Deputy Premier John Barilaro and Clarence MP Chris Gulaptis with at the Trenayr nursery.
Deputy Premier John Barilaro and Clarence MP Chris Gulaptis with at the Trenayr nursery.

Million dollar seedlings come with warning

DEPUTY Premier John Barilaro warned of a looming "cliff-edge" for forestry while on a trip to the Clarence Valley yesterday.

Mr Barilaro was announcing a $1 million investment in the Trenayr Forestry Corporation nursery when he issued the blunt warning.

He wanted to send a message that the state was behind the industry both today and in the future, despite acknowledging the industry would "feel some pain" in the short term.

"We can't pretend that the world is the same today post fires," he said.

"We know there is going to be a cliff edge at some point, our supply agreements from Forest Corp with all those mills, we won't be able to supply what we have always supplied.

"But that's the reality."

The announcement was part of a $46 million investment in Forestry Corp and follows the $140 million Bushfire Industry Recovery Package aimed at getting Bushfire-impacted dairy farmers, fruit growers and forestry businesses back on their feet after a tough few months.

The government intends to support supply chains in the short term and encourages investment and stimulus in the longer term through Sector Development Grants.

The package is structured primarily as a 50/50 investment matching program where applicants must co-contribute half the total cost.

Asked if he was confident the sector would take up the grants, Mr Barilaro responded by saying it represented an opportunity for ageing mills to become more viable.

"When we designed the packages for the industry we did it in consultation with the sector, so I am very confident," he said.

"A lot of our mills have been dated for a particular saw log size, this is an opportunity to look at other ways of having a strong and viable industry going forward."

While she welcomed the support, manager of South Grafton sawmill J Notaras and Sons, Donna Layton, said the mill could not take advantage of the SDGs unless given certainty over wood supply.

There were less than three years left on its Wood Supply Agreement with Forestry Corporation and Ms Layton said while extensions had been promised "for a number of years", they continued to be delayed.

"Our WSA ends in 2023, which does not give us enough time to gain any benefits of new projects and not enough time to pay off loans," she said. "In around 2014 Boral's WSA was extended to 2028, the rest of the industry is still waiting."

With more certainty, Ms Layton said there were projects they might consider undertaking.

"There are projects that we have been looking at, such as further value adding our residues of sawdust and woodchips," she said.

"As well as extensions to our processing lines such as laminating and finger jointing to maximise shorter length material."

"We need resource security to give us the confidence to invest in the future and continue to employ people in regional NSW."

Mr Barilaro assured the industry that the WSAs would be going beyond 2023 and said an announcement would be made "very soon".

"We were working on it (WSAs) around Christmas and then the fires came. We have to do an audit and stocktake of what our supply agreements look like going forward," he said.

"We are now finalising that and then we will be able to make an announcement.