Targeting a niche market in smaller-diameter logs helps fourth-generation Mt. Gambier, Australia, sawmill and wood products operation grow by 100% in three years; state government grants AU$4.2M to help with upgrades to mill developing exports to Asia

ADELAIDE, Australia , November 11, 2013 () – TARGETING a niche market in smaller diameter logs has seen a fourth generation Mt Gambier sawmilling operation grow by 100 per cent in the past three years.

NF McDonnell and Sons turned its attention to the less popular logs and began specialising in making packaging, fencing and landscaping products when the industry began suffering from the global financial crisis.

Managing director Ian McDonnell said growth since then had pushed the company to a point where it had reached production capacity and it had now embarked on an ambitious two-stage upgrade to its facilities.

Its mill development plan was created in 2012 and the first phase, a $2 million redesign of its re-sawing section, was now in operation. Mr McDonnell said it had significantly increased efficiencies and capacity. Stage two of the upgrade was also under way, with a new $9 million state-of-the-art sawmill the Hew Saw R250 from Finland, identified for installation.

NF McDonnell and Sons won a $4.2 million state government grant to help with the stage-two investment in the company that employs 85 people.

“This sawline will become the leading small log line in the region focusing on the production of both packaging, fencing and landscape products,” the company said.

Mr McDonnell said small diameter logs were not so sought after in the industry and finding this specialised area had led to promising new business partnerships and export markets opening up.

Exports to South-East Asia started 12 months ago and the company had also sent its first consignment to China at the end of September.

He believed breaking into the Chinese market was a significant win for the company and “going forward, this export market will represent a good proportion of our product”.

Mr McDonnell was feeling positive about the southeast forestry industry’s future and this was backed by the State Government announcing new investment last year and recently releasing Stage 2 of the Cellulose Fibre Chain Study.

This 12 month study involved the VTT Technical Research Centre in Finland working with local firms – including NF McDonnell and Sons, to identify market opportunities for higher value-added forestry products.

When it was released, Manufacturing, Innovation and Trade Minister Tom Kenyon said the Government would fund a study tour to Scandinavia in late November for members of the south-east forestry industry.

This had since been postponed with a Department for Manufacturing, Innovation, Trade, Resources and Energy spokesman saying it was now likely to happen in the first or second quarter next year.Mr McDonnell said the study was positive in terms of bringing industry members together and the key now was cementing that collaboration.

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