Temporary shutdowns at Gunns’ Tasmanian woodchip mills will continue this month – although for longer than Gunns originally announced – due to a softening in global demand.

The Mercury reported that woodchip stockpiles had been building at the Burnie, Bell Bay and Triabunna ports.

The newspaper also said operations would be scaled down further at the Hampshire, Bell Bay, Triabunna and Tamar Valley woodchip mills.

Forest Contractors Association chairman Rodney Bishop said, “All contractors in [Tasmania] are back to about 80 per cent of their base quotas on woodchips and it is going to be hard.”

A Gunns spokesman confirmed “changing stock levels” would see “some minor shutdowns” at the mills, but said it was “not unusual”.

Forestry Tasmania’s Michael Wood said Gunns’ decision to halt production was a sign the global meltdown was beginning to hurt the local industry.

Wood also commented on the company’s decision to close operations for a week at a time on a rolling basis, saying “it’s a fairly unusual event.”

“It happens from time to time when the markets are very low and we try and adapt to deal with those circumstances,” he added.

Timber industry analyst Robert Eastment told ABC News last month that the expected fall in Japanese demand for woodchips meant Gunns would have to review job numbers, while a Gunns spokesman said the company would not comment on possible cuts.

Gunns’ acquisition of softwood company Auspine last year had boosted its latest profit result, ABC News reported.

Shadforths financial analyst Matthew Torenius said that while the company had posted a net profit after tax of $33.6 million for the half year to December 31, a jump of 95%, the figures started to look “a little bit weaker” once the Auspine purchase had been taken out.     

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