Image for APRIN:  Buyer rejects bankroll claims.  No way, says Vica. Gunns slashes and burns

The business poised to buy Gunns’ Triabunna mill has rejected claims the Tasmanian Government is set to bankroll the sale.

The family-run business Fibre Plus Tasmania attracted criticism after revelations it had asked the Government for a loan to help it buy the woodchip mill on the east coast.

But a joint owner, Ron O’Connor, says the loan would make up a “relatively small” proportion of the mill’s overall sale price.

In a statement, he said the “lion’s share” of the money would come from private banks and the business’s own savings.

The statement said any government loan would generate a commercial rate of interest.

“A loan is just that, a loan. It is at a commercial rate of interest and it has to be repaid,” he said.

“It is not a matter of taking money away from other Government activities as some people are trying to portray it.

“In fact, we will not only be repaying any loan, but contributing significantly to the local economy which supports communities, creates jobs and generates taxes and other revenue for Government.

“As a family business, we would not be doing this if we believed we would not make a profit.”

Mr O’Connor’s spokesman says the conditional sale could be finalised as soon as today.

• Gunns Smithton cuts

Gunns has confirmed it is cutting its workforce at its Smithton sawmill, fuelling speculation a local consortium is set to take over the site.

Gunns management visited the hardwood sawmill at Smithton yesterday to break the news that 20 of its 65 workers are being made redundant, with the plant expected to close early next year.

The company has made no secret of its intention to sell off assets in case it cannot find a joint venture partner to help finance the $2.3 billion dollar Tamar Valley pulp mill, and reduce debt.

Gunns will not comment on a potential buyer, but it is believed a local consortium is looking to acquire the site to develop a powdered milk processing factory.

The ABC understands the details are still being finalised and an announcement is expected by the end of the week.


• Earlier on Tasmanian Times: APRIN: The questions that must be answered


The Wilderness Society today rejected the notion of the Giddings government loaning public money to a shelf company in order to buy the Triabunna woodchip mill, a native forest venture on the market as international woodchip sales have collapsed and it is deemed unviable.

The loan threatens public confidence in future Government investments in the much needed industry restructure and there must be transparency on both the loan details and the commitments of Forestry Tasmania to supply native forest woodchips.

We do not support the Giddings governments use of public money to facilitate the purchase of a native forest dependent woodchipper that would otherwise fail to achieve finance.

In such challenging economic times, Ms Giddings must demonstrate a changed approach to public spending and target any government money at fixing current problems, not entrenching them.

In May, The Wilderness Society suspended its involvement in talks calling on government commitment to the implementation of the Principles plan. However, funding woodchip mills was not the commitment the Society was seeking.

Investing in exit assistance for sawmillers and worker support will deliver real outcomes for both the environment and timber communities at this time of crisis, said Mr Bayley.

Unless we achieve true industry restructure that sees our forests protected and a viable future for industry, history will continue to repeat and we will see the taxpayer continue to support native forest logging that cannot stand on its own feet.

In the interests of probity, the terms of this loan and Forestry Tasmanias wood supply commitments that underpin the woodchip mills sale must be placed on the public record before any Government decision is made, concluded Mr Bayley.

Gunns’ jobs face axe

More than 100 workers at Gunns’ sites across Tasmania could be out of work within four weeks, as the company tries to sell off most of its assets.

Gunns has confirmed sites at Southwood, Austins Ferry, Deloraine, Somerset and Massy-Greene have up to four weeks before they close, if buyers cannot be found.

The site at Smithton will also lose 20 workers, bringing possible job losses over the next four weeks to about 131.

The forestry union’s Scott McLean says the closures increase the urgency for a forest peace deal and a compensation package for the industry.

“What we need is the Federal Government to completely engage and to provide assistance, worker assistance packages, to these people and we also need to try to get a better deal for them in respect to their redundancies,” he said.


• Earlier on Tasmanian Times: Is the Gunns clock ticking

Follow the Share Price HERE