The World Today - Tassie's timber industry facing tough times

Felicity Ogilvie
The World Today, February 3, 2012

ASHLEY HALL: An independent report has found that the Tasmanian forest industry is under severe pressure because of the collapse of international woodchip markets.

The report concludes that a series of factors have led to the collapse of woodchip exports to Japan and the Government can't say when new markets to China are likely to emerge.

Compounding the situation, the state's only native forest woodchip exporter has temporarily shutdown, forcing some sawmillers to lay off staff.

Joining me now is our Hobart correspondent Felicity Ogilvie.

Felicity, you've been at a briefing with the Premier this morning. What has he said about why - what she said - about why these woodchip markets to Japan have collapsed?

FELICITY OGILVIE: Well, Ashley there have been various reasons why the woodchip markets to Japan have collapsed. At the forefront is the forefront is the fact that Tasmania used to export a lot of native forest woodchips but the Japanese customers now prefer plantation timber because it makes better pulp.

There are other significant factors as well. The high Australian dollar is one and there has also been factors that weren't specifically mentioned in this report but about environmentalists campaigning against the Tasmanian forest industry in Japan.

ASHLEY HALL: Now the woodchip market is a big employer in Tasmania. What effect is this having on the industry and job security there?

FELICITY OGILVIE: Well, it is have a shoot impact at the moment because woodchips are actually a by-product from saw logs, things that make flooring or timber that is used in the construction industry or to make people's kitchens.

And what has happened is that saw mills around the state that are cutting up saw logs, they can't export their wood chips at the moment because the only native forest woodchip exporter in the state has had to temporarily shut down because it simply cannot have the markets it needs to export the woodchips.

So the Premier estimates that it could be up to 3,000 jobs on the line in the native forest industry in Tasmania at the moment and she said that there is even if the woodchip exporters could reopen up in Tasmania, that the situation is dire because the markets aren't there at the moment.

This is a bit of what she had to say.

LARA GIDDINGS: Because the problem is, we don't have the market to sell the woodchip to, though we are hopeful that we will be able to sell woodchip to China but we need to be able to sell it in the volumes that enable our industry to be sustainable and for the foreseeable future, that is not looking very likely.

ASHLEY HALL: Tasmania's Premier Lara Giddings. And Felicity what is the Government doing to address the situation?

FELICITY OGILVIE: Well Ash, in the future the Government can't say when it will be but it looks like there will be quite a strong market for Tasmanian woodchips in China, but at the moment the Chinese aren't paying enough to have that as a sustainable option.

But the Deputy Premier is going over to china and Japan to meet with different companies to I guess spruik the Tasmanian market over there in a hope that that could in some way solve this problem with woodchip exports from Tasmania.

ASHLEY HALL: Felicity Ogilvie, thankyou for joining us from Hobart.