The Tasmanian Government has committed a total of $15 million the On-Island Processing Program (the Program) to grow the Tasmanian forestry sector’s on‑island processing capabilities. The first round of the Program was launched in 2021, which funded seven projects.
The 2025 Round 2 of the Program commits $8 million of grant funding to four projects across the state to unlock more than $50 million in private investment in modern processing and production facilities.
These projects will grow Tasmania’s on-island processing capabilities, increase the value of Tasmanian wood, expand the state’s sovereign capabilities, reduce the need for imported forest-based products, and create employment opportunities.
A particular focus of Round 2 is increasing the value of Tasmania’s new plantation hardwood resource as it enters the supply chain in increasing volumes.
Recipient
Project
Funding Amount
Britton Brothers
Retooling and processing expansion to transition from the existing native hardwood resource to plantation timbers including investment in new drying and steaming technology, a new processing line for sawn timber and a laminating press for increased recovery.
$2 million
Forico
Construction of a new and modern sawmill for processing hardwood plantation logs, primarily for pallet grade sawn timber. This is a value-add project for a resource that is currently exported from Tasmania as either woodchips or whole round logs.
$2 million
Neville Smith Forest Products
The addition of specialised small log processing equipment to facilitate the processing of smaller diameter plantation logs which will create significant opportunities for southern Tasmanian plantation growers, converting pulpwood to a higher value fully manufactured pallet.
$2 million
Western Junction Sawmill
Installation of an automated continuous laminating line to produce solid timber panels, staircase components and mid-sized sections of glue laminated hardwood utilising plantation Eucalyptus nitens (shining gum).
Round 1 of the On-Island Processing Program was designed to obtain greater value from Tasmania’s forest resources, including forest residues, reduce the risk from exposure to volatility in international commodity markets for woodchips and logs, reduce the need for imported forest-based products, and create jobs - particularly in regional areas.
These projects aimed to add value to the timber harvest, better utilise wood waste, help insulate the industry from international commodity markets, reduce the need for imported wood products and support the construction industry locally.
The table below shows the approved round 1 projects:
Applicant
Project
Timberlink Australia
Create a finger-jointing and priming line to convert low-grade and short length plantation pine into high value boards, fascia and posts to be sold across Tasmania and Australia.
CMTP
Upgrade of CMTP Branxholm Sawmill facility to a world class standard, significantly increasing processing volumes of sawn log at increased lengths and with an improvement in timber recovery. The additional sawn timber volumes will replace imported timber.
McKay Timber
Upgrade truss plant facilities for the manufacture of wall and roof trusses and install an upgraded finger jointing and laminating plant.
Britton Timbers
A specialised timber recovery line that will join short lengths of timber into useable high value long sections.
Barbers Sawmill
Upgrade the existing kiln drying facility and install timber moulding capability to produce sawn timber and by-products from lower grade logs.
Koppers Wood Products
Upgrade the Longford pine processing facility to reduce waste and significantly increase the efficiency and output of treated pine post-production processing. This will provide for greater volumes of lower value pine to be processed into higher value products.
Bakes Sawmill
Produce treated timber for a range of products, adding value to what is currently chipped residue wood.
Frequently Asked Questions
We have not provided a standard template for a Business Case for the OIPP2 as the information can vary depending on the nature and complexity of each project. The information you provide must be sufficient to meet the requirements of the guidelines, including supporting your claims of project viability.
The Program Guidelines state “Information provided to State Growth may be subject to disclosure in accordance with the Right to Information Act 2009 (the Act)”. Each right to information request (and any related relevant information which is located in our records) is assessed by an independent delegate, who determines whether information is to be released or whether it can be exempt. If information about a business is located, in response to a request under the Right to Information Act 2009, the Act contains a requirement to consult with third party businesses if information about their business affairs is considered for release. This means under the Act a business which has applied for the OIPP2 would have an opportunity to comment on the release or withholding of their business information. While the final decision is yours as to the information you provide, applicants should closely read the program information and guidelines to ensure all requirements are fully met for their project and the grant application.
The Act can be found at the link below for reference.
The Program Guidelines specify the full assessment process:
Broadly, applications that meet the eligibility criteria will initially be assessed by a departmental assessment team, including a financial assessment, then forwarded to an assessment panel for final evaluation. The panel will consist of representatives from:
Building Tasmania
University of Tasmania
An Independent expert with industry and subject matter expertise
The assessment panel will establish a merit list based on the assessment criteria. The panel will recommend funding for projects from this merit list.
It may be possible for a biomass to energy project to be considered under the program if it meets all requirements of the guidelines.
Applicants should closely read the program information and guidelines to determine if their particular project and feedstock would meet all program requirements.
It is intended that the applicant contribution be a financial contribution, not in-kind.
However, if a proportion of an employee’s salary and statutory payments is paid direct from the “project” it could meet the requirement. The Department and assessment panel would need to see the direct connection between the “employee earnings” and the project.
To show this connection for such costs to be considered, the applicant must clearly demonstrate in the application that the proposed expenditure is additional project expenditure that would not have been incurred without the project – for example a new employee to be engaged the manage the project.
Applications will close on Thursday, 31 July 2025 at 10.00am.
Any applications received after this time will not be accepted.
The Department does not have a preferred format, applicants can provide whichever option they consider most suitable – for example m3.
Where necessary the assessment panel will determine an appropriate conversion factor.
STT is not involved in the administration of this grant. Information is sought in the application to address the assessment criteria.