As a result of the closure of Gunns last working woodchip mill at Triabunna, for a minimum period of two months, we see for the first time in living memory Tasmanian native forests no longer being clearfelled for wood chips.
The high Australian dollar and a lack of FSC accreditation has made the shipping of Tasmanian native forests as woodchips a non-viable proposition. In a last ditch effort to conserve cash flow Gunns has finally moved away from this Third World landscape trashing industry.
In those countries that only accept FSC accredited timber Gunns is persona no-grata, the one remaining avenue of sale is to countries with extremely low labour costs. China is still prepared to accept Gunns non FSC accredited timber but luckily for Tasmanian native forest trees they are now too expensive in Australian dollars to chip and ship.
As a manufacturer in China I can personally inform Gunns that the hourly rate for a skilled man is less than three dollars. How Gunns expect to compete with wage rates in Tasmania for a skilled man of nearly a thousand dollars a week in the making of pulp as a by-product from plantation timber is beyond comprehension.
The Chinese will take plantation timber accredited or not, but Gunns will have to virtually give it away for it will not compete on price with FSC compliant plantations sourced from South American growers. It is all well and good for the Gunns CEO to state that they will no longer clearfell and burn Tasmanian native forests, replacing this source of Tasmanian chips with FSC accredited plantation timber as feedstock for the proposed mill, but Gunns has no alternative as any unaccredited source makes their pulp unsaleable on the world market.
In a complete contradiction of natural justice Gunns are now trying to screw Tasmanians, the Tasmanian Government and the Australian Government for a cash payment of approximately $200 million for non-performance over the now unviable and uneconomic contracts previously negotiated to log Tasmanian forests, at mates’ rates. These contracts were gifted by a willing GBE in collusion with the suspect management of a Public Company influenced by a sympathetic Lennon Government. Labor will be dicing with death should they throw this financial lifeline to Gunns.
With the income stream from woodchipping gone and the income stream from MIS scams gone there is no cash flow into Gunns coffers for the most expensive tax scam in Australian history has vanished. Tending to the now bankrupt Great Southern plantations is one of the few identifiable sources of income and cash flow to service Gunns debts of over six hundred million dollars which with the failure of Great Southern can now be seen as backed by vastly devalued assets. Gunns actual income producing businesses those of the wine and Mitre 10 have been sold to try and produce cash flow and service debt.
Lastly, Gunns have announced that the sawmill they bought from FEA and used to improve their half yearly profits by increasing its value by a further $19 million cannot now locate a volume of suitable timber to justify survival. The pine resource of 33,000 hectares purchased with Auspine had to be sold to pay down $175 million of their debts, hence no softwood timber resource. Gunns now has to treat the forest with some form of respect and intelligence rather than clearfelling and chipping all before them. I suggest that there is hardly anyone left in their employment who knows how to selectively log the standing timber still abundantly available from Tasmanian native forests for purposes of sawmilling.
I ask therefore how does Gunns manage to pay the bills?
With over 1,000 employees to be paid each week, at what point will the Directors throw in the towel or risk being compromised should the company be trading whilst insolvent.
The ANZ Bank has kept it afloat but with no evidence of a JVP and no finance for a pulp mill, the day of reckoning must be almost nigh. The Gunns MIS tax scam ship, now empty of chips, may well be holed below the waterline, for although the orchestra of sycophants is still playing the usual rousing tunes, the decks are clear and the crew is in the lifeboats as the ship seems about to sink.
Download the Naomi Edwards analysis:
The Pulp Mill Revisited
A January 2011 Update to Analyses by Naomi Edwards
The report is a brief update on my earlier analyses on the likely financial viability of the Bell Bay Pulp Mill. Those analyses concluded that, despite a significant freight advantage, Bell Bay would struggle to compete internationally because of a higher fibre input cost and a strong Australian dollar.
I have now updated the analysis to reflect:
1. The intention to move the pulp mill to 100% plantation fibre from day one.
2. The persistently high Australian dollar against the USD.
3. The increase in expected cost to build the pulp mill to around $2.5 billion.
• CODE Breach UPDATE:
Tuesday, the 5th of April
UPDATE ON GREEN CODE BUSH ACTION THAT STOPED LOGGING OPERATIONS IN HIGH CONSERVATION VALUE FOREST
Yesterday a group of protestors from Launceston based group CODE GREEN, have walked into a Forestry Tasmania logging coupe situated in High Conservation Value Forest in North-East Tasmania.
A group’s spokes woman Dr Lisa Searle has spoken to the media yesterday and explained the groups position. She has joined the the rest of the protestors at the coupe after the media conference.
Today, both the police and Forestry Tasmania are present and Dr Lisa Searle, who spend the night in a suspended tree seat is waiting to be taken down by the police.
Her commited action is very likely to result in arrest.
April 5th 2011
Protestors have stopped forestry logging operations in a HCV forest 45 km from Launceston on the 4th of April 20011.
By our direct action “We are calling on our State and Federal governments to put end to all native forest logging”.
Today Dr Lisa Searle, who is the spokesperson for the group has been removed by police and charged with trespass.
“What we have here in Tasmania is unique and worth protecting” Dr Lisa Searle.
“Our action will not stop till our government implements the full moratorium on logging HCV forests.”