After about 140 years of logging almost anything in its sights, the last few years has seen it looking down its own barrel. Much to millions of Australian’s delight, it finally admitted defeat recently and declared insolvency.
Gunns started as a small Launceston sawmilling business in 1875. By 1986 it was a publicly listed company. In 1999 Gunns began to swallow up Boral in Tasmania and Tasmania’s biggest woodchip company, North Forest Products. It has since been responsible for untold destruction of ancient forests and wildlife, converting most of it into pulpwood crops.
By 2004 Gunns employed about 1,200 people, was worth about $1 billion and had a share price of $4.46. It wielded immense political power in the Apple Isle, being given millions in public funds to help its operations along. It sued conservationists to silence them and threw its weight around relentlessly.
Its controversial plan for a $2.3 billion pulp mill in the Tamar Valley was the beginning of its downfall. Environment groups and world trends convinced it that to gain the markets it wanted for its products, it needed to run on ethically obtained wood. It moved into plantations. But other forces were at work and despite desperate attempts to hang on, it finally had to admit defeat and on the 25th September 2012, it went into voluntary administration – broke and in debt.
With a share price of 16c there’s little hope of investors getting their money back.
This sends a fairly unambiguous message to others in the logging industry and to banks who finance them, that native forest logging is in a very frail state and is a bad investment.
The best article on this so far has been written by Tassie journalist Richard Flanagan.
“…the mill is dead—legally in limbo, socially unacceptable, politically impossible, and commercially fantastical. Its end ought to mark the possibility of a new beginning for Tasmania when the state can seek to address its many problems with many solutions free of the bitter divisions Gunns promoted and prospered from. The death of the mill should be a source of hope, not despair.”
Click here to read the full story.
There is also a great analysis of the woodchip industry and its economic history by Dr Judith Ajani from The Conversation. Worth a read too