South West sawmills in crisis as Forest Product Commission fails to deliver on log supply obligations

The WA forest industry is calling on the State Government to support the sector as some businesses are forced to cease operations because the Forest Products Commission is failing to deliver on log contracts. The Forest Industries Federation of WA, an advocacy group for the State’s timber industry, said several sawmills in the South West, and other contracting businesses, had to stop production because of the lack of log supply, while desperately trying to retain their employees. One jarrah sawmill, with 40 employees, had to close for 12 days. Harvest & haulage contractors have also been affected. Ian Telfer, chairman of FIFWA, said the issue was caused by inadequate planning by the FPC over the last 12 months, including delays with the approval, planning and preparation of harvesting areas. The FPC is an autonomous commercial entity governed by an independent board of commissioners and accountable to the WA Government through the Forestry Minister. Sawmills normally build up a supply ahead of winter, when restricted access means it becomes more difficult to harvest. However the FPC’s failure to deliver on its contractual obligations meant sawmills were unable to accumulate a stockpile, while the wet weather meant very little was now being harvested. “The issue has come to a head with mills running out of wood. Mills are trying to keep their workers busy doing other jobs, but that can’t last forever,” Mr Telfer said. “It’s not good for business and it’s not good for employee confidence. There is a fear by these businesses of losing good employees because they obviously want some certainty.” Mr Telfer did not see the situation being rectified for six to eight weeks, when weather became warmer and harvest could fully resume. FIFWA executive director Melissa Haslam said she wanted State Government support for the affected businesses and was seeking a response from Forestry Minister Dave Kelly. Mr Kelly said the FPC was not in breach of any contracts to deliver sawlogs to South West mills, however a number of factors had led to a short-term shortage in supply. These included increased demand and wet conditions causing harvesting difficulty. “Declining sawlog yield is due to a mixture of issues including inventory and modelling, past harvest practices, log specifications and a cumulative climate change effect on sawlog quality with increased fire,” he said. He said not withstanding these factors, the FPC was looking to help sawmill customers impacted by the jarrah shortage though extended trading terms from 30 days to 60 days, to help businesses with their cash flow. The FPC is also covering the additional costs to contractors for working at the weekend where this will provide additional sawlog availability for sawmills, he added. “The State Government will continue to consider other measures to help those in the industry impacted by current shortages,” Mr Kelly said. Steve Martin, WA’s Shadow Minister for Forestry, said he recently toured mills in the South West and everywhere he went there were concerns about the lack of logs. “These mills are really hurting, they have no logs because of mismanagement of the supply,” he said. “Margins in this industry are tight anyway but now these businesses are in real danger and risk losing their workforces. The State Government needs to reach out and do what it can to support this industry.”