In Australia the state of Victoria’s low grade native timber could soon be packed into shipping containers bound for China and other cut-price countries for processing under a plan to help ailing state timber company VicForests.

VicForests has been left without a market for hundreds of thousands of tonnes of so-called “residual” timber following the loss of a key contract with Japanese-owned wood-chip company South East Fibre Exports (SEFE). In response, a rule requiring local processing before export has now been relaxed in a bid to open up new markets for the struggling state-owned wood business.

A confidential November 2013 Department of Treasury and Finance (DTF) briefing seen by The Age confirms the industry has for months been lobbying to relax the requirement for domestic processing of timber.

“VicForests indicates the Victorian Association of Forest Industries (VAFI) now supports relaxing certain aspects of the export restrictions,” the briefing to former treasurer Michael O’Brien, said. “Such a change should lead to improved outcomes for both VicForests and industry. DTF supports the reconsideration of the timber export policy.”

It follows the expiry of a clause that has for the past decade effectively allowed VicForests to legally operate against Commonwealth competition laws by favouring domestic over international wood processing.

Source: The Age Victoria