Industry News

New Adelaide Hills sawmill to improve supply, transportation routes

A new $4.5 million sawmill in the Adelaide Hills will be built thanks to a new long-term log supply agreement with ForestrySA to help industries still reeling from timber supply shortages.

KSI Sawmills, which currently operates a small mill at Nuriootpa, will build the new mill which will be strategically located allowing for expansion, offering improved transportation routes central to both local timber plantations and downstream markets.

The news comes after an emergency summit at South Australian Parliament were informed that Australia’s timber shortage was having a domino effect on builders and trades dependent on the construction industry.

Sharp increases in global demand during the COVID-19 crisis including the success of the Federal Government’s HomeBuilder scheme has caused rises in the cost of building materials, including timber.

Minister for Primary Industries and Regional Development David Basham said the new $4.5 million mill will help KSI Sawmills more than double their current production to approximately 60,000m3 annually and create nearly 30 jobs.

“The new local log processing program will inject over $12 million in direct value into South Australia’s economy each year,’ Minister Basham said.

“I congratulate KSI Sawmills for making this significant investment in South Australia’s timber industry which will increase supply and create local jobs. This investment has been made possible thanks to a new 10-year log supply agreement between Forestry SA and KSI Sawmills.

“KSI will predominantly consume lower grade log from ForestrySA’s plantations in the Adelaide Hills. The majority of timber products will be consumed by the local packaging industry.

“Some higher-grade products will meet structural grade and be consumed by the local building and construction industry, while residue materials will support Adelaide Hills based agriculture.

“This will lead to improved product utilisation and better environmental outcomes with less waste, and better estate management for ForestrySA.”

Minister Basham said a recent tender process for log supply from ForestrySA has resulted in new long-term supply agreements, helping to secure the future of the domestic processing industry including KSI Sawmills.

“New arrangements will allow for all log of sawmill quality to be provided to the processing industry for increased value-adding, predominantly in South Australia,” Minister Basham said.

“ForestrySA’s direct contribution to the economy in regional South Australia has increased by more than 50 per cent as a result.”

KSI Sawmills Director Victor Kyriakou said the new mill is an exciting development for South Australia.

“KSI has been working constructively with ForestrySA for more than 12 years now. We are so lucky to have a forest estate owned by the South Australian Government,” said Kyriakou.

“We are really looking forward to the next stage of expanding our business and encouraging local manufacturing in South Australia.”

Meanwhile the South Australian Government had already written to its federal counterparts about accessing a freight subsidy scheme to assist with getting timber off Kangaroo Island where fresh pine has been harvested since the start of the year.

Timber shortages in Victoria are already hampering the state’s flood recovery in the Gippsland region and other storm-ravaged areas still awaiting materials like chipboard to board up windows.

The Insurance Council of Australia reports approximately 16,000 claims have been lodged following the Victorian storms, with losses estimated at $144 million.

Basic building needs like gyprock are proving difficult to source particularly away from major city ports where ongoing supply chain disruptions with insurance companies battling to secure items necessary for repairs.

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