In a sudden and devastating blow to the local community, more than 70 workers have been laid off just weeks before Christmas due to the abrupt closure of the Associated Kiln Driers (AKD) sawmill in Yarram, Gippsland. The announcement was made on Tuesday, leaving many employees, including 29-year-old Chevy Hilder, facing an uncertain future.
“That’s a lot of people that will have to find a new job, or move out of the area,” Hilder expressed, highlighting the scarcity of employment opportunities in the region. “It’s going to affect a whole lot more than they realise.”
As the largest softwood producer in Australia, AKD employs around 1,000 people across the nation. The company attributed the closure to challenges in the construction sector and rising operational costs. AKD operates four other sites in Colac, Caboolture, Tumut, and Oberon, focusing on lower-grade fibre products for landscaping, pallets, and packaging.
Economic Pressures and Company Strategy
AKD’s chief executive, Shane Vicary, described the decision as difficult but necessary for the company’s sustainability. “To remain a sustainable and competitive Australian business, we are adapting to market conditions, simplifying our operations, and strengthening the core business at our four major sawmilling sites,” Vicary stated. “Having operated in regional communities for 70 years, the significance of our departure from Yarram is not lost on us.”
Vicary assured that AKD is committed to working with local stakeholders to mitigate the closure’s impact. The company’s strategic shift aims to focus resources on its main sites, which continue to produce a full range of structural softwood products.
Union Concerns and Broader Industry Impact
Michael O’Connor, national secretary of the Timber, Furnishing & Textiles Union, pointed to broader industry pressures as contributing factors to the mill’s closure. “You have a situation where you have a housing shortage, record-low houses being built — it seems illogical, but that’s what we’re dealing with,” O’Connor remarked. He also criticized the Reserve Bank’s interest rate policies over the past year, suggesting they exacerbated the situation.
“And of course, the Reserve Bank failing to cut interest rates appropriately in the last 12 months, this is what you see.” — Michael O’Connor
The union is collaborating with AKD to support retrenched workers, exploring opportunities for placement in other mills. However, O’Connor expressed concerns about the future of Yarram, a small township heavily reliant on the sawmill’s operations.
Local Business Reaction and Future Prospects
The closure has sent shockwaves through the local business community. Luke Olarenshaw, owner of the Alberton Timber and Treatment Plant, located just five minutes south of Yarram, was taken aback by the news. “I’m just devastated for all the employees at AKD and devastated for the town [Yarram],” Olarenshaw said. “I was hoping AKD would expand in the future, not shut down.”
Olarenshaw’s business, which manufactures posts and poles for the agricultural sector, now faces the challenge of sourcing timber from alternative suppliers. “We used to source our sawn timber from the Yarram mill, now we will have to source elsewhere,” he noted.
Looking Ahead: Community and Economic Implications
The closure of the Yarram sawmill underscores the fragile nature of regional economies heavily dependent on a single industry. As the community grapples with the immediate effects, there are calls for increased support from both government and industry stakeholders to provide retraining and employment opportunities for displaced workers.
Meanwhile, the broader timber and construction industries continue to navigate complex challenges, including fluctuating demand, supply chain disruptions, and economic pressures. The situation in Yarram serves as a poignant reminder of the need for strategic planning and resilience in the face of evolving market conditions.
As the holiday season approaches, the affected workers and their families face an uncertain future, with many hoping for swift intervention and support to help them transition to new opportunities.
