Eden Chipmill’s ongoing losses could spell the end of the EG logging industry

7 May 2014

The 7 storey high pile of woodchips at the wharf in Eden NSW – much of this from East Gippsland’s old growth forests.

A major market for the logging industry in East Gippsland seems set to become extremely unreliable, says Environment East Gippsland, creating major uncertainty for both VicForests and the logging industry.

The Eden woodchip mill has recorded its third loss in three years. The Japanese owned company, Nippon, owns the Eden based South East Fibre Exports (SEFE) mill, previously known as Daishowa.

“Around half of its chips come from East Gippsland's forests but the volume and quality it now demands means that the market for East Gippsland’s native forest woodchips is diminishing every year”, said Jill Redwood. “Much of this is due to cheaper and better quality woodchips being available from other countries’ eucalypt plantations that are closer to Asian pulp and paper mills”.

The latest financial loss was reported in SEFE’s Annual Financial Statement to ASIC recently.

“The loss for 2013 was $1.13M. Its exports for the year were down 60,000 tonnes to 705,500 tonnes. It looks like this is a sinking ship”, said Ms Redwood. “Attempts to diversify its activities or find new buyers haven’t worked”.

“SEFE and its East Gippsland industry reps have tried the wood fired power station idea but this was unviable. The wood pellet processing plant closed and sits idle. Now SEFE hopes to share some of the chipmill’s wharf facilities with the planned Nowa Nowa mine to export iron ore, but this could also fail.”

“As well as the Eden export woodchip mill, Nippon owns the large Maryvale paper factory that produces Reflex paper. But that factory lost $26.5M in 2013 and $20M in 2012. Australia and native forest logging is millstone around the neck of this company”.

“Any way you look at it, clearfelling of public native forests is a dead loss; it’s reliant on large subsidies from the public purse, it destroys native wildlife, has been in decline with shrinking job numbers for years, and neither VicForests or the woodchip company can make a profit”.

“It could be high time for the region to accept that this is an industry that’s past its use-by date.”

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