As the Australian market falls 2 per cent, Gunns heads the list of losers in the All Ordinaries Index. Down 10 per cent, buying drying up, and the short sellers already stocking up on Bollinger.
Log supply cut blow for Gunns
BY ALISON ANDREWS CHIEF REPORTER
03 Aug, 2011 08:19 AM
IT is understood Gunns Ltd has lost at least eight days’ production at its Bell Bay sawmill because it has twice been refused a supply of logs.
While Gunns would not comment yesterday, it is understood production at the former Forest Enterprises Australia mill was lost when Timberlands refused to supply pine logs to the mill.
A Gunns spokesman refused to comment when asked whether the company’s wood supply had been affected because its supply bills had not been paid.
The spokesman said that the company would not comment on commercial relationships.
Industry sources say that the company appears to be gathering finance in the month that it is supposed to have made a substantial start on the proposed $2.3 billion pulp mill at Bell Bay.
This includes delaying payment of accounts to a number of contractors and suppliers.
Gunns’ managing director Greg L’Estrange said last month that the company was confident of making a start on the $30 million first stage of mill construction before its state permits expire at the end of August.
The permits require major construction works to be under way by then.
The Gunns spokesman said that he expected successful tenderers for the works to be announced this month with industry sources suggesting that the companies would be notified this week.
The signing expected this weekend of the intergovernmental agreement on forests should end speculation on the size of the payout to Gunns.
Smithton sawmill saved by mogul
03 Aug, 2011 12:00 AM
CIRCULAR Head was on the brink of losing another 100-plus direct jobs until the boss of one of Australia’s biggest retailers reversed a decision driven by environmental activists to stop stocking Tassie timber furniture.
Britton Timbers managing director Glenn Britton said yesterday he faced the serious prospect last week of closing his Smithton sawmill after Harvey Norman, lobbied by non- government organisation Markets For Change, initially agreed to stop selling Tasmanian timber furniture products.
It wasn’t until urgent action by Mr Britton, Tasmanian Primary Industries Minister Bryan Green, the Gillard Government and others, that Gerry Harvey, while in Paris with his wife, overturned the decision several days later.
Britton Timbers’ furniture- related product sales, predominantly at Harvey Norman stores, are valued at $3 million a year.
Mr Britton said if the decision was not reversed he would have shut his Smithton sawmill rather than watch it “die”.
“I’m not joking, I would have had to have closed my plant,” Mr Britton said in Hobart yesterday before a meeting with Premier Lara Giddings to again thrash out the forestry issues.
He said he feared a “domino effect”, whereby Harvey Norman would have simply been the “first cab off the rank”, with pressure then applied to other stores such as big hardware stores and flooring outlets to ban Tassie native timber-related product.
Mr Britton said, for example, 70% of dining furniture sold at Harvey Norman stores Australia-wide came from Tasmanian timber.