Pallet mill to close due to timber shortage

PENTARCH Forestry’s pallet mill in Dandenong will cease operating next month due to a shortage of hardwood timber, but the company mill in Swifts Creek will remain open.

The Dandenong mill, which had been operating since 1989 and was acquired by Pentarch in 2021, produced 700,000 hardwood pallets each year and employed 49 staff at its peak output.

However, a lack of supply of hardwood caused by the closure of the native timber sector in Victoria means operations at the Dandenong South site will end.

“This outcome is the result of the Victorian Government decision to end timber harvesting,” Pentarch Forestry Chief Executive, Paul Heubner said.

“When the mill was acquired, we were confident that the Victorian Government had a workable plan for timber supply until 2030 followed by a transition into plantation, but they have failed to deliver on either promise.

“The sudden decision to shut down the native timber sector has resulted in significant job losses for Pentarch and other hardwood suppliers, and now 700,000 pallets out of the supply chain each year.

“It is another blow to our sovereign capability to supply domestic wood products and reduce our dependence on imports, which impacts the global timber economy.”

The Dandenong pallet mill is one of several Pentarch Forestry operations that supply much needed and renewable hardwood timber products to the Australian and global markets.

Mr Heubner told the Gippsland Farmer that, while the company had closed Dandenong, there was no firm decision to shut the Swifts Creek operation.

“We are able to sell the product from this mill to industry either for pallet construction or pallet repair timber. We are trying to keep Swifts Creek operating from NSW timber and from third party supply,” he said.

Hardwood pallets are an important part in the retail supply chain with their ability to safely handle heavy loads.

The shortfall from the Dandenong Mill will now be replaced with pallets made with imported timber from jurisdictions that are unlikely to have the same sort of control and forest management practice as Australia. Mr Heubner said:

The Australian native timber sector harvests and regrows by law six trees in 10,000;

In Victoria, before the closure of the sector, the figure was four trees in 10,000, and;

The sector supported and estimated direct 5760 jobs in regional Victoria and contributed $1.6 billion in sales and $582m in added value.

Gippsland Farmer

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