Heyfield mill: State Government buys Gippsland mill, costing more than $50 million

THE state government has bought Heyfield timber mill, keeping the doors of the Gippsland plant open. But the price is believed to be higher than previously capped by the Premier.

Ross Britton, Graeme Ralph and Darren Bellion of the Heyfield timber mill. Picture: Chloe Smith.

• Heyfield timber mill to close, hundreds of jobs threatened
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• Timber company rejects government’s $20 million offer
• Opinion: Heyfield one milestone Premier didn’t count

THE State Government has bought Heyfield timber mill, keeping the doors of the Gippsland plant open.

It is believed the total deal will cost more than $50 million, despite previous promises from Premier Daniel Andrews that the government would not shell out more than that.

The sale will keep the mill, owned by Hermal Group, open but the Herald Sun understands an estimated 100 jobs could still be lost long term.

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Heyfield timber mill workers had protested outside a cabinet meeting in a rally to save the mill. Picture: Chloe Smith.

About 240 jobs would have been lost, and about 7000 jobs impacted statewide, had the mill closed.

The government has spent months negotiating about a possible takeover.

The company rejected a $20 million cash offer, with a $21 million debt takeover agreement, in June.

An independent value assessment, commissioned by Australian Sustainable Hardwoods, found the Heyfield mill would be worth between $38 million to $42 million.

The mill’s owners announced it would close in September 2018, after the state-owned VicForests unexpectedly move to cut its timber orders.

Aaron McDonough, Craig Stevenson and Peter Ferguson of the Heyfield timber mill. Picture: Tony Gough

A series of redundancies and job losses have taken place since.

Workers launched a campaign to save the mill and rallied outside government meetings in March, as officials considered what support they could offer.

Managers claimed the uncertainty of the company’s future had put workers under “mental strain”.

Timber stacker Brendan Mason, 30, said at the time that the mill’s closure would devastate his family.

“We will have to move away from our family if it closes down, to get a job,’’ Mr Mason said.

“We have a nine-month-old baby now.”

@moniquehore