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Gunns commits to hardwood chip facility

Posted on November 2, 2009, 7:07am and updated on November 3, 2009 at 7:42 am

The Port of Portland has today welcomed the signing of a lease by Gunns Limited committing it to develop and operate a second hardwood chip facility at the port.

The lease was approved and signed by the Boards of Gunns Limited and Port of Portland Pty Ltd following three months of negotiations and due diligence on the port site.

Construction on the new facility is expected to commence in January 2010.

Port chief executive Scott Paterson said the announcement provided a viable and exciting way forward for the Green Triangle Region’s (GTR’s) woodchip industry after the demise of Great Southern and Timbercorp.

“With two of the three major industry stakeholders going into administration this year, the future of the bluegum plantations was uncertain,” Mr Paterson said.

“This agreement reached with Gunns is therefore a key milestone for this vital GTR industry.

“Our board considered that it was important to proceed with the appointment of a lessee and developer to ensure that appropriate port facilities are in place and operational to handle an anticipated surge in volumes from 2011.

“We expect to be handling over three million tonnes of plantation-grown bluegum hardwood chips per year from 2011 and currently the port can only handle one quarter of this volume.

“Therefore we needed to urgently seek ways to increase our capacity to handle the estimated $300 million in exports each year.

“The new Gunns facility adds to the region’s capability to handle the bluegum harvest by complementing the existing GrainCorp hardwood chip facility at the port and the related chip mill at Myamyn, which was opened in September by South West Fibre.

“Earlier this year we called for expressions of interest and then asked 20 parties to submit proposals. Nine strong proposals were received and a comprehensive evaluation was done.

“On July 30 we announced Gunns as our preferred developer and we gave ourselves three months to finalise a deal.”

Gunns chief executive Greg L’Estrange, said the company had already prepared concept designs for the new facility.

“Gunns will fund and construct the new facilities which we then intend to operate,” he said.

“Where possible, local contractors will be used in the construction phase.

“All new facilities will comply with the environment management plan agreed by the Port of Portland with the Victorian Government in 2008 as part of the planning approval process.”

The Green Triangle Region produces hardwood chips grown exclusively from bluegum plantations which are a renewable resource. No native hardwood is harvested in the GTR for export through the Port of Portland.

These chips are the raw material for high-grade office paper. The plantation bluegum estate in the GTR is more than 170,000ha.

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