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Timber manufacturer sheds staff amid problems with supply

Thursday, 28 Apr 2016 08:40:32 | Helen Merkell

About 20 workers will be laid off over unfavourable supply contracts. (Australian Solar Timbers)

Hardwood manufacturer Australian Solar Timbers (AST) is letting go of workers at Kempsey on the New South Wales mid-north coast because it cannot secure the timber it needs.

Company director Douglas Head said NSW timber contracts gave favourable treatment to competitor, Boral.

He said that had created a very difficult business climate for others in the hardwood industry.

"This is much wider than AST, this is really about the hardwood industry," Mr Head said.

"It has been divided up into Boral [that] is a corporate, [that] has this contract and every other company including ours does not.

"We compete in the same market, we get the worst logs, they get the best logs, we pay the same price."

Mr Head said he would have to lay off around 20 workers due to difficulty accessing the timber he needed for flooring and furniture.

"The Boral contract also specifies length," he said.

"They get the best lengths, they get the best diameters, they have freight advantages, they have more flexibility to take more or less in a good year or a bad year."

Mr Head said the industry was being administered in two different factions that gave some companies a monopolistic advantage.

"The contracts are completely different ... that needs to be rectified," he said.

Previous Labor government contracts to blame, MP says

Nationals Member for Oxley, which takes in Kempsey, Melinda Pavey, said she was well aware of the issue.

"The contracts that NSW Forestry Corporation in Sydney have done, which is affecting not only companies in my electorate but up and down the North Coast," she said

Ms Pavey said she was working hard behind the scenes to find a solution.

"I have ensured that the Minister for Forestry and the Minister for Small Business, have gone to Australian Solar Timbers factory in Kempsey," she said.

"I have also had personal meetings with the Treasurer and the Finance Minister."

Ms Pavey also said she was deeply concerned about those losing their jobs.

"I am not happy, my heart goes out to those families affected, those 18 men in the saw-milling part of AST, that have temporarily been stood down," she said

She blamed the situation on the former Labor government.

"This was a very bad deal done by Bob Carr and the Labor Party in 2003," she said. "They committed more supply of timber to companies than was actually available.

"I am fighting very hard to ensure the future prosperity of the hardwood industry on the North Coast."

In a statement, New South Wales Minister for Primary Industries Niall Blair said the NSW Forestry Corporation had to work within the parameters of the contracts that the previous government had entered into.

Mr Blair said the issues from the 2003 decisions were being addressed by the current State Government and amendments to contracts were being made to "re-position the industry on a long term sustainable footing".

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