The future of native forests logging in East Gippsland is under a cloud after the main woodchip customer in the region announced it would not renew its contract with Victoria’s state-owned timber company.
South East Fibre Exports, which owns a large woodchip mill at Eden in south-east NSW, has told VicForests it will not accept East Gippsland residual timber – the waste from native forest logging not turned into sawlogs – after this year.
VicForests chief executive Robert Green said the company faced a challenge to run a forestry industry in the state’s east that continued to support jobs if it no longer exported woodchips.
The decision puts further pressure on VicForests which is seen by some as having underperformed financially since its inception in 2003. Last year VicForests registered an $802,000 profit; the year before it registered a $96,000 loss. The lacklustre performance has prompted questions about whether the loss of native forests through logging is justified for little profit.
VicForests spokesman David Walsh said it supplied about 200,000 cubic metres of wood to the Eden mill in 2012-13 – about a sixth of the total 1.2 million cubic metres of wood produced by VicForests for the year.
But Mr Green said there would continue to be a native logging industry in East Gippsland – one of the two major logging areas in the state.
“The announcement offers the certainty necessary for us to get on with the job of looking to the future and identifying new opportunities for the industry,” he said.
The loss of the contract could also put pressure of the region’s sawlog industry, given the sale of waste timber for woodchips contributes to making the industry viable. Mr Green said VicForests would continue to meet its commitments to sell higher-value sawlogs.
Victorian Greens leader Greg Barber said: “Japanese woodchip companies [that own the Eden mill] have more environmental consciousness than the Liberal Party. Plantation wood is greener, makes better paper and there’s millions of tonnes of it available.
“VicForests is a loss-making public-owned company and now it is absolutely finished. They can’t sugarcoat it. No one wants to buy their product and they can’t make any money off it.”
The decision to end the VicForests contract at Eden had been expected for some time among forestry circles given the struggling financial performance of South East Fibre Exports in recent years.
Agriculture Minister Peter Walsh said the government, along with industry and parts of the East Gippsland community, had last year begun drawing up a plan to explore other markets for logs used for woodchips.
“The Victorian Coalition government recognises that forestry makes a valuable contribution to regional jobs and small communities and we will continue working with local communities to support viable, sustainable and responsibly managed local industries,” he said.
Speaking on ABC Radio in Gippsland, South East Fibre Exports general manager Peter Mitchell said the decision was a result of lower international demand, increased production in countries such as Vietnam, and more wood flowing from failed managed investment scheme plantations.
Tom Arup Environment editor, The Age