Business support

The Victorian Forestry Plan is supporting timber businesses to transition out of native timber, explore opportunities and diversify into different ways of working.

Transition has started and already there is a good take up of support and evidence of innovative thinking within Victoria’s native timber industry.

Further support will come online and be available throughout the transition process.

Download the flowchart to find out if you are eligible for support and what funding you could receive:

Opt-out Scheme

An Expression of Interest for the Opt-out Scheme opened on 30 September 2022 and closed on 19 October 2022.

Businesses who are successful in the Expression of Interest process will be invited to submit an application from 26 October 2022.

The scheme aims to support sawmills that choose to stop purchasing timber from Victorian State Forests ahead of the first step down in timber harvest volumes in 2024 and stagger the transition for businesses, communities and workers.

Under the scheme sawmills will be able to apply for an opt-out payment to:

  • stop purchasing logs sourced from Victorian State Forests on or before 30 June 2023
  • surrender their Timber Sale Agreement(s) with VicForests and any Forest Produce Licences they may hold
  • not enter into a contract, licence or agreement for the supply of timber from Victorian State Forests after 30 June 2023.

There are two stages to the scheme:

  1. An Expression of Interest stage from 30 September 2022 to identify sawmills interested in the Scheme, their future support needs and assess eligibility
  2. An application stage which will open on 26 October 2022.

More detail on the Expression of Interest and application processes and how to apply are on the Opt-out Scheme page.

Businesses can apply for the Opt-Out Scheme and the VicForests' Timber Sales Process 2024.

Businesses who take an Opt-out Scheme offer will become ineligible to continue to participate in VicForests' Timber Sales Process 2024.

Transition assistance

Forestry Business Transition Voucher program

The second round of the Forestry Business Transition Voucher program is open.

The program offers access to tailored support through business service providers to equip affected forestry businesses with a better understanding of their business capabilities, options and strategies for transition.

The first round of the project was fully subscribed with 41 approved applications.

Victorian Timber Innovation Fund

Support is available through the Victorian Timber Innovation Grants Program to assist affected forestry businesses to transition from native timber to plantation fibre and transformative industry investment.

Round 2 of the program is currently open.

Australian Sustainable Hardwoods – Heyfield

Engineered Flooring Manufacturing Line and Retail Supply Chain – $1,619,000

MASSLAM Finishing and Storage and Reconditioner Project – $1,201,500

Radial Timber – Yarram

Small Log Line – $325,000

Hardwood Reconnaissance Project – $17,000

Plantation Processing Trials – $50,000

Longwarry Sawmill

Recycled Timber Project – $202,142

Ryan & McNulty – Benalla

Plantation-based manufacturing project - $100,000

Brunts Harvesting – Orbost

Forestry Innovation Transition Feasibility Study – $40,000

Talbot Timbers

Plantation Timber research and Feasibility Study – $82,758

Eddy Enterprises – Mansfield

Heavy Equipment Clean Up Feasibility Study Project – $89,875

Samaria Contracting

Excavation and Plantation Timber Processing Feasibility Study – $68,765

CDH Contracting – Alexandra

Alternative Timbers Business Transition Project – $71,238

Clark Generation – Healesville

Forestry Residue Utilisation Project Business Plan – $97,810

Talbot Timbers in Western Victoria have successfully used Victorian Forestry Plan funding to have their transition options assessed and then trial new opportunities.

Talbot Timbers began in 1986, cutting timber for posts and firewood. As their business grew they started producing specialty timbers used by architects and homeowners.

In 2020 Talbot Timbers took advantage of the Forestry Business Transition Voucher program.

Following a successful application, the voucher gave them the opportunity to review their operations and to look at future options following the phase out of native timber harvesting in Victoria.

Working with forestry consultants Wood4Good, they came up with a business transition plan with strong options.

Talbot Timbers then went on to successfully secure an $82,000 Victorian Timber Innovation Fund grant.

Using the grant, the business has identified potential new timber sources from local plantations and are currently trialling the processing of small diameter timber to produce new products with the aim of accessing niche but high-value markets.

Talbot Timber’s Owner Alistair Hull is optimistic about the trials.

“We’re excited about trying new ways of working with smaller diameter logs,” he said

“It will help us make sure we have the local supply we need to keep operating at this site. Our family has been working in the timber industry in Australia for over 200 years and we are keen to see it continue.”

Rail freight has returned to Bairnsdale in Gippsland for the first time in 13 years.

This exciting milestone was celebrated in May, when a test train arrived at the Fenning Intermodal Freight Terminal (FIFT).

Diversifying a local legend

The terminal uses a rail line that has not transported freight to or from Bairnsdale since 2009 and is an important part of Fenning Timber's business diversification plan.

Stage 1 of the project will help the 75-year-old local business to transform the site next to their Bairnsdale mill into a light industrial rail precinct including transportation and warehousing
by 2025.

Rail siding to allow trains to pass one another, refuelling infrastructure, and parking and access points will all be upgraded as part of the works.

"We've been looking at this [freight terminal] over the last 20-odd years, so we're not new to it," said Leonard Fenning, Managing Director of Fenning Timbers.

“This will be the freight hub for East Gippsland."

"From a rail centre like this, we can expand out into the other districts, with produce coming in and out,” he added.

Strengthening supply chains and helping the environment

Jim Kato, Head of Supply Chain at Patties Foods, is excited for the benefits FIFT will offer the company’s Bairnsdale bakery.

"It's a fantastic step forward in supporting the growth of many Australian manufacturers in the region," he said.

"There is currently a heavy reliance on road transport for freight movement in and out of Melbourne from Bairnsdale and East Gippsland. Even a minor road disruption can cause delays.”

"FIFT will provide a safe, eco-friendly and reliable rail network that will include direct access to the Port of Melbourne," added Jim.

Once operational, FIFT will run three freight trains per week. These will transport over 10,000 containers of local produce like Patties Pies to the Port of Melbourne in West Melbourne every year.

This will remove more than 6,000 truck trips from regional roads per year, creating a greener supply chain for East Gippsland businesses.

These benefits would increase with a planned Stage 2 of the project, which would build additional warehouses and storage facilities.

Growing the regional economy

Aside from helping existing businesses, Jim Kato is hopeful that FIFT will encourage further growth in the region.

"I hope that many other Australian and international companies will see this, and see Bairnsdale and East Gippsland as the perfect place to expand their businesses," he said.

For Leonard Fenning, the project is another opportunity for his company to give back to the community.

"We thought we owed it to the district."

Stage 1 of the Fenning Intermodal Freight Terminal is supported by $700,000 from the Victorian Forestry Plan and is delivered in partnership with Fenning Timbers.

Sawmills and Harvest and Haulage support summary

Up to $25,000 per business to engage appropriate professional services to develop a business response plan.

Round 1 closed March 2022.

Round 2 curently available.

Up to $250,000 per business for items that have not been fully depreciated and are unable to be sold. An independent valuation will be undertaken.

Available from 2023.

Grants for innovation that supports transition from native timber to plantation fibre and transformative industry investments.

Round 1 closed March 2022.

Round 2 curently available.

Sawmills only support

Up to $150,000 for the safe retirement and repurposing of mill sites.

Available from 2023.

Gippsland National Institute of Forest Products and Innovation (NIFPI)

The Gippsland National Institute of Forest Products and Innovation (NIFPI) was established in 2020 as a hub of expertise and collaboration across the forest industry.

Since July 2021, over $8.4 million has been granted for eleven research projects.

Under the first round of research project grants, six projects received grants totalling $3.96 million. The research is investigating the impacts of fire on the performance of timber projects, the smarter use of spatial information for forest management, improving commercialisation of manufactured timber products, feral animal management, and improvements to plantation productivity.

Five projects with a total value of $4.46 million were successful in the second round of research and development project grants, announced on 25 February 2022. The research grants are investigating opportunities such as remote-controlled pruning for improved fire management, productivity enhancing tree breeding, nursery management and soil research, and the commercial opportunities available for smaller diameter plantation logs in Gippsland.

The NIFPI receives administrative support from Forest and Wood Products Australia. It promotes cutting-edge research to secure investment and boost the sector and future jobs in Gippsland.

Page last updated: 24 January 2023