Senior editor Jim Bowden recalls a visit to Ta Ann plywood operations in Tasmania in this November 2011 flashback story.
An unyielding principle sustains the growth of the rotary veneer peeling enterprise of the Ta Ann Group in Tasmania – a high-tech operation using innovative concepts to transform low-grade eucalypts into high-value products.
“The real story is the company’s origins and its belief that there is no alternative to sustainable development,” says Ta Ann director and respected forester David Ridley.
The Malaysian-based company opened its first purpose-built mill in the Huon district in 2007, and the second at Smithton in the state’s north-west, a combined $79 million investment utilising Japanese, German and Malaysian technologies and supporting more than 160 jobs.
So how has Ta Ann developed using a low-quality, but sustainable resource?
“First we established the markets, then the expertise in manufacturing,” Mr Ridley said.
“And there were many reasons to invest in Tasmania – a 20-year wood supply agreement, an approved site ready for investment and the customer’s preferences for forest certification in place.
“This was all mixed with a desire for the sustainable development of a sustainable resource.”
Ta Ann operates on an agreed 20-year wood supply from Forestry Tasmania – 115,000 cub m at Smithton and 150,000 cub m at the Huon mill with recoveries of about 50% of the sales volume.
The mills have an international competitive advantage producing strong and durable rotary eucalypt veneers from logs once only suitable for wood chipping and which meet international requirements for forest management sustainability and chain of custody certification.
Export market are focused on Malaysia, Japan and China with the range of ply products increasing to include shipping container flooring, laminated veneer lumber and new decorative floor products.
Shipments are made to Malaysia every three to four months.
David Ridley says Ta Ann’s processing technology and market strategy draws on the inherent properties of eucalypts and a sales partnership developed over more than 20 years.
“This strategy also included partial manufacture in Tasmania and completion of the product closer to export markets.
“Our first step has been to produce veneer and manufacture plywood in Malaysia, but ultimately we will manufacture plywood at our Tasmanian mills.”
With an investment of $790 million, Mr Ridley says Ta Ann’s resource security is still the key to the future.
“If the resource is there then we can do more. We have room at the Smithton mill for another peeling line.”
Mr Ridley said the current forest conflict in Tasmania was a test of sovereign risk for the company.
“We were invited to establish our operations by the Tasmanian and federal governments so this is the basis on which we must go forward,” he said.
“We’re here to add value, which is an obligation to government requirements, so we would expect them to address the sovereign risk issues.
“We are looking at further value-added growth plans and jobs creation as we face challenges out of the global financial crisis and the high Australian dollar.
“I would expect that this would be part of the swings and roundabouts in any decisions made in the current process,” he said.
Editor’s note: The two-year negotiations between forest harvesters and environmentalists, which many hoped would end the conflict over Tasmania’s forests, collapsed on October 27, 2012.
The Wilderness Society, a key negotiator in the peace talks, blamed the collapse on the Forest Industries Association of Tasmania (FIAT), which represented veneer manufacturers such as Ta Ann and, previously, Gunns Ltd.
After a long and venomous attack on the forest industry by environmentalists, including the Bob Brown Foundation, two mills employing more than 100 workers closed after the historic forest peace deal was voted down by the state’s upper house.
An independent review found that more than 500,000 ha of forest that had been earmarked for harvesting had “important, unique qualities that mean it should be added to world heritage reserves”.
Ta Ann said its timber quota would fall by almost 40% under plans to protect half a million hectares of forest from harvesting.
But executive director Evan Rolley said the company was supporting the peace plan because it would bring with it critical environmental backing for the company.
“They’ve given us assurances that they’ll stand shoulder to shoulder with us and help us with our products and our markets,” he said.
Ta Ann had planned to overhaul its operations and source more timber from private forests.
“We’ll have to diversify our supply away from the state forests supplied by Forestry Tasmania and we’ll need to talk to private forest owners,” Mr Rolley said.
“We think our firm offers an opportunity to private forest growers to process more of their wood here in Tasmania through our veneer mills.”
Mr Rolley at the time warned that Ta Ann would pull out if the Upper House scuttled the forest peace deal – which it did.
Ta Ann said without the peace deal’s promise of top-flight environmental certification for its products, it would lose its markets.
Ta Ann was founded by a group of entrepreneurial Sarawakians in the 1980s that grew the company from a small timber-trading firm to a public-listed corporation with global footprints. The company’s interests now encompass timber, oil palm and other agricultural products.
A cornerstone of the company is a continued commitment towards sustainable development. This has led to one of the first forest plantations in Sarawak and to date Ta Ann has achieved sustainable certification in all of its operational forest and oil palm units.
