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Timber Processing Industry

The Socio-economic Impact of the Industry

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The processing industry currently includes: pulp and paper manufacture; softwood sawmilling; hardwood sawmilling; truss and frame manufacture (mostly softwood); softwood and hardwood pallet manufacture; timber preservation; and manufacture of landscape mulch and potting mix using pine bark, sawdust and oversize or undersize hardwood chips (Figure 20 and Figure 21). There are no panel mills in Gippsland to use pulpwood or sawmill residues in the manufacture of particleboard, medium density fibreboard (MDF) or oriented strand board (OSB). There are also no plywood mills in Gippsland to use the largest logs.

The ownership of the Gippsland processing industry is fragmented, apart from pulp and paper where Australian Paper is the only operator. Australian Paper is a wholly owned subsidiary of PaperlinX which has become an international paper merchant following the demerger from Amcor and subsequent acquisitions of several overseas paper merchants.

The fragmented ownership of Gippsland processing is unlike the plantation sector where ownership and management of the plantations, particularly in Central Gippsland, are concentrated under HVP, and the management of all the harvestable public native forests are under the management of VicForests.  Despite the fragmented ownership, processing in Gippsland exhibits a reasonable degree of integrated local processing including by-products (Figure 20 and Figure 21):

• Australian Paper at Maryvale, and preservation plants at Traralgon, Rosedale and Alberton, provide a local market for plantation thinnings;

• Australian Paper provides a local market for chipped sawmill residues;

• PineGro and O’Conner at Morwell provide a local market for bark residues from the pulpmill, softwood sawmills and preservation plants, and oversize and undersize chips from the pulpmill;

• Emerging truss and frame plants at Warragul, Traralgon, Heyfield and Bairnsdale provide local markets for structural softwood sawntimber manufactured in Gippsland;

• Fishers at Morwell provide a local market for green softwood sawntimber (unsuitable for structural sawntimber) which they manufacture into pallets;

• Fishers also provide LOSP treatment of structural sawntimber;

• The pallets manufactured by Fishers deliver a local supply for the shipment of paper manufactured at nearby Maryvale in Gippsland.

Opportunities exist for future rationalisation of the Gippsland forest and forest products industry to deliver greater economies of scale, economies of scope, synergies at the interface of existing businesses, and streamlining logistics of harvest and haul and product transport.

Wood processing tends to be concentrated in Latrobe LGA, particularly for softwood. The hardwood sawmills provide greater geographic spread and are better represented in Wellington and East Gippsland LGAs.

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