Pulp mill site works, September 011. Pic: Code Green

I’m not much interested in the machinations of who buys logs of what size and from whom.  I’m an economist.  As such, I get excited when corporations find new and interesting ways of turning inputs into something more valuable.

What bothers me are the following facts:

1.  FEA is broke.  Gone, forever.
2.  Gunns closed today at 11 cents, despite a balance sheet showing some $800 million worth of freehold land, planted with various species of gum trees.
3.  Forestry Tasmania, otherwise known as a sheltered workshop for Labor cronies, couldn’t make a profit even if it were gifted the entirety of Tasmania’s forests.  Oh, I forgot, it was.
4.  The backbone of the plantation industry is dead.  Not a single MIS promoter is offering plantation investments in Tasmanian anymore.  This contrasts with $350 million in 2004/05.
5.  Ta Ann would be totally unviable were in not for public grants and subsidies.  Happy to provide the numbers on request.
6.  On my numbers, the remaining handful of employees in the native forest sector contribute a net loss to State Final Demand.
7.  The total contribution of the much-vaunted `special timbers industry’ is a net loss to the State of around $250 million per annum.

I could continue, but I have trees to hug.

The few hardcore pro-loggers with half an ounce of intelligence will soon realise the world has changed, scrapping resources at a loss is not sustainable, and anyway, who really wants to go to work wearing a fluoro vest?

It’s not hard to prove that ceasing native forest logging, ending subsidies to the timber industry and focusing on the future is a better option than that offered by the intellectually challenged members of Willie Hodgman’s cheer squad.

Love Jarvie.

This observation was posted as Comment 58 on this article, HERE

• As Australian operators prepare for the year ahead, IBISWorld unveils its annual list of the top five industries set to soar in 2012, and the five expected to sink ...

Industries to fall

Pulp, paper and paperboard manufacturing

Australian pulp, paper and paperboard manufacturers will struggle to remain relevant as more Australians trade-in printed books and other documents for iPads and eReaders, affecting demand for industry products. IBISWorld forecasts industry revenue will fall 3.7% over the coming year.

Australian paper producers have been battling for some time now against foreign producers that have significant cost advantages. The price of woodchips is expected to continue to remain high in 2012 – resulting in continuing high prices for printed materials. This will be an additional reason for consumers to go electronic.

Delays in the development of a number of key production sites such as the Gunns mill in Bell Bay, Tasmania and the Protavia mill in Penola, South Australia have also dented industry productivity.

Read the full analysis HERE

Gunns’ all-time low share price, HERE

• Libs fear bushfire threat from peace deal

The State Opposition claims the forest peace deal to end almost all native forest logging in Tasmania will increase the risk of bushfires.

Spokeswoman Elise Archer says Forestry Tasmania is shedding staff as a result of the federally-funded deal, in turn hampering its ability to fight fires.

The state-owned business is currently monitoring several fires across Tasmania.

Ms Archer says the forest deal is also driving forest contractors out of the state who are often volunteer firefighters.

“There’s no doubt that there will be less jobs at Forestry Tasmania as a direct consequence of locking up our forests.”

“The intergovernmental agreement process has been a sham and a disaster from the start and I have confidence, and I’m sure most Tasmanians have little confidence, that the Government is able to deal with this process.”

The Acting Premier, Bryan Green, says the Liberals are being mischievous and are politicising bushfires.

He says the peace deal sets aside $7 million a year to maintain any new reserves created.

“There is a whole range of things that can happen in the natural forest.”

“In fact the forests themselves naturally regenerate as a result of fire.

“We have to manage that in a way that ensures that peoples’ safety is not compromised and the way to do that is providing funds from the Commonwealth to assist us through that process and that’s what we’ve done.

“Have a look at the Liberals’ policy, not a cent in it.”