woodchipping & the recession


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Media Woodchip power Eden woodchipping Eden Wood Supply Agreement Plantations

 2009, 2010 truck counts

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During the 2000s recession, the woodchipping industry was severely hit, often closing down for extended periods. Every day the woodchipping industry was shut down saved up to 3,000 trees and the wildlife that those trees support.
The global downturn hit the paper/woodchip industry very hard. At Easter 2009, the chipmill announced it would close for almost 3 weeks, longer than the national shutdown of 10 days. For much of the rest of the year, it worked a 4 day week. Unfortunately, activity levels are now returning to normal

Eden woodchipping

  • In Eden, anecdotal reports of 6 woodchip carrier visits cancelled in 2009.
  • Two ships were moored off Twofold Bay (location off South East Fibre Exports chipmill) for extended periods in January- February, one for 28 days. One left empty, another loaded some pine chips.
  • Anecdotal observations of greatly reduced log truck numbers travelling to the chipmill.
  • Conservationists confirmed the downturn in truck activity on 6 March 2009 when truck movements into the chipmill were monitored. This demonstrated a 40% drop from typical numbers in recent years. By September 2010, truck number were still 25% down on 2008 numbers.
  • Numbers on 6 March were just 98, compared to a typical daily tally in recent years of 160 - 165. On one day in September 2008, we counted 190 in a day. Figures also show that the pine market has collapsed. Last September, there were 29 trucks in a day, on 6 March there were just 11.
  • In April 2009, South East Fibre Exports  closed for 3 weeks.
  • The Eden chipmill was forced to cleared bush in order to expand its log stockpile as take or pay contracts with Forests NSW forced it to keep on buying logs it could not sell.

 

Eden Wood Supply Agreement

With wood chip royalty prices already about half in real terms what they were 20 years ago, we expect further major industry pressure to lower royalties still further as the Eden Wood Supply Agreement comes up for renewal lin 2010.

Pressure from industry (a monopoly buyer from a monopoly seller) for lower prices will come from consequences of the global economic downturn.

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Woodchip power
As the woodchip market collapse bit, the industry geared up to put pressure on governments to liberalise the conditions under which native forest wood can be burned to generate electricity.

Plantations and the recession

  • The plantation sector was the first to feel the pinch, especially from the start of the year (e.g., media reports of $16M cancelled woodchip orders from Portland in January), but the native forest sector is now feeling it as well.
  • January media reports Gunns intention to delay their blue gum plantation harvest in SW Victoria.
  • February 2009 media reports said Gunns would temporarily close 2 of their Tasmanian chipmills.
  • March reports had 3 Gunns chipmills in Tasmania closing for periods of 2 to 3 weeks, with all 3 mills going on to a 4 day week once they resumed operations. That is probably about now. Havenít heard whether this is still Gunnsí intention.
  • Tasmanian media reports said that contractors there experienced a 40% reduction in activity.

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