Image for $11m loser Ta Ann the new Gunns: Brown

The reporting of yet another loss for Ta Ann despite massive public subsidies is raising the spectre of the company as the new Gunns of Tasmania’s native forest, Greens Leader Bob Brown said today.

“Ta Ann has reported an $11 million loss in the last financial year, which follows on from losses in 2006, 2007 and 2008,” Senator Brown said.

“Since it began operation in Tasmania, Ta Ann has made a net loss of about $18 million, despite receiving $10 million in direct public subsidies and being housed in premises which cost Forestry Tasmania $22 million and which it runs at a loss.”

“To get itself to a profitable position the company has reported that it needs to increase its sales price by 28% at a time when markets for wood products are slow to non-existent. That won’t happen. It would need a huge drop in the value of the Australian dollar.”

“When public money is poured into poor business models in forestry, we have less to spend on our hospitals, schools and national parks,” Senator Brown said. 

Ta Ann Tasmania facts and figures

•    Ta Ann Tasmania’s accumulated net losses are roughly $18 million. 

•    In 2010, with both of its mills fully operational, full wood supply and full sales, Ta Ann made a loss of $11 million.

•    Ta Ann received a direct grant of $10.3 million to build its Smithton Mill.

•    The Huon Wood Centre and the Smithton saw mill sites are owned by Forestry Tasmania’s Newood Holdings. The Newood sites were built with Tasmanian Community Forest Agreement funding of about $22 million but Newood reported a net loss before tax for 2009–10 of $0.5 million and in 2008–09 a loss of $0.7 million.

•    Ta Ann began operation in Tasmania in 2006 at its Huon mill.

•    Ta Ann’s Smithton mill began operation in 2009.

•    Ta Ann Tasmania sells its veneer panels to its parent company in Malaysia.

Ta Ann’s directors have forecast a profitable trading position for the year ended 31 December 2011 on the basis that the company will:

•    Be supplied with and be able to process approximately 300,000 cum of raw material timber

•    Experience cost efficiencies of 6% as a result of higher production volumes

•    Experience a cost saving of $5 a cubic metre on repairs and maintenance for each mill and achieve a 28% increase in its average sales prices as the market for the Company’s product improves”.