LAUNCESTON, Australia,
July 30, 2009
(Press Release) -
The Port of Portland Pty Ltd (POPL) today announced that Gunns Limited is its preferred provider of a second hardwood chip facility at the port.
Over the next three months, Gunns and POPL will finalise the contractual arrangements and the design of the new facility. An agreement is expected by the end of October and construction is anticipated to commence before the end of 2009.
The Chief Executive Officer of POPL, Mr Scott Paterson, said today's announcement was the outcome of an extensive process following the demise of Great Southem and Timbercorp.
"We called for expressions of interest and then asked 20 parties to submit proposals. Nine strong proposals were received and a comprehensive evaluation was done before we selected Gunns," said Mr Paterson.
"We expect to be handling over 3 million tonnes of plantation-grown hardwood chips per annum from 2011 and currently the port can only handle one quarter of this volume. Therefore we needed to urgently seek ways to increase our capacity to handle the estimated A$300 million in exports.
"Gunns proposes to fund and operate the new facility. Its concept plans build on the extensive work already undertaken by the port in designing a facility for the Managed Investment Scheme (MIS) companies - Great Southern, ITC and Timbercorp," said Mr Paterson.
"When Great Southern and Timbercorp went into administration, it was essential for POPL to develop an alternative strategy to secure our future and that of our customers.
"We are confident that we now have a very robust plan for the future of the port and all stakeholders," said Mr Paterson.
Gunns Linlited is Australia's largest vertically integrated forest and forest products company. It already has a strong presence in the Green Triangle Region (GTR) and its subsidiary, Auspine, has exported plantation-grown softwood chips through Portland since 1983.
Gunns Chief Executive Officer, Mr Greg L'Estrange, today welcomed the POPL announcement saying that it was a strong and positive step forward in developing the region's growing export trade.
"Gunns owns almost 50,000 hectares of plantation land in the GTR and we operate the region's largest pine sawmill, timber treatment plant and export woodchip facility," said Mr L'Estrange.
"Over the past 26 years we have exported more than 10 million tonnes of pine woodchips through the Port of Portland.
"This new facility will provide much needed additional capacity at the port to handle the region's plantation-grown blue gum hardwood chips," said Mr L'Estrange.
The new facility will complement the existing woodchip facility at the Port of Portland which is operated by GrainCorp and South West Fibre (a joint venture between Midway of Geelong and Japanese trading house, Mitsui). This facility is to be expanded to handle an estimated 1.5 million tonnes including 1.3 million tonnes from the new South West Fibre chip mill at Myamyn due to open shortly.
When the new hardwood chip facility is completed there will be two competing service providers for the storage and export of hardwood chips at the Port of Portland. This will give growers a choice and drive customer service and competitive pricing.
The Green Triangle Region produces hardwood chips grown exclusively from blue gum plantations which are a renewable resource. No native hardwood is harvested in the GTR for export through the Port of Portland.
These chips are the raw material for high-grade office paper. The plantation blue gum estate in the GTR is over 170,000 ha, making it world-scale in size, and the region will produce a significant proportion of the Japanese demand for hardwood chips in the future.
