A story filed by Jim Bowden in November 2011 after he visited Ta Ann’s operations in Tasmania.
An unyielding principle sustains the growth of the Ta Ann Group’s rotary veneer peeling enterprise in Tasmania – a high-tech operation that uses 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,” 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 cubic metres at Smithton and 150,000 cubic metres 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 that were previously only suitable for wood chipping, which meet international requirements for forest management sustainability and chain-of-custody certification.
The export market is 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 to Malaysia are made every 3 to 4 months.
David Ridley says Ta Ann’s processing technology and market strategy draw 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,” he said.
“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 available. 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 the company’s sovereign risk.
“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 job 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: Ta Ann was founded by a group of entrepreneurial Sarawakians in the 1980s who have grown the company from a small timber-trading firm to a public-listed corporation with global footprints. Interests now encompass timber, oil palm and other agricultural products.
A cornerstone of the company is a commitment towards sustainable development. This led to one of the first forest plantations in Sarawak, and to date, the company has achieved sustainable certification in all operational forest and oil palm units.
Ta Ann was established in Tasmania in 2005 to better use previously woodchipped eucalypt regrowth log billets by peeling them to produce a high-value veneer for domestic and international markets.
Originally, the company invested more than over $79 million to develop two veneer mills – a Huon mill built in 2007 and a Smithton mill in 2008. Subsequent changes to wood supply and market conditions led Ta Ann to change direction in 2015, commissioning a new plywood manufacturing plant at Smithton with an installed capacity of 24,000 cubic metres a year.
When at full production, the plywood plant would have injected $20 million into the local economy each year.
However, after multiple attacks by ENGOs, the Malaysia-based Ta Ann Group decided to quit Tasmania, closing two sustainable mills that employed more than 100 workers, following a historic forest peace deal that was voted down by the state’s upper house.
