❓ Question regarding the economic viability of timber sales under contract 2672 with Sotico, specifically what happens if the sawmiller can't find a profitable market for value-added timber. The Minister assures that the contract protects sawmillers from operating at a loss due to market changes.
AnsweredQoN 1793Legislative Council
QuestionView source ↗
I refer to Schedule 5 of the timber production contract 2672 between the Forest Products Commission and Sotico, and ask -
Can the Minister explain what happens in the event that the sawmiller is unable to find an economically viable market for the amount of timber required to be valued added under the various categories such as sawn timber for outdoor furniture?
Can the Minister explain what happens in the event that the sawmiller is unable to find an economically viable market for the amount of timber required to be valued added under the various categories such as sawn timber for outdoor furniture?
AnswerView source ↗
Answered
5 May 2004
Responded by
Minister for Agriculture, Forestry and Fisheries
Response time
55 days
The wording of the contract reflects the fact that the Government cannot and does not expect sawmillers to operate at a loss. For this reason clause 22.2(a) of the contract includes as a Force Majeure event “a material adverse change in the market for Value Added Timber Products which change has the effect of preventing the Buyer from making a reasonable commercial profit by the performance of its obligations under this agreement”. Clause 22.3 requires that particulars and supporting evidence of such an event be provided. In other words a sawmill that indicated that it could not find an economically viable market for its products in Western Australia would be required to fully justify its position. The Government has developed close links with the sawmilling and furniture industries and I am confident of its ability to quickly ascertain the veracity of such a claim.
Clause 22.3 requires that particulars and supporting evidence of such an event be provided. In other words a sawmill that indicated that it could not find an economically viable market for its products in Western Australia would be required to fully justify its position. The Government has developed close links with the sawmilling and furniture industries and I am confident of its ability to quickly ascertain the veracity of such a claim.
Clause 22.3 requires that particulars and supporting evidence of such an event be provided. In other words a sawmill that indicated that it could not find an economically viable market for its products in Western Australia would be required to fully justify its position. The Government has developed close links with the sawmilling and furniture industries and I am confident of its ability to quickly ascertain the veracity of such a claim.
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