Latest News• Add My News • Search Old News Gippsland › Latest news › Philip DavisChina timber contract at riskTimber company Fenning Bairnsdale’s long-term export contract with China is in jeopardy because VicForests has failed to guarantee enough wood supply to meet the contract. Timber company Fenning Bairnsdale’s long-term export contract with China is in jeopardy because VicForests has failed to guarantee enough wood supply to meet the contract.The Member for Eastern Victoria, Philip Davis, has called on the State Government to make the necessary wood available to Fennings in line with its commitment to guarantee forward wood supplies under the newly-released timber industry strategy. Fennings announced late last year it had secured a contract to export a large volume of part-processed timber to China, which would require a supply of close to 300,000 cubic metres of sawlogs over the next 10 years. Following discussions with the company, Mr Davis told Parliament the Government had indicated its support for the export venture at the time of its announcement, but VicForests had failed to allocate enough wood for it to proceed. He said Fennings had secured a supply of slightly more than 170,000 cubic metres of logs over the next seven years through VicForests’ auction system—some 45,000 cubic metres less than was needed to fulfil the contract with China—and the company had been allocated no wood for the remaining three years. This left it with a total shortfall of 130,000 cubic metres over the 10-year term of the contract. "VicForests has failed to satisfy the company as to the future security of wood supply," Mr Davis said. "It has auctioned comparatively small volumes of wood in East Gippsland over the past two years, and it appears no more auctions are proposed in the immediate future. "The result is that Fennings, and undoubtedly other timber companies in the region, are being denied resource tenure, which is creating uncertainty and leaving the companies unwilling to commit to further investment in additional processing capacity. "An underlying principle of the timber industry strategy, unveiled just two months ago, was that it would strengthen industry confidence. "The Government committed in the strategy to develop 40-year working forest plans and that VicForests would auction timber for forward delivery over periods up to 20 years. "The strategy is already in tatters as timber companies continue to operate with uncertain supply arrangements." The issue has been referred to the Minister for Agriculture, Joe Helper, who now has responsibility for VicForests, for a formal response. Source: http://gippsland.com/ Published by: kevin.balshaw@parliament.vic.gov.au
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