Forestry jobs under threat
HOPES for a large timber processing plant at Kyogle hang in the balance with shares in plantation giant Forest Enterprise Australia remaining in a trading halt as the company struggles to refinance its debt.
FEA, which has about 29,000 hectares under plantation in the Northern Rivers, has plans to build a processing plant employing about 200 people.
“It would be a shame if the company goes under because the plant would have employed about 200 people directly, and indirectly another 1400,” Timber Communities Australia’s NSW regional co-ordinator Tony Wade said.
FEA, which is based in Tasmania but has its national forestry headquarters and business development division in Lismore, has debts of $216 million.
The company requested that its shares be suspended from trade on February 24 pending an announcement.
It later asked for the suspension to continue to March 22 ‘pending the resolution of current discussions with financiers’.
Last Friday FEA informed the stock exchange that the government of Tasmania, where it operates a $72 million timber mill and wood fibre processing plant, had refused a request for financial assistance.
Mr Wade said FEA had been hurt by investor fears following the collapse of rivals Great Southern and Timber Corp, and reluctance by banks to refinance debt in the wake of the credit crunch.
A company spokesman said it directly employed about 19 people in the Northern Rivers and a fluctuating number of contractors.
Last month it had about 40 contractors and suppliers on its books, but Mr Wade said many of these have not had their contracts renewed as the company no longer had funds to prepare new sites for planting.
Kyogle councillor Ernie Bennett said the community had been pinning its hopes on the processing plant.
“The community had suffered a loss of jobs and services as plantations moved into the region and we were hoping that we could get some benefits in the end with a value-adding processing plant,” he said.
Still, Mr Wade remains optimistic.
“My gut feeling is that they will pull through,” he said.
Mr Wade said despite the reluctance of banks to lend and investors to put money into the industry, he believed demand for plantation timber would continue to grow as the industry was increasingly locked out of native forests.