Prime Minister visits Eden chip mill|Photos, video

The Prime Minister Scott Morrison talks with the chairman of Allied Natural Wood Exports Mal McComb during a visit to the Eden chip mill on Tuesday, June 23.

The Prime Minister Scott Morrison talks with the chairman of Allied Natural Wood Exports Mal McComb during a visit to the Eden chip mill on Tuesday, June 23.

A $50m bushfire recovery fund for the forestry industry has been welcomed by Allied Natural Wood Exports chairman Mal McComb who said the Eden chip mill faced some big infrastructure costs following the bushfires.

The fund which is split between about $40m for infrastructure and $10m for storage of recovered logs from bushfire areas, was part of a $86m fund which also applies to bushfire affected apple and wine industries, the Prime Minister Scott Morrison announced.

Speaking at the Eden chip mill, Mr Morrison said some 600 jobs in Eden depended on the mill.

"If we'd lost the mill, we would have lost the community," Mr Morrison said.

"You've got to plan and put the investment in for the future to make sure those jobs are not just here in the next 12 months, but here in the next five years and 10 years and chatting to those who are working here today, they've been here, some of them, for up to 50 years, some from as little a few months here on contract. And it's so important that we put those investments into these businesses, to these industries that are so critical in these regional parts of the country, " Mr Morrison said.

Mill owners will be able to "apply for a grant of between $1-5m to invest in the infrastructure that they will need to rebuild or to enhance the productivity and the sustainability of this mill," Agriculture, Drought and Emergency Management Minister David Littleproud said.

Prime Minister at Eden chip mill

The $10m fund will create storage capacity for timber that has been damaged in the fires, but can still be used.

Minister Littleproud said it was about getting the resource "that's sitting out on the ground out there that's burnt and being able to do something with it rather than let it sit on the ground and waste away".

Both infrastructure replacement and storage are issues that the Australian Forests Products Association has flagged in a brochure produced for the Eden-Monaro by-election.

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The association said that Eden-Monaro forests products industries provide around $2bn of economic activity annually and employ more than 5000 people - 2168 directly and 2981 indirectly (for example through logging contractors).

"Up to 40 per cent of softwood plantations in the South West slopes and Bombala regions of NSW were fire affected creating immediate and long-term challenges for the softwood industry," the association said.

Members have called for financial support for transporting logs to mills, something which was provided through the federal government's $15m Forestry Transport Assistance program and grants for retooling and upgrading processing facilities, which was announced by the Prime Minister on Tuesday, June 23 at the Eden chip mill. They have also called for the establishment of a NSW South Coast Regional Forest Industries Hub, something Minister Littleproud said was currently being considered.

"We're working with the forestry industry to make sure that they (hubs) are located in areas that will make sure that we have a sustainable industry in the future. There's money set aside, the job is getting done," the Minister said.

"We are going to be a billion trees short by 2030. We've just seen the decimation of a large stockpile of that and we need to make sure that we invest," Minister Littleproud said.

The Eden chip mill is facing all of these challenges including the replacement of infrastructure. Four years ago the chip mill wharf was seriously damaged during an east coast low and now with significant fire damage, the cost is greater than than the insurance cap, Mr McComb explained.

Part of the electric wiring burnt at the mill but the company has to replace the entire system to bring it in line with latest standards. He also wants to ensure that if they lose electricity supply again they have a suitable generator at the site so that water can be pumped, something they were not able to do in January.

Although parts and new equipment had to be brought in Mr McComb said the work is going to local companies, Acora and Michelin.

There is also the conveyor belt which although now running, had all of its paint burnt off in the bushfires, exposing the structure to rust and in need of replacement in three to four years, Mr McComb said.

"We're going to be back to 100 per cent capacity by the end of this week, we just won't be doing it as efficiently," Mr McComb said.

The mill is in a race against time to process the fire affected pine logs before they become unusable.

"We've only got about 12-18 months; we've swamped the local mills with as much as they can take. We're going to be harvesting burnt trees at 10 times the speed of the usual cycle," he said.

About 50 per cent of the company's own plantations have been affected. They are also using the 40,000 tonnes of logs which were on site but didn't burn.

However when this work is finished supply challenges remain for the long-term future of the industry.

Mr McComb says the industry doesn't know what will happen in Victoria after Victorian Premier Daniel Andrews announcement in November 2019, of a transition plan away from native forests.

He said the industry couldn't see where Victoria was going, it was "unclear" and in the long-term Victoria "was needed".