Tasmanian timber company Gunns this week shut its last two major woodchip mills in a move described yesterday as the inevitable decline of the industry.
Gunns notified the Australian Securities Exchange yesterday that it would suspend woodchip operations at its Triabunna mill for eight weeks from the middle of this month.
A Gunns spokesman said that between 40 and 50 workers would be affected by the temporary shutdown.
The news came the day after the company shut its woodchip mill at Long Reach permanently, with the loss of about 50 jobs.
The Tamar Valley mill has been gradually scaled back since its closure was announced last year.
This came after Gunns shut its Hampshire woodchip facility.
Gunns managing director Greg L'Estrange told the ASX that the Triabunna closure had been in response to the volatile nature of Japanese markets since the earthquake in that country.
Australian Forest Contractors Association Tasmanian spokesman Ken Padgett said that those left in the industry in Tasmania would feel both moves keenly.
He said that many of the 74 contractors remaining after government exit packages had planned to relocate south to work at the Triabunna mill.
"Members are gutted," Mr Padgett said.
"I don't know how much more they can stand."
Mr Padgett said that the closures were due mainly to a Tasmanian industry made uncompetitive by the value of the Australian dollar.
"I don't see how anyone can sustain an industry in these circumstances - I think we are seeing its inevitable decline," he said.
He was concerned that the Triabunna mill would not reopen.
Opposition forests spokesman Peter Gutwein said that the closure of the Long Reach mill this week and Hampshire late last year came with the loss of more than 570 jobs.
"And that comes on top of a loss of 120 jobs from the Scottsdale sawmill this week," Mr Gutwein said.
Forestry Tasmania would review the Gunns decision to suspend operations at Triabunna, FT managing director Bob Gordon said.
"It will cause considerable hardship in the forest sector," he said.
"We will continue to harvest high- quality sawlog and solid wood for the rotary-peeled veneer market, but the challenge is to find an alternative market for the residues."