Heyfield mill: Victorian Government signs agreement to buy Gippsland sawmill

In July 11, 2017

(AU) – The Victorian Government has struck a deal to buy Australia’s largest hardwood sawmill, at Heyfield in Victoria’s east, indicating it will reverse plans to shut it down and stop the loss of up to 250 jobs.

The mill’s operator, Australian Sustainable Hardwoods (ASH), had been locked in a dispute with the Government and state-owned logging company VicForests over the amount of timber supplied to the mill.

In March, the company announced the mill’s closure, and last month said the shutdown would begin in August, prompting a series of workers’ protests outside State Parliament.

But in a statement this morning, Agriculture Minister Jaala Pulford said the Government had reached an in-principle agreement with ASH shareholders to buy the mill, subject to due diligence checks.

“The Labor Government has reached agreement with the ASH shareholders to buy the Heyfield Timber Mill,” the statement read.

“We’ve always said we would fight for every job. That doesn’t mean industries won’t change — but Victorian workers can know that this Labor Government is on their side.

About 250 staff were expected to lose their jobs if the plant closed.

The Government and the company are yet to detail how the deal will affect those workers over the long term.

The region is still dealing with the loss of hundreds of jobs after the closure of the Hazelwood Power Station, and the Heyfield mill is the small town’s biggest employer.

Mill has ‘solid future’: minister

The dispute centred on a move by the state logging agency, VicForests, to slash the mill’s timber supply from 130,000 cubic metres to 80,000 cubic metres.

Last month, the company announced plans to make 50 positions redundant by August.

Ms Pulford said the mill’s existing managers would remain in charge under the Government’s plan, adding that due diligence checks would take about three weeks.

She would not reveal how much the mill would cost the Government should the sale go ahead.

“This is a very viable business. The transfer of ownership will set this mill up for a very solid future,” Ms Pulford told ABC Gippsland.

Company had eyed move to Tasmania

The ASH mill at Heyfield is the largest hardwood sawmill in Australia.

In June, ASH rejected a purchase offer from the State Government, saying it did not recognise the value of the site and its equipment.

“No fair commercial offer has been forthcoming from the Andrews Government,” ASH said in a statement at the time.

Later that month, the company entered negotiations with the Tasmanian Government to move the business to that state’s north-west.

CFMEU forestry division spokeswoman Jane Calvert said news of the sale would come as a relief to workers, their families and the community.

“But no matter who owns the mill it still needs a long-term wood supply.

“We will now seek urgent talks with the Government in order to secure a future wood supply for our members across the industry in Victoria including our members at the Heyfield mill.”

The looming closure of the mill had become a major political issue, spilling into the federal arena.

Deputy Prime Minister Barnaby Joyce wrote to the Premier urging him to protect jobs by reviewing the status of the endangered Leadbeater’s possum, which had put some logging areas off limits.

But Professor David Lindenmayer from the Australian National University criticised Mr Joyce’s suggestion, saying any downgrade of the possum’s classification would be “absolute insanity”.

Heyfield mill: Victorian Government signs agreement to buy Gippsland sawmill by Kellie Lazzaro.  Available from <http://www.abc.net.au/news/2017-07-03/heyfield-timber-mill-victoria-signs-buyout-agreement/8672178> [July 13, 2017].  Photo: Article Source (Stephanie Anderson)

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