An unyielding principle sustains the growth of the Ta Ann Group’s rotary veneer peeling enterprise in Tasmania – a high-tech operation that uses innovative concepts to transform low-grade eucalypts into high-value products.

“The real story is the company’s origins and its belief that there is no alternative to sustainable development,” says Ta Ann director and respected forester David Ridley.

The Malaysian-based company opened its first purpose-built mill in the Huon district in 2007, and the second at Smithton in the state’s north-west, a combined $79 million investment utilising Japanese, German and Malaysian technologies and supporting more than 160 jobs.

So, how has Ta Ann developed using a low-quality, but sustainable resource?

“First we established the markets, then the expertise in manufacturing,” Ridley said. “And there were many reasons to invest in Tasmania – a 20-year wood supply agreement, an approved site ready for investment and the customer’s preferences for forest certification in place.

“This was all mixed with a desire for the sustainable development of a sustainable resource.”

Ta Ann operates on an agreed 20-year wood supply from Forestry Tasmania – 115,000 cubic metres at Smithton and 150,000 cubic metres at the Huon mill, with recoveries of about 50% of the sales volume.

The mills have an international competitive advantage, producing strong and durable rotary eucalypt veneers from logs that were previously only suitable for wood chipping, which meet international requirements for forest management sustainability and chain-of-custody certification.

The export market is focused on Malaysia, Japan and China, with the range of ply products increasing to include shipping container flooring, laminated veneer lumber and new decorative floor products.

Shipments to Malaysia are made every 3 to 4 months.

David Ridley says Ta Ann’s processing technology and market strategy draw on the inherent properties of eucalypts and a sales partnership developed over more than 20 years.

“This strategy also included partial manufacture in Tasmania and completion of the product closer to export markets,” he said.

“Our first step has been to produce veneer and manufacture plywood in Malaysia, but ultimately we will manufacture plywood at our Tasmanian mills.”

With an investment of $790 million, Mr Ridley says Ta Ann’s resource security is still the key to the future.

“If the resource is available. We can do more. We have room at the Smithton mill for another peeling line.”

Mr Ridley said the current forest conflict in Tasmania was a test of the company’s sovereign risk.

“We were invited to establish our operations by the Tasmanian and federal governments, so this is the basis on which we must go forward,” he said.

“We’re here to add value, which is an obligation to government requirements, so we would expect them to address the sovereign risk issues.

“We are looking at further value-added growth plans and job creation as we face challenges out of the global financial crisis and the high Australian dollar.

“I would expect that this would be part of the swings and roundabouts in any decisions made in the current process,” he said.

Editor’s note: Ta Ann was founded by a group of entrepreneurial Sarawakians in the 1980s who have grown the company from a small timber-trading firm to a public-listed corporation with global footprints. Interests now encompass timber, oil palm and other agricultural products.

A cornerstone of the company is a commitment towards sustainable development. This led to one of the first forest plantations in Sarawak, and to date, the company has achieved sustainable certification in all operational forest and oil palm units.

Ta Ann was established in Tasmania in 2005 to better use previously woodchipped eucalypt regrowth log billets by peeling them to produce a high-value veneer for domestic and international markets.

Originally, the company invested more than over $79 million to develop two veneer mills – a Huon mill built in 2007 and a Smithton mill in 2008. Subsequent changes to wood supply and market conditions led Ta Ann to change direction in 2015, commissioning a new plywood manufacturing plant at Smithton with an installed capacity of 24,000 cubic metres a year.

When at full production, the plywood plant would have injected $20 million into the local economy each year.

However, after multiple attacks by ENGOs, the Malaysia-based Ta Ann Group decided to quit Tasmania, closing two sustainable mills that employed more than 100 workers, following a historic forest peace deal that was voted down by the state’s upper house.

In this 2008 flashback, senior editor Jim Bowden spoke with Anderton, who responded to a call by the Sustainability Council for agriculture to enter the ETS immediately and pay full liabilities for emissions above 1990 levels.

“We need to remember that New Zealand is the first country in the world to consider bringing the agriculture sector into an emissions trading scheme. This is not a small matter and there are significant challenges to overcome,” Anderton said.

“The agriculture sector is the most important source of export income for New Zealand, representing around 65% of total merchandise exports.

“By phasing agriculture into the ETS over time and in a measured way the taxpayer is actually investing in a transition that benefits the economy as a whole. It is true that the costs are being shared about and managed in a pragmatic way, but the alternative would create too violent a shock for businesses.”

Anderton said the Sustainability Council had identified mitigation opportunities for agriculture, but none had been accepted internationally – as yet – and therefore did not qualify for carbon reductions in New Zealand’s carbon accounts.

At present, the European Union considers that bringing the agriculture sector into its emissions trading scheme would be impractical.

“The New Zealand government made a promise to the sector back in 2003 not to introduce a price measure on the sector in the first commitment period as long as the sector invests in research, which the sector is doing,” Anderton said.

The government has undertaken to work with the agriculture sector to explore whether a farm level point of obligation would be feasible or cost-effective, which would represent a whole new order of magnitude of complexity with more than 30,000 possible participants.

“Farmers are not getting let off the hook here; they are also large energy and fuel users and will be paying the carbon costs associated with these in 2009-10 like every other business and household in New Zealand,” Anderton said.

“Meat and dairy processors will also face increased costs from 2009-10 and these are likely to be passed on to farmers.

“Furthermore, the sector will be responsible for all of the growth in methane and nitrous oxide above 90% of 2005 emissions when it comes into the scheme in 2013, so the clock has already begun ticking. It is for this reason the Government is already working closely with the sector on developing and implementing technologies to reduce emissions.”

The low-grade logs are a by-product of an existing FPC operation to thin and export logs from 3500 ha of radiata pine planted around the region in the late 1980s and early 1990s.

Plantation Energy executive director Gavin Harper said the company was constructing Australia’s first industrial-scale timber fuel pellet plant, scheduled for completion early next year at Albany’s Mirambeena timber precinct. The finished fuel pellets will be exported for domestic and industrial heating.

FPC general manager Dr Paul Biggs said the new contract would help increase the profitability of the Albany radiata plantation operations for all parties – landowners, harvesting and transportation contractors, the FPC and Plantation Energy.

“In any form of primary production, it was always important to minimise wastage and extract the best possible value from the resource,” Dr Biggs said.

“Finding a way to add value to this low-grade resource to manufacture and export a renewable energy fuel product is better for the environment, and at the same time, it will help the entire plantation industry become more profitable.”

Biggs said this was an excellent example of the FPC partnering with industry to produce a win-win-win for the triple bottom line of environmental, economic and social sustainability,” he said.

Gavin Harper said Plantation Energy had been developing the fuel pellet concept at Albany for several years before formally launching the company in 2006. “The new plant will bring total investment in excess of $20 million to the Albany region, with significant further investment planned in other regions,” Harper said.

“The new plant will create around 12-15 full-time permanent jobs in Albany, with additional short-term positions during the construction phase. The operation will also employ local contractors supporting the plantation industry in the Great Southern region with the associated general economic benefits to local suppliers and service industries.”

Harper said using fuel pellets sourced from sustainably managed plantations instead of fossil fuels would make a significant contribution to reducing global carbon emissions.

“The advantage of non-timber product management is that it’s based on the collection of leaves, branches, seeds, and fruits, constituting non-destructive management, keeping the forest standing and potentially bringing gains in the medium term,” said Pedro Medrado Krainovic, the study’s first author, who conducted the research during his postdoctoral work at USP’s Institute of Advanced Studies with support from FAPESP.

The team surveyed 46 forest plots, each measuring 900 square meters, across the valley that spans São Paulo, Minas Gerais, and Rio de Janeiro. Of the 329 species identified, 283 were native, and 167—59 per cent—showed economic potential. Most were linked to medical applications, followed by cosmetics and food. Yet only 13 per cent of studies on these species had advanced to the stage of producing final products. Araucaria and juçara, both valued for their food uses, were among the most frequently studied.

To gauge market interest, the researchers examined patents filed worldwide. 78 species had patents registered in 61 countries, though only 8% were in Brazil. “The number of patents is evidence of the economic potential of these species. It gives us an idea of what can already arouse interest and commercial potential. At the same time, those without patents show how much can still be found through research and development, such as new medicinal molecules, cosmetics, and even foods,” Krainovic said.

The study suggests that non-timber products could serve as an economic bridge, offsetting restoration costs while timber species mature. Brazil’s Forest Code prohibits timber exploitation in permanent preservation areas, such as riverbanks and steep slopes, but sustainable extraction of non-timber products could fund reforestation in these regions. Such management would add multifunctionality to forests that already deliver critical ecosystem services, including water supply, soil protection, carbon sequestration, and pollination.

“It’s necessary to consider that the ultimate goal of ecosystem restoration is the return of ecosystem services, which are also important for agricultural activity. However, seeking sustainable ways to make these projects viable is a way to make restoration more attractive to rural producers,” Krainovic said.

The economic implications extend beyond forest health. Reforestation projects using native species are known to generate large numbers of jobs that require little formal training. A 2022 study published in People and Nature estimated that Brazil could create 2.5 million jobs if it meets its Paris Agreement target of restoring 12 million hectares by 2030.

Still, the researchers caution that exploitation must be carefully managed to avoid repeating past mistakes. Rosewood, once prized for its essential oil used in perfumes, was heavily exploited in the mid-20th century and is now threatened with extinction. Policies such as certification, public procurement, and sustainable market development will be essential to ensure that non-timber products contribute to restoration rather than degradation.

By cross-referencing species abundance, scientific literature, and patent data, the study offers a roadmap for future restoration projects across Brazil’s diverse biomes. “Rare, scarce species with significant economic potential could be added to active restoration projects involving the planting of seedlings. In turn, abundant and easily managed species that grow naturally can be better studied to find economic uses, stacking tangible and intangible values of forests and native species and creating ecological-economic multifunctionality,” Krainovic said.

More information: Pedro Medrado Krainovic et al, Bioeconomic opportunities in restored tropical forests, Ambio (2025). DOI: 10.1007/s13280-025-02234-5 Journal information: People and Nature, AMBIO 

Studies by the Insulation Council of Australia and New Zealand (ICANZ) and the Forest and Wood Products Research and Development Corporation (FWPRDC) have confirmed that, with very limited changes, suspended timber floor construction can easily exceed a 5-star rating.

Commissioned independently by FWPRDC and ICANZ, both studies provide homeowners, building designers, and builders with a selection of simple, cost-effective options to improve the energy efficiency of their homes.

Trevor Lee, director of buildings with Energy Partners and one of the FWPRDC report’s authors, says the study identified 10 top techniques for improving the calculated efficiency rating for suspended timber floor houses across hot, temperate, and cool climates.

The preconception of numerous builders, energy raters and general consumers that dwellings with suspended timber floors could not simply and cost-effectively achieve a 5-star energy rating have been dispelled by the Energy Partners report.

“In all climates, the two most effective techniques alone were sufficient to increase the rating by more than a star,” says Lee.

“Various techniques will be more suited to warmer or colder climates. But ceiling and wall insulation are always important in all climates for achieving a high star rating,” he said.

ICANZ president Dennis D’Arcy says it is as simple as making smarter use of existing low-cost options, such as increasing wall and ceiling insulation, installing ceiling fans, better glazing and draft proofing.

“The 5-Star Building Code of Australia and the NSW BASIX energy efficiency provisions can easily and cost-effectively be achieved,” he said.

The two reports also independently support Bernard Hocking’s in-field experience as a technical consultant for the Association of Building Sustainability Assessors (ABSA), who says, “Timber, plus smart design and the right insulation in the right place, makes achieving 5-Star and BASIX easy.”

In May 2006, the Building Code of Australia (BCA) raised the energy-efficiency requirements for all new houses to the 5-star standard. At the time, the Australian timber industry protested that the BCA had over-emphasised increasing thermal mass in house design, materials and construction as the primary means of reducing greenhouse gas emissions. There was widespread belief that timber was not getting a fair go.

That was supported by a Productivity Commission report on energy efficiency, saying, “The commission is concerned that the analytical basis for these regulations [computer simulations of energy loads within buildings in each climate code] may be flawed”.

The AccuRate software used to determine 5-Star rating in Australia was developed using a ‘thermal mass’ philosophy. But timber frame construction is generally lightweight and thus penalised in terms of its performance and the maximum rating score that can be achieved.

Greg Nolan, associate professor at the Timber Research Unit, School of Architecture University of Tasmania (UTA), says the system is not deliberately unfair if you only look at operational heating and cooling.

“However, if you look at the whole energy picture, the low embodied energy of timber is not recognised,” Nolan said.

“Also, the dominant view of those involved for many years in thermal performance issues has been that the high mass house is good. This is true if conditions are good, but not the case once you lose a predominantly north orientation.

“So, one might observe that the benchmark has been pegged so that a slab house is generally just acceptable, and its timber floor equivalent is generally just not acceptable.”

Nolan says there are also factors that could improve the thermal performance of timber, and all other houses, that don’t get much attention in the regulations – like air infiltration.

Nolan believes the AccuRate computer model is very sophisticated for what it does but notes that there are some big assumptions. “The stated aim of the BCA is to reduce greenhouse gas emissions by using energy efficiently. But the only types of energy considered when designing housing are heating and cooling energy, modeled to maintain an assumed level of thermal comfort.

“There is no guarantee that people actually operate the building this way, or that heating and cooling are the main forms of energy use. Other types of energy use, such as the energy embodied in the materials and the energy to run appliances, get little or no attention.

“And as The Age reported recently, in Victoria energy usage for new 5-Star houses is actually on average far in excess of older houses – all because people have bigger homes, more downlights and other high-energy gizmos.”

Nolan also questions the veracity of the 5-Star process, particularly as the things that have to be done during construction to meet the requirements are not actually inspected!

“Also, there has been very little testing against Australian construction practice. This means that things can be happening on the building site that negate many of the things that the regulations originally intended. Combine that with no inspections and you can see that the regulations mean well but can’t be guaranteed to deliver on their intent.”

Nolan’s suggestions to building designers looking to improve thermal efficiency of Australian houses in cool and cold climates include:

•  Adequately and correctly install insulation.

•  Wrap the building and tape all joints.

•  Fill gaps around windows, doors and sub floor openings.

• Use double glazed timber windows.

• Put living spaces on the sunny side.

•  Provide eaves and other devices to shade windows that get too much summer sun.

Editor’s note paradigmatic error: A recent study House Energy Rating Systems (HERS) by a group at the University of Adelaide School of Architecture, Landscape Architecture and Urban Design concluded that there was little indication HERS worldwide were based on robust evidence. In fact, a likely source of paradigmatic error can be recognised in all HERS. Rather than producing policy framings on the basis of actual energy consumption, as recorded in ‘real’ households, policy makers and their advisers have focused on specifying the physical properties of construction, informed by data developed by simulation, with the building theoretically emptied of [its] unruly occupants and replaced by model ‘visual’ inhabitants.

“The differences between theoretical results and the real outcomes ‘out there’ if detected are attributed almost entirely, with negligible evidence, to the ‘rebounds’ effects,” say the authors Terry Williamson, Veronica Soebarto, Helen Bennetts and Antony Radford.

“Research by social scientists looking at this issue tells us, not surprisingly, that the difference most likely lies in the fact that houses are inhabited and controlled by real [not virtual] people”, the authors assert.

Meanwhile, the Royal Australian Institute of Architects has called for more government action and incentives to cut energy emissions – particularly in existing buildings.

“Improving energy efficiency in new buildings, particularly new homes, doesn’t always require advanced and expensive high-tech solutions,” says RAIA national president Alec Tzannes.

“Smart design such as sun shading and natural ventilation, better insulation and using recycled building materials can help make a difference, and still allow us to maintain a high quality of comfort.”

A more pressing challenge, he says, is to achieve energy efficiency in existing buildings, where targets and incentives to accelerate refurbishment were needed.

FWPA managing director Dr Glen Kile said work has already begun on the campaign, with the Sydney-based marketing firm Sherbon and Osborn appointed to lead the project. He said the principals of the firm, Chris Sherbon and Richard Osborn, had experience with other forest-related and environmental issues for industry groups and government, and had worked for companies such as CSR, Boral, P&O, and Qantas, dealing with issues management, brand positioning, trends in product use, and changing social attitudes.

“The change from the Forest and Wood Products Research and Development Corporation to Forest and Wood Products Australia allows us to take a more active role in the promotion of wood products,” Kile said. “We will be working with our stakeholders across the forest industry value chain in developing and implementing this campaign,” he said “Our aim is to help dispel some of the myths about wood products and to promote their environmental benefits. Qualitative market research to find out what customers actually think about wood products will be the first step.”

FWPA consulted with peak associations to establish an industry reference group to assist with the development of the promotion campaign. Group members met with the consultants in Sydney for the first time on February 15.

The development phase of the campaign is expected to take around six months.
Kile said a positive campaign would promote the environmental credentials of wood and support the growth of the industry and the sustainable use of wood products in Australia. Industry reference group members for the project include Kathryn Adams, David Angus, Christine Briggs, Andrew Dunn, Neil Fisher, Ron Green, John Halkett, Douglas Head, Ken Jeffreys and Catherine Murphy.

FWPA was established in September 2007 as a not-for-profit organisation aimed at promoting the use of wood products and supporting the Australian forest and wood products industry. FWPA collaborates with government and industry stakeholders to enhance the market for forest and wood products, focusing on sustainability, innovation and research development.

The organisation also provides resources and education about wood products, including initiatives such as WoodSolutions, which offers information and resources for professionals in building design and construction.

*** ***

The National Association of Forest Industries (NAFI) was the ‘cradle’ for the Forest and Wood Products Research and Development Corporation and the Forest and Wood Products Australia

Established in 1986, NAFI was an initiative of senior forest industry executives, state forest services and state forest associations, unions and CSIRO. NAFI’s vision was for an ecologically sustainable Australian society based, in part, on dynamic, internationally competitive forest industries. Activities were funded entirely by its members who between them represented all facets of the forestry industry and produced most of Australia’s forest output.

The NAFI’s charter included representing members by promoting environmental responsibility and the prosperity of Australian forest industries. The key role was to present the forest industries’ views to the people of Australia, governments and public authorities on matters relating to the national development and use of forests and forest products, including plantations. NAFI also promoted community awareness of the forest industries by providing information and educational materials to the broader community.

In all its activities, NAFI presented a critical analysis of available research and other scientific information and provided a national voice for the hundreds of firms and thousands of individuals who comprised the Australian forest industries.

Jim Bowdeen, now senior editor of Wood Central, founded the Australian Timberman in 1977 and in 1987 committed his resources to promoting the aims and objectives of NAFI and all it stood for. He was among the first to be granted associate membership, presented by NAFI inaugural president Dick Darnock, Weyerhaeuser, and executive director Tim O’Sullivan, with the certificate number 074.

Fears of another Yasi were allayed. That cyclone, which crossed the Queensland coast on February 3, 2011, brought a Category 5 storm more than 600 km wide with 95 km / hour winds battering towns along a 350-km strip from Cairns to Townsville.

Crews from the cyclone testing station at James Cook University reported very few structural failures in timber buildings built to ‘modern’ building codes and plywood bracings stood their ground against Yasi’s massive wind surge.

‘Tis the season to be merry – and ‘tis the season for cyclone and severe windstorms,” reflected the author.

Australia’s cyclone season runs from November 1 to April 30, with an average of 9 to 11 cyclones forming each year, and the potential for severe cyclones is higher than usual due to warmer ocean temperatures.

On that November day 12 years ago, heavy thuds came down the line as we spoke with EWPAA General Manager Simon Dorries.

“Don’t worry, we’re impact testing for wind loads,” he assured us.

We found laboratory technician Andrew McLaughlin lifting a 20 kg weight into the top end of a tall cylinder positioned by consulting engineer James MacGregor on a plywood panel.

Whoosh, thud … and another plywood product from an EWPAA member passed the impact test for cyclone shelter construction.

The tests simulate the effects of flying debris at different impact speeds in a windstorm.

“Building and construction in cyclone-prone areas requires materials designed to protect against high-wind impact conditions,” MacGregor said.

“EWPAA structural plywood is designed for such conditions and constantly passes flying debris testing with flying colours,” he said.

The plywood for cyclone shelters must resist wind load requirements specified in AS/NZS standard 1170.2, a joint standard for structural design and wind actions.

MacGregor said plywood offered all the inherent advantages of the parent wood plus enhanced properties in its laminated structure.

“Being a wood-based material, plywood has the ability to accommodate the occasional short-term overload at up to twice the design load,” MacGregor continued.

“This is essential in cyclonic winds or seismic activity. This property is also effective when used as construction flooring or as concrete formwork. Plywood’s laminated structure distributes loads from impact over a larger area on the opposite face, which effectively reduces the tensile stress.”

Simon Dorries said timber strength designs and connections were constantly changing, and engineered wood products were continuously tested in EWPAA laboratories.

He said wind and earthquakes continued to impact on low-rise buildings in Australia and New Zealand. Structural plywood provided a reliable means to brace these building frames in accordance with AS1684 (residential timber frame construction), a four-part standard covering design criteria, building practices, tie-downs, bracing and span tables for timber framing members.

EWPAA structural products are third-party audited under a JAS-ANZ accredited product certification scheme, an industry-wide certification based on International Organisation for Standardisation (ISO) requirements.

This system requires that a production facility maintain a documented process control system, conduct in-mill end-product testing and have rigorous internal audit procedures.

The investigation, Risky Business: EU timber imports linked to the destruction of Borneo’s forests, is based on nearly 10,000 unpublished government records that the NGOs say identify 65 mills and factories processing timber from the clearance of natural forests, mostly in Borneo. Earthsight and Auriga combined those documents with satellite imagery, company records and trade data to map supply chains and trace exports to Europe, the report says.

The groups say the five largest users of deforestated timber in 2024 sold a total of 23,272 cubic metres of plywood, garden decking and door frames to Europe, mostly to firms in the Netherlands, Belgium and Germany. The NGOs say all those shipments were legally documented, but that the consignments were at high risk of containing timber from recently cleared natural forest or selectively logged areas the groups identify as having been subject to damaging clearance.

“This report demonstrates why the EUDR is urgently needed in Europe’s timber sector: to ensure buyers can be confident in where their wood came from; to stop the flow of deforestation wood into Europe; and to end European complicity in the destruction of tropical forests,” the NGOs said. “It also serves as an urgent call to action for any company importing timber products from Indonesia to the EU: these firms must carefully examine their supply chains and eliminate risk that their imports may be tainted by deforestation wood,” the NGOs added.

Earthsight and Auriga say they filmed extensive recent clearances at supplier concessions in central Kalimantan and documented visits to four recently flattened natural forest sites that supplied the five manufacturers in 2024, showing thousands of hectares converted to plantations in areas that until recently formed part of one of the last orangutan strongholds. Local residents told investigators they had lost food, income and materials and described confrontations with loggers and police, saying they felt “powerless” and “just a spectator” in the destruction.

Aron White, Earthsight’s Southeast Asia team lead, said: “There is a real risk that European money is helping to destroy some of the last orangutan strongholds left on Earth.” Auriga campaigner Hilman Afif added: “The destruction of Borneo’s forests is not only an Indonesian tragedy, but also global. Orangutans being driven out, Indigenous peoples and local communities losing their space, and an increasingly unpredictable climate reflect the fragility of our forest governance.”

Companies named in the report — Dekker Hout, International Plywood BV, Seiton BV, Kurz KG, Fepco International and Impan GmbH — did not respond to requests for comment, and Earthsight says many European importers surveyed could not demonstrate the origin of their hardwood supplies or how they avoid deforestation timber. In some cases European retailers and wholesalers told investigators they would continue business with long-standing suppliers despite evidence of large clearances at harvest sites.

The report sets out recommendations including rapid implementation of the EUDR, strengthened supply-chain audits, mandatory due-diligence checks, publication of high-risk supplier lists, and targeted trade measures where links to illegal clearance are confirmed. Earthsight and Auriga say they shared findings with Indonesian authorities and European customs agencies; the report did not include a formal response from Indonesia’s forestry or trade ministries.

The EUDR, due to come into force on 30 December 2025, is intended to ban imports of commodities linked to recent forest clearance or produced illegally, but Brussels has already delayed the law once and is considering another postponement; the European Commission has said the logistical infrastructure for implementation is not yet ready. Environmental groups warn further delays will keep European borders open to high‑risk timber and undermine the bloc’s credibility on climate and biodiversity.

Deforestation in Borneo remains among the world’s highest, driven by logging, farming and plantation expansion, and the island hosts threatened species including orangutans and clouded leopards. Earthsight and Auriga say original footage of forest destruction, satellite time-lapses and a spreadsheet of trade flows supporting the report are available on request.

New Zealand timber giant Carter Holt Harvey Ltd has acquired South Australian softwood processor Forwood Products Ltd for $130 million in a deal that forms a second key plank in its strategy to rebuild its Australian forestry holdings and timber processing interests.

Carter Holt’s purchase of Forwood from the SA government signals the company’s return to timber processing in Australia following the $48 million sale of Sapfor Ltd in 1988 to Auspine Ltd.

Now Auspine, capitalised at $174 million with its own softwood forest resource and timber processing operations near Mt Gambier, where Forwood is also based, is likely to be a key target of the acquisitive Kiwi timber group.

Last year, Carter Holt acquired the Bowater tissue business at Myrtleford in Victoria for $340 million as part of plans to expand its reach in Australia. Carter Holt is New Zealand’s second-largest company and is 50% owned by the US-based giant company International Paper. It is part of a consortium bidding for the NZ government’s forestry assets worth $1.5 billion.

Carter Holt’s chief executive, wood products, Peter Springford, said the company was keen to participate directly in the Australian market with increasing timber self-sufficiency thinnings an opportunity for NZ exports.

Springford said Carter Holt would spend $30 million on a capital expenditure plan at Forwood’s Mount Gambier operations and was particularly interested in developing its expertise in laminated veneer Lumber (LVL).

The SA Treasurer Stephen Baker said $108 million of the $130 million sale proceeds would be used for debt reduction and lifted the total of asset sales by the SA government in the past two years to $1.8 billion.

Forwood Products reported a profit after tax and before of $13.9 million on sales of $136.2 million in the year ended June 30, 1995. It employs about 900 people.

No figures are available for 1995-6, which was a horrendous year for timber company profits due to falling lumber prices and stagnant housing demand.

Forwood was spun out of the South Australian Timber Corporation three years ago.

The Forwood purchase includes a contract with the SATC to take 450,000 to 500,000 cubic metres of saw log from the SA government forest over the next 15 years, with a 15-year option.

Carter Holt now joins Auspine and Australia’s largest softwood timber group, CSR Softwoods, as the major player in the Green Triangle region of South Australia and Victoria.

Wood Central senior editor Jim Bowden caught up with the family, and its patriarch Snow Merrett, in this article published almost 30 years ago.

The Green Triangle region straddles the border of southeast South Australia and southwest Victoria. It contains some of Australia’s most productive radiata pine forests and has been a major softwood plantation region since the early 20^th century.

Based at Penola and operating mainly in Victoria, Snow Merrett harvests 90,000 cubic metres a year of second thinnings and 125,000 cubic metres a year of third thinnings under contract to Auspine’s company plantations.

All product from Snow’s Merrett Logging Pty Ltd operations is delivered to Auspine facilities in the area. Auspine’s silviculture management consists of three thinnings and a clearfall. The first thinnings go for pulpwood, with whole tree chipping and transport of the chip to Auspine’s Portland export facility.

The Merrett Logging second thinning operation provides about 45% of product as small sawlogs for the Tarpeena mill, 15% as treatment log for Kalangadoo and 40% as pulplog, which is stacked on road edge for another contractor to process into chip for Portland. Snow’s third thinning operation produces 85% sawlog with the balance mainly chip and a small amount of treatment log.

To meet an annual production for 215,000 cubic metres of delivered product, Merrett Logging runs a fleet of six harvesters, five forwarders and six log trucks at a capital cost of more than $5 million and employs 20 operators. This allows the oldest of the harvesters to be used for training new operators and as a fulltime backup to harvester crews that operate on a single shift basis. The entire fleet of harvesters and forwarders are John Deere machines, making Snow Merrett one of the biggest JD customers in Australia.

The harvester fleet includes a 608A with 762B Timberjack head, 608S with Waratah 622B head, 1270A with 762B Timberjack head, two 1270Ds with 758 Timberjack heads and a 746C head on a 15-tonne Kato excavator.

The forwarder fleet consists of a 1210, six-wheel 1410, eight-wheel 1410 and two 1710Ds. Snow feels that the optimum life of these machines is between 12,000 and 15,000 hours, which is reached after about five years of operation. He currently has some of his equipment at or past this target and is considering a replacement program.

Most of the fleet maintenance is carried out in the company workshop at Penola. A new workshop will be completed before Christmas. Heavy maintenance goes to South East Forest and Hydraulic Centre, an agent for John Deere and Hitachi parts and service.

Snow is very happy with his John Deere fleet and the arrangements for its after sales service and backup.

The haulage fleet consists of five B-doubles, all with Kenworth prime movers (a T950 and four T650s), and a single trailer Western Star 3800S. The conventional Plunkett trailers were all manufactured in Mt Gambier. Three of the B-doubles are fitted with disc brakes and all trailers have airbags. All prime movers have central tyre inflation (CTI) to handle the 10-15% of off -highway operation, mostly on sandy tracks, while providing smooth and efficient highway running.

Auspine provides an annual cutting plan that guides Merrett’s harvesting operations and sets out summer and winter logging activity and areas of all weather access. Regular meetings consider environmental and occupational safety issues and provide the opportunity to review progress and adjust plans to meet production and market requirements.

Merrett Logging is a successful family business. Oldest son Stuart has been involved for 18 years and looks after training and log extraction activities with the machines. John has 12 years and focuses on maintenance, looking after mechanical, electronic and optimisation aspects of the machines. With four years behind him, Adam is a forwarder driver and back up truck driver.

Snow Merrett started work in July 1974 as a chainsaw faller in the old South Australian Woods and Forests Department plantations around Mt Gambier. In the mid-1980s he moved into post peeling in the SAPFOR plantations before they became part of Auspine. His first move into mechanical harvesting came about five years later with Auspine and he has built up his experience and operation progressively since then.

While Snow thinks his business is fairly settled now, he still has one eye on the future. With succession planning under way, he is keen to do a bit more towards growing the business. He is well aware of the explosion of bluegum plantings in the region that is about to come on stream and skilled people and machinery will be required to harvest this resource.

Through his involvement with the Australian Forest Contractors Association and the local Logging Industry Training Association, Snow is helping the region to prepare for this growth. With almost 300,000 ha of radiata pine and bluegum plantings and proposals for further expansion of processing activity, it is little wonder that the timber industry is one of the mainstays of the regional economy.

Together with Timber Communities Australia, local contractors such as Snow Merrett are also working to get their industry in front of the local community by arranging displays at local shows. By demonstrating the job opportunities and economic impact, they hope to be able to assist in retaining their younger people to see a future in the local area, particularly in the timber and forest sector.