FT is never going to make a profit. It sells its products too cheaply and is locked into too many loss making contracts. It even makes losses from supplying high quality sawlogs.
With brutally honest statements like that finance commentator John Lawrence carves up the latest Annual Report from Forestry Tasmania (FT), Australia’s largest grower and supplier of blackwood timber.
On top of that sawmillers are now threatening to close if they have to take on more of FTs costs or pay higher log prices.
You can get your own copy of the Annual Report here:
Forestry Tasmania is an absolute mess but after decades of poor policy and politics it is certainly no surprise.
Here’s another gem:
The past year is best described as a continuation of the de facto wind-up of FT commenced under the watchful eye of Treasury boss Tony Ferrall once he was appointed [to the FT Board] in May 2015. A complying Board is now in place, stacked with directors whose post nominals as long as your arm indicate academic forestry knowledge. Their insolvency experience however looks a little thin. That is the prime challenge facing the company. FT is not turning the corner. That’s yet to be found. There is no plan to build the forest industry. It’s an insolvency operation. Presumably Mr Ferrall is acting on instructions from Mr Gutwein, which makes the government a two faced outfit.
If you have any interest or “skin” in the blackwood industry as a sawmiller, logger, manufacturer, retailer or consumer you need to read Mr Lawrence’s analysis.
Is the blackwood industry going to go down with the sinking ship called FT, or will it turn to Tasmanian farmers to grow blackwood?
When will Tasmania get a fully commercial profitable forest industry?