who: Gunns
place: Bell Bay/Tamar Vallerypurpose: bleach Eucalypt woodchips and pulp them for sale to North Asia - Tasmania is closer to the North Asia market than rival pulp suppliers in South America.
envronmental issue: the release of effluent, especially dioxins, into Bass Strait. Gunns is planning to feed timber from the native forests of the north-east into the mill in the initial years of the operation (planned to be all plantation timber within five years. The Wilderness Society says it will initially be 80% native forest fed.)
alternative site: Hampshire
business issues: can Gunns raise the funds? Gunns interest payments in 07-08 were more than its earnings. Gunns has raised $500m in capital ($330m from equity raising and $170 from selling off pine plantations), concern with Gay being CEO and chairman, mill would tripled Gunns' earnings and turn it into a global player, Gunns market capitalization is $730m. Gunns needs to roll over $162m in debt in December 2009 against a debt facility of $178m
cost: $2.2 billion
status: 4 Jan 2009 Garrett said Gunns could build but could not operate till environmental model shows there is not problem with effluent outflows.
Institutional investors in Gunns who control just under 50%: Perpetual, Concord Capital, Perennial Investment Partners, Schroder Investment Management
Source: The Age and the Australian.
Note: How many old growth forests are Gunns responsible for having logged? If Gay hadn't built Gunns into the business it is today would those forests have been logged?
Note: Gunns have hired Sydney PR company Cato Counsel to turnaround years of publicity.
Note: Last pulp mill push 20 years ago was led by Robin Gray, ex-premier of Tas.
Note: Australia has a $2b deficit in wood products.
Further background:
Gunns owns all 4 export-woodchip mills in Tasmania.
It is the largest native-forest logging company in Australia as well as being the biggest hardwood-chip company in the world. (Where's the largest chip company?)
It exports more woodchips from Tasmanian than are exported from all the mainland states combined.
Gunns owns 2/3rds of the eucalypt sawmilling industry in Tasmania.
Gunns owns two major eucalypt veneer mills in Tasmanina.
Key woodchip customers: Oji, Nippon and Mitsubishi.
Source: Greenpeace
Further background:
Gunns owns all 4 export-woodchip mills in Tasmania.
It is the largest native-forest logging company in Australia as well as being the biggest hardwood-chip company in the world. (Where's the largest chip company?)
It exports more woodchips from Tasmanian than are exported from all the mainland states combined.
Gunns owns 2/3rds of the eucalypt sawmilling industry in Tasmania.
Gunns owns two major eucalypt veneer mills in Tasmanina.
Key woodchip customers: Oji, Nippon and Mitsubishi.
Source: Greenpeace
Other links:
2 comments:
Further note: Robin Gray, Past Premier, is on Gunns board of directors.
Extreme note: would Gunns' proposal have got this far, without the 'mates rates & deals' which rules in this government?
You would have to wonder. It's an interesting business story. I've added a little more info to the post.
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