CSR Limited announced today that it had successfully concluded negotiations with Boral on a binding heads of agreement to establish a 50-50 joint venture involving the two companies’ plantation softwood mills at Oberon in New South Wales.
CSR Limited Managing Director Peter Kirby said that as part of the joint venture agreement, Boral would contribute around $30 million to upgrade and improve the Oberon assets over the next two years. The CSR sawmill at Oberon, built in 1996, has a current log capacity of around 320,000 m3. This is expected to increase to 550,000 m3 following the additional investment.
The joint venture is subject to regulatory approval from the ACCC.
Mr Kirby said CSR and Boral will each nominate two directors to the joint venture’s Board.
"We are pleased to have reached a satisfactory outcome which will enable these assets to be enhanced and the operational scale to be increased - so as to ensure that the Oberon facilities can compete more effectively on the global market," he said. "Solid timber is increasingly an internationally-traded commodity, and small scale operations can no longer compete on costs with the large, international mills which are sending their products right around the world."
CSR’s 125 employees at the Oberon sawmill will transfer to the new joint venture.