Pulp Mill dead in the water as John Gay severs all ties with Gunns

The Wilderness Society Inc
Media Release
27 May 2010

The controversial Bell Bay pulp mill is "dead in the water" following the sudden announcement by Gunns Ltd this evening that chairman John Gay will sever all ties with the company and its subsidiaries, The Wilderness Society's executive director Alec Marr said.

Mr Marr said Mr Gay severing all ties with Gunns also represented a historic turning point for forestry in Tasmania and other parts of Australia Gunns operated.

"Mr Gay's failure to create a subsidiary under which the pulp mill would be developed indicates that Gunns are aware the writing is on the wall and the pulp mill is dead in the water."

Mr Gay and Gunns had wanted to create a subsidiary, Southern Star, with its principal assets being the proposed Bell Bay pulp mill project, land and plantation assets, then sell up to 49 per cent equity in the company to a foreign partner, with Mr Gay as chairman.

Mr Marr said the announcement indicated that the company's shareholders understood a new direction for the ailing company is necessary if it is to
survive.

"Mr Gay severing all ties with Gunns reflects the reality that only a change in direction away from the company's old business practices and native forest destruction."

The current business model is failing to deliver a profitable company and only a major change in direction will protect jobs.

"The community does not support economic growth at the expense of the environment and, clearly, neither do investors."

Paul Oosting, corporate campaigner for The Wilderness Society, said the organisation has been working co-operatively with shareholders and is
committed to working constructively with a new Board of Gunns.

A new Board of Gunns presents an historic opportunity to end the conflict over forestry in Tasmania,² Mr Oosting said.

Such a move would create a win-win outcome for jobs, Tasmania's economy, the community and our valuable, carbon-rich native forests.