LONG, long ago, in a land far away called South Australia, there lived a King. His name was Adrian de Bruin, but his loyal subjects simply called him King Adrian of Auspine.
King Adrian’s realm was extensive, and included a small principality called Tongenah in north-eastern Tasmania, where around 150 hard working men and women milled radiata pine logs to help make King Adrian even wealthier. King Adrian didn’t like to travel too far from the comfort of his castle, so Prince Andrew Jakab was charged with protecting the King’s interests in far-off Tasmania.
Prince Andrew was a sharp and astute businessman, and he was well aware that not far from Tongenah, Baron Kevin French was also milling radiata pine at a much more modern sawmill than King Adrian’s.
Prince Andrew also knew that the woodcutters, labouring under the cruel Count Rayonier, had been told that from the year 2007, less timber would be available for the two Tasmanian sawmills. In fact, Prince Andrew was well aware that no matter how hard the woodcutters were driven by evil Count Rayonier, there wouldn’t be enough pine logs. In short, either Baron Kevin’s, or King Adrian’s mills would be forced to close.
In a case of fortuitous timing though, Baron Kevin decided that he was at a stage in life where hunting elk were more interesting pastimes than chopping up radiata pine logs. Baron Kevin called for expressions of interest in his estate, which independent analysts figured was worth around $18 million.
Prince Andrew’s eyes widened at the news. Buying the Baron’s estate would not only give him a modern sawmill, it would also guarantee that King Adrian would be the only buyer for Count Rayonier’s timber in future years.
Paralysed by excitement, and possibly becoming King Adrian’s favoured Prince, Andrew offered to buy Baron Kevin’s sawmill for $35 million. Baron Kevin couldn’t believe his luck, grabbing the cheque with both hands and cashing it at the Royal Bank of Scottsdale that very afternoon. When last seen, the now very wealthy Baron Kevin was enjoying the sunshine at his new principality of Noosa.
Prince Andrew had but one more challenge before he would surely receive his just rewards from the King. Convincing Count Rayonier to sell him all the available timber for the next 20 years.
Driven by commercial imperatives, the Count didn’t prove an easy catch. The Count’s masters, GMO Renewable Resources and Forestry Tasmania had been selling pine to King Adrian and Baron Kevin at low prices for years, and were determined that the time had come to start making a profit on their investment.
So Prince Andrew, showing a creative streak still not apparent to many, decided to call in reinforcements. He told the Town Criers that Count Rayonier was being unreasonable in negotiations, and if he couldn’t buy timber cheaply enough, King Adrian would have to sack some of the 313 workers now employed in Tasmania by the Auspine Empire.
He also talked to his mates in the Liberal Party, who had proved to be useful in similar battles in King Adrian’s homeland.
Former foot soldier, The Emperor Lennon.
“Don’t worry,’’ the Liberal court jester said. “There’s a State election coming up, and we shall surely throw Emperor Lennon from his throne, and install Lord Hidding instead.”
“Then you shall have your resource deal,” the court jester promised.
Taking the Liberals at their word, Prince Andrew told Count Rayonier that he was asking too much for his timber. When the Count proved resistant, the Prince offered a lower price for the logs, believing that he was the only possible buyer.
Not long before the State election, Prince Andrew made another offer, not only lower than the preceding bid, but offering even less than he was paying for timber currently. Suspecting that the conniving Liberal court jester was playing a part in the negotiations, Count Rayonier called a halt to further discussions until after the election.
History now shows that Emperor Lennon was gloriously returned to power, the would-be Lord Hidding was consigned to the dustbin of political history, and Prince Andrew was starting to realise that within nine months, King Adrian’s loyal workers would be standing idle, possibly discussing why Prince Andrew couldn’t buy some timber to keep them working.
The Prince wasn’t too concerned; after all, the Count had to sell his wood to someone, to keep his woodcutters working. So Prince Andrew continued his aggressive stance, knowing deep down that the pine was his.
Until Knight Andrew White from Forest Enterprises rode in on his white stallion, throwing Prince Andrew’s plans into disarray.
Knight White had been buying pine logs from the Count for years, and unlike Prince Andrew, had been able to agree on reasonable commercial terms after brief negotiations.
“Give me all your timber,” the Knight said to the Count.
“I’ll pay a good price, and I’ll build a nice, modern sawmill to process it.”
The Count was a fair man; cruel, but fair, so he went back to Prince Andrew and said:
“Prince Andrew, Knight White would like to buy my logs, but in the interests of commercial equity, I’ll give you another chance. How much will you pay?”
After checking with the King, Prince Andrew wrote his final offer on a scroll, and delivered it to the Count. Following a cursory glance at the Prince’s offer, Count Rayonier quickly concluded that his masters would be far better served selling their pine to Knight White, who was happy to pay much more than Prince Andrew.
Days later, Count Rayonier called the Town Criers and told them the news. The woodcutters would keep their jobs, but from April 1, the logs would be delivered to Knight White, not Prince Andrew.
Prince Andrew was devastated. His gamble hadn’t paid off, and he now had to go back to the King and tell him the Tasmanian estate was worthless. The chances of a Lordship were looking increasingly slim.
King Adrian was blunt.
“Summon the buglers, and gather the army,” he said.
“Tell them to advance on the Emperor, and insist he intervene in the foolish decision to give my pine logs to Knight Andrew.”
Like any faithful servant, Prince Andrew did his King’s bidding, and launched his entire army of 313 against the might of Emperor Lennon’s vast bureaucracy.
The Prince used his finest weapons. Fear, paranoia, and a fanatical devotion to duty.
Realising that his army were unlikely to find another squire when the evil Count took their logs away, Prince Andrew told his charges to use any means to pressure the Emperor.
The Emperor stood fast against the accusations of the Prince’s army. Being a former foot soldier himself, he understood the machinations of using a workforce as a tool to forge a better commercial outcome for the rightful holders of power and wealth.
Trying to appease the workers, Emperor Lennon even approached other fiefdoms within his domain, trying to find other sources of logs for Prince Andrew’s mills.
But Prince Andrew had returned to the Kingdom of South Australia, to plot the next move with King Adrian …
TO BE CONTINUED.
Jarvis Cocker is an independent media and communications consultant specialising in the Australian financial sector. He has previously worked as a senior manager with one of the country’s largest stockbroking firms and as a policy advisor to a Federal Government department. Now living in Tasmania, he tries to temper his sometimes rabid capitalist views with infrequent visits to the Tasmanian wilderness.
Earlier, Simon Bevilacqua, The Unwitting Pawns of Scottsdale:
FEA is involved in a joint venture with ITC known as Smartfibre Pty Ltd, which has a modern export woodchip facility at Bell Bay near Launceston. It annually exports about 300,000 tonnes of woodchips, including more than 200,000 tonnes of eucalypt hardwood chips, to Japan and China. Most of ITC’s plantations are certified by the international Forest Stewardship Council, which boasts more than 5000 participating companies worldwide. The certification is demanded in many export markets concerned about native old-growth logging and unsustainable practices. The certification has taken off in Australia, with the number of companies involved expanding from 10 to 30 last year. Victoria’s big players — ITC, Australian Paper, Hancock Victorian Plantations and Timbercorp — have certification. Gunns and Forestry Tasmania, however, do not. They recently gained different certification, the Australian Forestry Standard, which allows old-growth clearfell logging.
What Gunns has told the ASX: Here