XxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxLectureXxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx19th September, 2012. SynopsisThe pulp and paper industry in Australia is a significant contributor to the Australian economy and consists of more than 400 enterprises hence employing a significant number of people in the rural and also the regional areas where paper and pulp industries are located. The industry in terms of contributing to the Australian economy earns the country approximately $ 12.6 billion in the domestic demand sector, contributes around more than $ 1 billion through the exports and also contributes in terms of imports of approximately $ 3.5 billion.
However, all is not well in the Australian paper and pulp industry as a result of such factors as the decrease in exports, the move towards a paperless world, the challenges with investments in the paper and pulp industry in Australia among others and hence the need to take a keen interest at the Australian paper and pulp industry through analysis of Gunn’s Limited, which is among the enterprises making the Australian paper and pulp industry. With this regards, the case study concentrates more on the Australian paper and pulp industry while utilizing Gunns Limited as a going concern.
Background Information about Gunns LimitedGunns Limited is a listed company and a major enterprise operating in Tasmania Australia. The company employs approximately 1200 people and is considered as the major land owner in Tasmania (Forestry Tasmania 2008). The business of Gunns is to make use of the natural resources, and is therefore involved in the business of growing and harvesting of forest plantations but on a sustainable basis. Among the ways through which the company ensures that there is sustainability is through its commitment towards the community by continuously striving to hit the balance between providing the community in regards to its economic viability and also socially contributing to environmental sustainability and responsibility through the company’s dedication of planting trees.
The company therefore deals with both soft and hard woods products. Its core business involves managing plantations, conducting forestry activities, developing of wood products, milling, processing and also the merchandising of wood products in addition to exporting them. The company also processes, manufactures and also sells timber and timber products and veneer with the help of its company subsidiaries.
Other activities that the company engages in together with its subsidiaries includes; management of vineyard and production of wine among others. With these activities, the company operates along the segments of timber, forest products and other activities (Gunns Limited Website 2012). Therefore, Gunns Limited Vision of; having growth for its employees, outcomes which are environmentally responsible and sustainable benefits or profitable outcomes in the communities that the company and its subsidiaries operates is clearly stated and implemented in the company’s activities. On this note too, the mission statement of the company is clearly stated and emphasizes the reason for existence of Gunns Limited and which is incongruence with most of the enterprises in the Australian paper and pulp industry (Gunns Limited Website 2012).
Challenges faced by Gunns LimitedIn light of the challenges faced by other enterprises in the Australian paper and pulp industry, one of the challenges that Gunns is facing is a dramatic decrease in revenues over the years. For instance, Gunns Limited posted a net loss after tax of about $903.9 million at the close of its financial books in June 2012.
The company had also posted a net loss of $355.5 million in year 2011, which is an indication of the representative picture of other enterprises in the paper and pulp industry in Australia. These losses which continue to be posted by Gunns Limited are as a result of the decreases in demand of the company’s and to the larger extent the industry products which can also be attributed to global financial crisis in 2008 and 2009 (Gunns Limited Website 2012).