THE COLLAPSE of Forest Enterprise Australia could not have happened at a better time said the man behind a bid to build a $12.7 million rail terminal in Casino.
FEA had been a major backer of the project and while John McMahon yesterday described the timber giant’s collapse as a ‘shame’, he said the rail hub could have been financially hit itself had it occurred 18 months later.
“We had a meeting with our financiers yesterday (Thursday) and while it will be a bump in the road to completing the project in a couple of years time, it shouldn’t affect our financing,” the Casino rail terminal consortium leader Mr McMahon said.
Receivers took over FEA on Thursday after the company went into voluntary administration when its two banks called in outstanding loans.
It’s wholly owned subsidiary FEA Plantations, escaped the receivers grasp but remains in administration.
FEA Plantations has about 29,000 hectares under young trees across the Northern Rivers and as far north at Tweed Heads.
“It really is a shame,” Mr McMahon said. “FEA have brought a lot of money into the area for farmers who have sold or leased part of their land.”
However, he said, had the forestry company gone under just before or after the terminal was completed in a couple of year’s time, the expected revenue from FEA would have put a severe dent in its bottom line.
Mr McMahon is hopeful another forestry company will buy the plantations in the near future and use the rail terminal.
Still, if that didn’t eventuate he said the terminal’s business plan aimed to serve the whole Casino industrial precinct and Northern Rivers region rather than a specific commodity or plant.
Not so lucky is Peter van Lieshout, husband of Tweed Shire Councillor and the Liberal candidate for Richmond Joan van Lieshout.
Mr van Lieshout leased 300 hectares of his land at Kunghur to FEA six years ago.
The land is home to about 240,000 hardwood eucalypts, worth about $10.5 million, which still have another 14 years left to grow until they are ready for harvest.
“To undertake maintenance of the area is a very expensive exercise,” he said.
“I can’t really expect to see any money in the bank for 10 to 12 years; I would have preferred this didn’t happen.
“I am not overjoyed about it.”
Currently, Mr van Lieshout is paid a monthly fee for the use of his land, but if that fee stops coming he will take responsibility for the trees and the investors will lose their money – about half of which they would have recouped through tax breaks already.
The industry is suffering under low woodchip prices and Mr van Lieshout has doubts about whether another plantation company will take over the land.
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