A $3.5 million federal government grant for Timberlink's Bell Bay sawmill has allowed the company to install waste-reducing vision scanning technology quicker, the company says.
Timberlink has invested $27 million into new technology at Bell Bay in the past seven years, and the government funding - combined with funds from Timberlink - would see the addition of green mill scanning.
The scanner identifies the highest quality timber during cutting, reducing waste while at the same time improving the quality of timber.
Timberlink chief executive officer Ian Tyson said the upgrades at Bell Bay would continue into the future.
"Through the government grant, we have another $3.5 million, and adding our own funds, we're doing a whole lot more work in our green mill," he said.
"And once we're finished that, we'll be looking at some other new investments as well.
"The federal government funding allows us to do more, and it enables us to do it more quickly, so we can utilise what the resource is, we can turn it into much-needed timber, and we can do things that we couldn't do without that support."
The upgrade also enables the site to keep pace with technological upgrades across the industry, including overseas, with Australia importing about 20 per cent of its timber - a situation Mr Tyson described as a "travesty".
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Liberal Bass BHR Bridget Archer and Agriculture Minister Bridget McKenzie toured the site on Wednesday and received an update on the upgrades, which received bipartisan funding support during the election campaign.
Ms Archer said the coalition wanted to see Australia's - and Tasmania's - forestry industry grow.
"That investment from the government unlocks a substantial amount of further private investment, which is obviously what the government wants to see," she said.
"It secures the jobs that currently exist here at Bell Bay, and provides some opportunity for future growth here both at Timberlink at Bell Bay, and the forest industry in Tasmania generally."