In a statement to the ASX, the company announced that it would pull out of a number of “non-core” operating areas and divert funds into the beleaguered mill project, which has suffered from bad press and a lack of financial support for years.

It will sell off its ‘Green Triangle’ softwood plantation in South East Australia, sell off saw milling activities and divest the largest part of its hardwood plantations.

Managing director Greg L’Estrange said: “Although our preference is to build and operate the Bell Bay pulp mill with an industry joint venture partner, which is being actively pursued, we have formed the view that we need to put in place a financial strategy that will enable us to proceed alone if that is necessary.”

The company is suffering from weak export demand due to the Japanese earthquake, as well as the strength of the Australian dollar.

Gunns first started investigated the potential for a pulp mill in Tasmania back in June 2004. It received government approval in March this year.

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