May 17, 2005. /Lesprom Network/. In response to the softening Australian building and construction market, Carter Holt Harvey Pinepanels today launched a consultation process with its Tumut employees following a decision to mothball the site's T1 particleboard press. Originally planning to produce 40,000 cubic metres of particleboard this year, representing approximately 4% of Australasian industry capacity, the T1 press has effectively been idle since February 2005. Carter Holt Harvey will keep the press in a state of readiness, enabling it to quickly return to service with minimum expenditure. The company plans to protect its market position and meet customer demand from its nine remaining particleboard presses in Tumut, Mount Gambier, Gympie, Oberon and Kopu. Regrettably this decision may also result in up to 40 less positions at the Tumut site by the end of June. Facility Manager Adrian Paalvast said the company was serious about the long-term future of the Tumut site and this sometimes requires making difficult decisions. "After poor financial performance during 2004, Carter Holt Harvey's wood products businesses are facing a challenging year with increased competition from imports, a rising Australian dollar and a softening domestic market," he said. "Our decision today is about demonstrating the flexibility required in today's market, while still allowing the site to return to full production when demand increases. Mothballing the T1 line removes our highest-cost particleboard press and maximises economies of scale across our lower cost lines." "We deeply regret the impact this has on our people and their families. We will immediately begin consultation with our employees and the union to implement this decision. Those affected by this decision will naturally receive their full entitlements and the company will offer every support determined appropriate during the consultation process." "Where possible we will assist those seeking voluntary redundancies, but we must also retain the valuable skills needed to restart the T1 press when the market allows." Mr Paalvast acknowledged that capital investment or other market changes may still affect future staffing levels at the facility. "It's too early to predict how the changing market could affect our site in the future, but we will continue to keep our people informed." "We're conscious of how important this facility is to the Tumut community. By continuing our focus on productivity we're giving it the best possible chance to maintain its competitiveness in the longer term." The Tumut particleboard facility operates two particleboard presses and three value-adding low pressure melamine presses. The site currently employs more than 160 people and produces approximately 140,000 cubic metres of high-quality particleboard for the Australian market. The Pinepanels business operates ten particleboard presses across its five Australian and one New Zealand operating facilities. Particleboard is a versatile wood panel, perfect for interior use in commercial and household furniture including cupboards, wardrobes and storage applications.