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Value-adding opportunities exist

Posted on October 22, 2008, 8:08am

A South East timber leader has claimed the possible collapse of the Penola Pulp mill will not be a “disaster” for the region because other companies are already scouting the area for opportunities.

But Green Triangle Regional Plantation Committee executive officer John Kellas claimed it was important the fledgling multi-million-dollar hardwood industry attracted value-adding enterprises for long-term economic and jobs growth.

His comments follow confirmation that the financial backer of the Penola Pulp Mill — ANZ Infrastructure Services — has withdrawn its support as the “major” finance provider.

The pulp mill project — worth an estimated $1.5b — was the largest commercial investment ever mooted for the South East.

While conceding it would be a major setback for the industry which was expected to generate $330m per year, Dr Kellas said at least one other company was exploring setting up a multi-million-dollar processing plant in the region.

He said Western Australian company Lignor had visited the region asking about the resource to crunch the wood to make beams.

“Another option for the resource is to use it as biofuel,” said Dr Kellas, who explained a number of companies were interested in using the resource for biofuel.

“If the Penola Pulp Mill falls over it will not be a disaster for the industry, it will just mean one avenue will close.”

But he said it was vital the woodchip resource — an estimated three million tonnes per year — was value-added onshore to boost the local economy, jobs and Australian international trade.

“Processing the resource will create two to three times the value of the product if it was just sent offshore as woodchip,” Dr Kellas said.

He said woodchip from the Green Triangle bluegum plantations was being shipped to Japan.

Meanwhile, Member for Mackillop Mitch Williams said yesterday the possible collapse of the mill project would be a “substantial blow” for the region.

He claimed the global economic meltdown would be a factor in major companies looking to set up multi-million-dollar processing plants in the region.

“It is a most awkward time for companies to take the next step,” said Mr Williams, who explained the product needed to be value added in the region and not just shipped out as low-value woodchip.

“Processing is where the real jobs and the economic drivers are,” Mr Williams said.

He said the region now had significant resource which had been developed over a 10 year period.

“The existing timber industry’s value adding companies such as Kimberly-Clark and the various sawmills have put a lot more value on the industry, rather than just growing trees,” Mr Williams said.

SANDRA MORELLO

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