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Briefcase: Business snippets from around SA

Business

In this week’s briefcase, timber suppliers circle a $2 million fund to address building industry shortages, the SA spirits industry begins work on a blueprint worth bottling and local e-invoicing company Link4 lands a big fish.

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Timber fund aims to address building shortages

The State Government has announced a $2 million fund to increase the supply of structural timber for local South Australian home builders.

Strong demand for timber as a result of the new housing boom is forcing a supply shortage that is causing delays of more than six months in some cases.

An Expression of Interest (EOI) process was opened on Friday and applicants have until July 15 to submit their case.

Depending upon the proposals received, there is up to $2 million available to increase the supply of house building timbers.

Minister for Primary Industries and Regional Development David Basham said the EOI process was a step towards addressing the unprecedented demand for building timbers currently being experienced by South Australian builders.

“This EOI process is looking for innovative options and projects that will result in the manufacture of additional building timbers in the short term to support the construction of homes in South Australia,” he said.

“Project proposals we are seeking include the upgrade or purchase of sawmilling equipment or workforce expansion or upskilling that can lead to the efficient delivery of additional building timber.

“Proposals must be able to commence delivering additional timber to the local market inside six months, with preference given to proposals able to start delivering within three months.”

A plan to use bushfire-affected timber from Kangaroo Island to fill building industry shortages has been backed by the Master Builders SA.

But the deal to send enough KI timber to Morgan’s Sawmill in the Mid North to build 10,000 homes is reliant on government support to help meet high transport costs and to upgrade sawmill equipment to produce structural timber suitable for the local building industry.

Master Builders SA Chief Executive Officer Will Frogley welcomed the government announcement.

“For many builders, especially the smaller ones who do not have the ongoing supply lines, it is almost impossible to get timber with reports of orders pushing out to March 2022,” he said.

“We hope that the EOI will be a significant step towards moving the timber from Kangaroo Island to mainland South Australia and helping our local building industry.

Distillers in high spirits over industry blueprint

South Australian distillers are being urged to provide information that will be used to help create a blueprint designed to position the state as the spirits capital of Australia.

The South Australian Spirit Producers Association is calling on all businesses connected to the sector to fill out a survey that will be used to guide the industry blueprint.

The SA Spirit Industry Blueprint will be used to support the state’s burgeoning spirits sector to grow in an authentic, sustainable way and identify new opportunities.

In the past five years, the number of distilleries in SA has grown to 40, contributing to local employment in the sector.

SA Spirit Producers Association president George Georgiadis urged distillers, and other businesses connected to the industry, to have their say on the vision for the sector’s growth.

“The industry has been on a path of rapid growth in recent years, and this Blueprint will ensure we continue to grow in a sustainable way,” the Never Never Distilling co-founder said.

“But we can’t do it alone. We need as many people as possible in the sector to fill out the survey to help us identify not only the opportunities but also any hurdles that need to be overcome.”

Georgiadis, who won the KWP! Creative Thinker Award at InDaily’s 40 Under 40 this year, said the SA spirits sector was where the state’s wine industry was 30 years ago – on the cusp of being the nation’s best and world-renowned – and this Blueprint was key to its future.

Key areas to be discussed in the Blueprint – being funded by a $50,000 State Government grant and $20,000 in industry funding – will include value-adding, barriers to growth, tax reform, marketing and education.

KI takeover bid falls short

A Sydney-based investment management company has failed in its bid to buy up all the shares in Kangaroo Island Plantation Timber but has increased its ownership of the company to more than 28 per cent.

Samuel Terry Asset Management announced on May 3 its plan to buy up all existing KIPT shares for $1.05 apiece, which was the closing price of the shares on April 30.

STAM is already a substantial shareholder with 14.8 million shares, which equates to about 26.3 per cent of KIPT’s holdings.

The month-long offer period ended on June 18 with KIPT announcing the result to the ASX last week.

At the end of the Offer Period for the On-Market Takeover Bid, STAM had acceptances for about 1.1 million shares, equivalent to 1.95 per cent of the shareholding.

This took STAM’s total holding to 28.18 per cent.

KIPT Chairman Paul McKenzie thanked shareholders for listening to the company’s advice to ignore the offer, which it had previously described as conservative.

“Shareholders have accepted the view of the company board that the offer undervalued KPT and have endorsed the strategy outlined in the target statement, which identifies the value drivers for the business, focussing on monetising the fire-affected assets to release the full value of the land,” he said in the ASX statement last week.

About 95 per cent of KIPT’s plantations were impacted by the devastating fires that tore through the island in December 2019 and January 2020. The company has received more than $60 million in insurance compensation payouts since the fires and is in a race against time to salvage damaged timber and transport it to export markets before it rots.

First Drop announces ownership consolidation

First Drop Wines’ John Retsas has announced his sole ownership of the Barossa-based business after buying out co-founder Matt Gant.

Retsas and Gant established the business in 2004 with the intent to put their stamp on the iconic Barossa, Adelaide Hills, and McLaren Vale regions of South Australia.

The buyout, which came into effect on June 18, comes more than a decade after Gant moved his young family to Western Australia’s Margaret River region, which became a major factor in his decision to release his part-ownership.

Retsas will now head up the winemaking, production and sales functions, and has awarded several employees’ greater responsibility in their respective teams.

He said he is adamant that it is business as usual despite the ownership change, with no change to the style or quality of the First Drop Wines portfolio.

“Over the past 16 years, we have worked hard to build one of the most exciting and respected wineries in Australia,” Retsas said.

“It’s been a fun journey and we’ve made a lot of amazing memories together. Matt’s been a big part of our success and we wish him all the best for the future.”

First Drop’s ‘The Home of the Brave’ cellar door is at the Provenance Barossa Precinct on the site of the former Penfolds winery on the southern edge of Nuriootpa.

e-invoicing deal is a gas for Link4

Adelaide-based e-invoicing provider Link4 has recruited the first large enterprise, BOC Gas, to its network.

The multi-year deal with Link4 allows BOC to send and receive invoices in line with Peppol standards.

Link4 is a certified Access Point that provides e-invoicing services throughout Australia, New Zealand, Singapore and the United Kingdom.

Its government clients include Treasury, DISER, AOFM and APRA. It also provides services to thousands of Australian businesses that use Xero, MYOB or QuickBooks as their accounting system.

The 2021 Federal Budget set aside $15.3 million for promoting e-invoicing through Australia’s business community to help get more of corporate Australia onto the e-invoicing network.

Link4 CTO Sam Hassan said BOC sent more than two million invoices a year and has reported a 50 per cent improvement in on-time payments with e-invoicing as well as improved customer satisfaction rating.

“Thousands of small businesses in Australia already deliver their invoice data without the need for email or PDFs, but large organisations have been slow to adopt this new service,” he said.

“We are very happy to see the business community stepping up and look forward to more organisations following BOC’s lead.”

Great construction debate looms

The Civil Contractors Federation South Australia will pit Infrastructure Minister Corey Wingard against his opposition counterpart Tom Koutsantonis in a post-budget deep dive into their key projects and policies in the lead-up to next year’s State Election.

The Great Infrastructure Debate at Adelaide Oval on Thursday is expected to produce a robust conversation, adjudicated by Mike Smithson.

Projects likely to be part of the debate include the proposed Adelaide Riverbank Arena, new Women’s and Children’s Hospital and the North-South Corridor.

Civil Contractors Federation SA CEO Rebecca Pickering said the commitments in last week’s State Budget would be the catalyst for vigorous analysis of each parties’ future plans for critical infrastructure that underpins the entire economy and quality of life for the whole community.

“Investing in civil infrastructure generates jobs, boosts business confidence and underpins economic growth so we are keen to hear from the Ministers about their plans and importantly their timetables for activating funding commitments,” she said.

MND tax appeal enters final days

The Motor Neurone Disease Association of SA (MNDSA) is calling on individuals and businesses to take advantage of the opportunity to make a tax-deductible donation before the end of the 2020/21 financial year this week.

The association will apply the funding to support victims of the insidious disease, the majority of who are over the age of 65 and cannot access NDIS funding.

MND South Australia relies on fundraising activities and donations from the public to underwrite their services to the 150 South Australian’s living with MND.

A $60 donation could purchase a bed stick; a $100 donation could purchase a ramp; a $400 donation could purchase a bedside commode, or your donation may be bundled with others to purchase an $18,000 electronic power wheelchair and other more expensive but necessary equipment.

Visit mndsa.org.au/tax for more information.

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