the loading dock in progress

Gunns builds loading plant
NICK CLARK-The Mercury

April 19, 2010 09:01am

DEVELOPMENT by Gunns Ltd of a $20 million woodchip loading facility in Victoria is proceeding rapidly.

That is despite the downturn in the forestry industry.

Port of Portland acting chief executive officer Jim Cooper said the development had begun several weeks ago.

"Gunns have a significant number of tradesmen on site and we are hoping that it will be finished by the end of the year," Mr Cooper said.

He said work included road building, earthworks, water and electrical supply and sewerage, with a concrete slab expected to be laid in July.

Conveyors and fabricated infrastructure were being manufactured in Portland.

Gunns chief executive officer Greg L'Estrange said the company was targeting a start to exports in the last quarter of 2010.

The speed of work at Portland contrasts with the situation at Bell Bay, where native forest harvesting restarts tomorrow after a 3-week shutdown.

Mr L'Estrange said plantation forestry would become the primary focus of the company in the medium term.

The facility was announced in July last year but since then the forestry industry has hit a number of hurdles and Gunns announced a dramatically reduced half-year profit.

Gunns' expenditure on the facility comes despite analysts warning the company is in danger of breaching debt covenants in the first half of 2010 -- in particular the ratio between total debt and earnings.

The region known as the Green Triangle, an area stretching up to 150km from Portland, has some 170,000ha of plantation forests.

Exports from the facility would be expected to be 3 million tonnes a year, Mr Cooper said.

Mr L'Estrange said Gunns expected to export about 1.5 million tonnes of hardwood woodchips a year from Portland.

The facility would also be used to export softwood woodchips from estates Gunns acquired in the Green Triangle through its Auspine purchase