, chairman John Gay revealed Gunns was actively working on proposals to play a role in ongoing operation of assets managed by Timbercorp and Great Southern Plantations.
Such a move by Guns would follow its takeover of softwood company Auspine early last year, increasing its stake in the South East.
“Significant opportunities for expansion of the group’s interest in the Australian forestry sector are arising, primarily through the restructure of the MIS sector,” Mr Gay said.
“Gunns is well positioned to capitalise on opportunities that may become available and is assessing several opportunities to diversify and expand its forestry operations.”
A spokesperson for Gunns declined to elaborate on what type of proposal would be made regarding the failed companies or whether a move into the region’s major bluegum estate would lead to Gunns investing in the Penola Pulp Mill.
He said the company would investigate gaining a stake in the assets before considering their future use.
Pulp mill developer Protavia has long sought an agreement to use chips from Timbercorp’s plantations to sustain its planned $1.5b mill.
Mr Gay’s announcement also revealed Gunns had acquired ITC Timber, a subsidiary of Elders Limited, for an enterprise value of $100m.
The timber processing division of ITC hold mills in Victoria and Tasmania, as well as a 50% stake in Smartfibre Pty Ltd, and is separate to the company’s forestry arm, which managed 31,00ha of Green Triangle bluegum plantations.
Mr Gay said the acquisition represented a logical combination of complementary businesses for Gunns.
Meanwhile, Gunns spent $9.5m this year on restructuring costs following the Auspine take-over to integrate the business into its own operations, including redundancies and mill closures, but declared synergies achieves were in line with expectations at the time of the acquisition.
“The integration of the Auspine and Gunns timber operations has improved our cost structure and provides an efficient platform for the growth as markets improve,” he said.
But the plantation sector has been disappointing, according to the report, with decline in the Japanese market hitting exports.
Gunns declared an overall 20% decline in earnings due to reduced global demand for woodchips and sales of plantation managed investment scheme products.
“At the beginning of the financial year, Gunns decided to scale back its plantation MIS activities,” Mr Gay said.
“However, planned plantation MIS sales declined materially below expected levels due to a material contraction in demand for these products, exacerbated by the negative publicity surrounding the sector in general and Great Southern and Timbercorp in particular.”
Gunns’ plantation managed investment business was down 45% on last year as a result of turmoil across the sector, but the company still plants to pursue further development of plantation resources and value-adding opportunities.
“The current restructure of the hardwood plantation sector in Australia provides the potential to further increase mill plantation input,” according to the report, stating assets that may be sold were in key growth areas, such as the Green Triangle.
Meanwhile, Gunn’s sawn timber business was also hit by weak domestic demand and Mr Gay said the outlook for forest product markets remained difficult.
“Wood fibre sales are largely dependant on the Japanese market and economic conditions which are expected to remain weak through at least the course of the first quarter of the 2010 financial year, with the strengthening Australian dollar adversely impacting our competitive position.” he said.
Source: The Border Watch - 01/09/09
PLANNING PERMIT GREEN LIGHT FOR WOOD PELLET MILL
Plantation Energy is hoping to start construction work for its proposed $25 million wood pellet mill at Heywood early next year.
It follows the Glenelg Shire Council’s approval of a planning permit for the development on Tuesday night.
The permit has 38 conditions attached to it.
Company business development manager Jarrod Waring welcomed the permit approval, saying the company was committed to the region.
“We will look at either negotiating a lease or buying the land, depending on the wash-up of the Timbercorp receivership process,” he said.
The proposed mill has been caught up in the Timbercorp administration and receivership process because the site is on freehold land owned by Timbercorp.
Mr Waring said it was planned to negotiate a lease with any new owner of the land or to buy the land.
Shire councillor Karen Stephens told the council meeting the council delegation that spent several days on a study tour of timber facilities in the Albany district of Western Australia early last year was responsible for Plantation Energy establishing at Heywood.
Glenelg mayor Geoff White expressed similar sentiments, saying that Plantation Energy was the first company the delegation had met on the tour.
It is expected that, when the mill is operating, along with a twin mill earmarked for Wandillo near Mount Gambier, an extra 10 ships a year will visit the Port of Portland for the pellets to be exported to European markets.
Source: The Portland Observer – 28/08/09
POTENTIAL DELAY THREATENS WOOD PELLET PLANT
The proponents of the $30m wood pellet plant near Mount Gambier are hoping the development will receive the green light next month so work on the Wandilo site can start within weeks.
But Plantation Energy Australia spokesperson Jarrod Waring yesterday warned the project could be delayed 12 months or ever “jeopardised” if the site for the development was rejected.
Grant District Council independent planning assessors met earlier this month, but could not reach a decision on the non-complying application.
Council’s Development Assessment Panel has asked for additional information, following nearby residents echoing concerns over road safety.
Nearby residents have called on the wood energy giant to move the development to the other side of the Van Schaik’s organic plant, away from houses, school bus stops and a busy intersection.
“At this stage we have an application before council for a specific piece of land and we intend moving forward with that,” Mr Waring said.
He said any moves to investigate another parcel of land could push the development back 12 months.
“It could jeopardise the project…instead of being only weeks away from starting construction, it would push it back considerably,” he said.
He said the company wanted to start in October and complete the project by May 2010.
“It won’t just employ 15 people on the site, but it will create 60 jobs during the construction stage,” Mr Waring said.
The company chief also claimed the plant would create significant flow-on benefits to local transport and service industries.
He said the company had been gathering information for planning assessors and hoped it would help mitigate concerns expressed by local residents.
“We hope it will be a win-win situation for both the residents and ourselves,” he said.
The plant – one of only two in Australia – will export environmentally wood pellets made from pine and bluegum plantation residue.
The plant is earmarked to be built on Wandilo Forest Road, near Mount Gambier.
The operation, which will create 56 more truck movements in the area, is likely to accept up to 350,000 tonnes of residue from plantation operations and will produce about 250,000 tonnes of densified biomass fuel pellets per year.
It is understood CO2 reduction policies in Europe and the adoption of similar measures in Japan are fuelling demand for these pellets.
Source: The Border Watch - 26.08.09
PELLET MILL TAKES PUNT
Wood pellet mill proponent Plantation Energy has resubmitted its planning permit application for its original site on Timbercorp-owned land at Heywood. The $25 million development is expected to receive planning approval subject to 38 conditions at tomorrow night’s Glenelg Shire Council meeting.
Plantation Energy had originally submitted the application for a decision by the council in June, but put it on hold due to the land being frozen under the Timbercorp administration process.
It has been investigating several alternative sites for the pellet mill, including co-location to land adjacent to South West Fibre’s woodchip mill at Myamyn.
However, it is understood recent developments relating to dates being set by Timbercorp receiver KordaMentha for the sale process of Timbercorp forestry assets have led to Plantation Energy resubmitting its application.
Plantation Energy business development manager Jarrod Waring said late last week the company had decided it would negotiate a lease for the site with any new owner of the land.
“With the planning permit, there is a two-year window we have to build, so rather than go through the time consuming and costly process for a new application at an alternative site we will take this process,” he said.
Source: The Portland Observer – 25.08.09
INVESTORS GIVE GREEN LIGHT TO BLUEGUM SALE
A district landholder has welcomed the decision by Timbercorp’s investors to grant the company’s liquidators power to sell the company’s forestry assets.
Coonawarra’s Bruce Gregory said he hoped liquidator KordaMentha’s announcement it would attempt to finalise a transaction by September 30 could move the bluegum sector forward from the standstill that had stalled contractors’ work to harvest and maintain plantations and left property owners without rent payments.
“It would be good to have a conclusion to what has been a testing time for everybody,” Mr Gregory said.
“At least with investors giving the green light everyone can move forward – investors probably have the most to lose and KordaMentha is keen to look after them, but landlords are also pleased things are moving.”
Mr Gregory said contractors, including harvesters who had invested heavily in moving from softwood machinery to hardwood chippers, has also been “sitting around waiting for something to happen” for months.
“People in Western Victoria had infrastructure in place before Timbercorp ran into financial problems and are ready for harvesting and as soon as a purchaser takes up their position harvest would start straight away,” he said.
KordaMentha announced yesterday 95% of 4200 investors who voted online had backed its non-binding proposal to attempt to sell Timbercorp forestry assets, including Green Triangle plantations.
Liquidator Mark Korda said the result provided a clear mandate to vigorously pursue the expression of interest program to sell or recapitalise the forestry assets.
“We have already received interest from more than 50 parties and we will now work towards securing final bids by September 18, with the transaction to be finalised by September 30,” he said.
“We are confident a competitive process will result in the best outcome for growers.”
Mr Korda said he would apply to the Federal Court this week to formally secure the power of sale over the assets and the investors’ decision was also a step in the right direction for resolving the issue of rents with landlords, who were collectively owed $7.2m.
Mr Gregory said the period rent payments had been stalled and the future of plantations had been uncertain since Timbercorp’s collapse had been stressful for all landlords, whether large or small.
He said there had been some potential buyers “circling like sharks” in an attempt to benefit from the Timbercorp collapse, but the strong number of parties interested in the region’s forests gave him confidence there would be enough competition to secure an appropriate buyer.
However, he said he hoped the change of ownership would lead to “business as usual” and not renegotiation of lease contracts.
“If they roll contracts over, basically everything should keep moving along and that would be a good outcome,” he said.
Mr Gregory said he expected a new owner would be busy enough without renegotiating contracts as fire prevention maintenance needed to begin now.
“As sun come out the grass starts growing, so they have got to get out and do that,” he said, adding a restart to work would also give confidence to contractors, some of which had been left unpaid for work prior to Timbercorp’s collapse.
“There should be a big flurry of activity at the end of this quarter.”
Mr Gregory said he had moved stock into his mature bluegum plantations to keep grass short in anticipation of the delays to maintenance.
“I was worried there would otherwise be drama over the next three months and a lot of other landholders have done the same thing if they have reasonable fences,” he said.
“It is a bit of a win-win situation as it reduces Timbercorp’s costs for sprays and gives the cattle something to eat.”
Source: The Border Watch - 12/08/09
MORE CONTROVERSY FOR PENOLA PULP MILL
The key figure behind plans to develop a $1.5b pulp mill at Penola has warned the region would lose the huge development if claims his consortium acted improperly lead to court action.
Protavia project manager John Roche and his partners have again been embroiled in controversy with Timbercorp Securities administrator KordaMentha threatening to sue the group.
In a letter by solicitor Leon Zwier, it was alleged that TC Growers consortium, compromising Protavia, superannuation scheme First Super, Timbercorp Forestry managers and an international investor, accessed and used a private list of growers’ email addresses.
Mr Roache has been warned court proceedings will be launched unless TCG permanently removes the list of addresses and provides a statutory declaration outlining how it obtained the document.
However, Mr Roche told The Border Watch addresses used by TCG to distribute promotional material came from “a legitimate source”.
He said Protavia had worked in partnership with Timbercorp for half a decade and developed a comprehensive understanding of the agribusiness manager’s operations.
But it was the popularity of his consortium’s proposal to provide a way forward after the collapse of Timbercorp that led to the most growers contacting the group, registering via the TCG website, according to Mr Roche.
“We have our own source of information,” he said.
“It is a difficult situation everyone has found themselves in and we should be moving forward – not autopsies on the past.”
He said buying Timbercorp’s forestry assets would secure a chip supply for the mill and he hoped progress was not stalled by court action.
“If it follows the current path this is heading and everyone ends up in court, history would tell use there would be no such thing as a speedy response and it would be bogged down,” he said.
“We want to avoid that for the pulp mill and the best way to do that is to get people talking around the table.”
Mr Roche said investor growers had been strongly supportive of the consortium’s proposals put forward in capital city meetings across the country, with another landowners forum planned at Hamilton’s George Hotel tomorrow night at 6pm.
However, KordaMentha spokesperson Mike Smith said TC Group was not the only group interested in the Timbercorp assets, with more than 40 local and overseas parties also emerging as possible buyers.
“In global terms they are outstanding assets – big and in areas where the climate and soil are excellent for eucalypt forestry plantations, so there are a lot of people interested in purchasing,” he said.
Mr Smith confirmed that TC Group had been cautioned over the alleged use of confidential material, but the matter had not been taken further at this stage as the administrator’s legal team was occupied with court matters regarding Timbercorp’s olive and almond estates.
Meanwhile, Wattle Range Council Mayor Mark Braes has not backed away from his involvement in the consortium in the wake of the controversy.
He said he accepted an invitation to act as an independent chair of the TCG meetings, with his expenses covered by council.
“My interest and concern in this matter is to assist in a process that may lead to a solution for TC growers and this is, in my mind, an appropriate role for me as mayor, given the extent of bluegum plantations in the Wattle Range Council area,” he said.
“The situation in regard to Timbercorp and Great Southern, if not resolved, will have a significant impact on many landowners and investors and on the economy of the Wattle Range Council area as well was the Green Triangle Region.”
He said council had supported the pulp mill for more than four years on the basis that it would be a substantial investment for the region that would sustain bluegum estates into future rotations and provide construction and operation of jobs.
Source: The Border Watch - 21/07/09
