The Challenge: Facing an Accelerated Industry Shutdown

nem received grant funding in 2021 from the Victorian Forestry Business Transition Fund to research potential diversification opportunities for a leading native timber harvesting operator, facing the impending closure of the industry.
Our client was the most productive native timber harvester in East Gippsland. The business had significant investment in specialised heavy duty equipment that was technically not deployable into harvesting plantation timber. Our stakeholder interviews confirmed this, alongside what critical success factors were required to build competitive advantage to enter the plantation sector which has expansion constraints.
What critical success factors were required to build competitive advantage to enter the plantation sector? In addition, several items of heavy equipment used by Brunt’s Harvesting (Brunt’s) were also deployed in major firefighting campaigns. These were community protection assets at risk.

Applying the nem cama™ Methodology

nem cama™ methodology was used as a predictive research tool to review future business options for Brunts. nem cama™ methodology utilises quantitative and qualitative insights to codify and more easily communicate future options. The process identifies the ones that are more attractive and what operational metrics need to be improved, or created, to build competitive advantage for long term strategic success.

The nem cama™ methodology enables a quantitative assessment of a range of qualitative factors that enable a business’s strategic options to be evaluated with more validated insights and data. A business’s preferred strategic option is to operate in one or more sectors that are in the top right hand quadrant of the cama™ matrix, shown below.

Sectors in the lower left quadrant are unviable, unless a quantum shift to their underlying scoring criteria can be actioned over time. The lower right quadrant represents an area of competitive advantage in a market of lower attractiveness. While a business may be able to control their competitive advantage, the ability to improve the attractiveness of some sectors is more complex and is usually outside of their control.

Seven Strategic Pathways Explored

The seven identified strategic market sector options evaluated (through stakeholder insights and industry interviews):

1. Continued Operations of native forest logging within East Gippsland.

Brunt’s had demonstrated cost effective ability to meet harvesting quotas over extended periods. Brunt’s preferred strategic outcome was to be the “last man standing” and maintain operations beyond the phasing down in 2024 and continue up to the final shutdown in 2030.

Brunt’s IP encompassed the cost effective and safe operation of timber harvesting and heavy freighting equipment alongside the hiring, retention and on-site field management of teams of skilled operators.

Brunt’s effectiveness at delivering on its log quotas was driven by Rob Brunt, as owner and a very engaged, hands-on field team manager. Rob and his team derived work satisfaction from “a fair day’s pay for a fair day’s work”. The team were compensated on a piece rate for every log harvested and delivered to VicForest customers.

While Brunt sought to be the last operator standing, the Victorian Government closed the industry down several years earlier than had been agreed with the industry, and not long after the completion of this assignment.

2. Continued Operations of native forest logging – remote (outside of Victoria)

Required costly relocation out of Victoria, potential loss of key staff, negotiation of new quotas in an unfamiliar market environment, ie NSW, with no existing customer relationships.
No superior performance history but assumed Brunt’s performance would be acknowledged and would continue to deliver.

3. Plantation logging within East Gippsland

Required an investment in extremely costly capital equipment to cost effectively harvest plantation timber.
There were no existing customer relationships or performance history to provide the required competitive advantage to win business from current competitive suppliers.
Investment in additional harvesting capacity required a detailed study of the dynamics of this industry including, but not limited to, the acreage under existing and planned cultivation, timber maturation, harvesting rates and the competitive intensity of the current harvesting operators servicing this market sector.

4. Plantation logging – remote (outside of Victoria)

We were unable to determine the size of the potential timber plantations to evaluate the growth potential and demand for additional harvesting capacity that would support a new market entrant.
Our field research indicated that the escalating timber supply shortfall was being met by timber imports. There was a significant supply / demand imbalance that is disrupting timber supply to the domestic home construction market.
Servicing this market sector had the added complication of convincing some (or any) current staff to relocate or work remotely from East Gippsland.
Securing opportunities and reputation within East Gippsland needed to occur before this remote opportunity could even be considered to be viable.

5. Quarrying in East Gippsland

The quarrying sector experienced significant growth driven by transport infrastructure spending across metro Melbourne and housing developments.
To address this new sector Brunt’s would have to make a large capital investment or acquire an operator currently active in this sector. Brunt’s has recently conducted a due diligence, as a part of this review, on a quarrying business in East Gippsland, McKinnon Earth Construction Pty Ltd.
This due diligence on McKinnon Earth Construction has revealed that the quality of plant and equipment on offer was past its effective ‘fit for purpose’ date, as confirmed by the owner of DMMeng, who is an expert in evaluating the state of quarrying equipment.

6. Quarrying – remote

All the factors identified above were relevant with the added challenge of staffing and family disruptions caused by relocation.

7. Freight hauling

Brunts had skills in freight operations but their prime mover and trailer equipment was not suited for line haul of containers or bulk freight. Significant new capital investment would be required and redundancy of their existing fleet.
The business did not have customer relationships or an established performance upon which to build a sustainable competitive advantage.

The summary of the workshopped observations was charted on the Brunt’s cama™ map below.

Transition Options & Recommendation

There was only one market sector in the top right quadrant of Brunt’s cama™ map. This clearly impacted the potential transition options for Brunt’s. Given Brunt’s competitive advantages they should maintain their focus and strategic intent of becoming the last operator logging native forest areas in East Gippsland through to 2030. While this was our finding, the Victorian Government closed the industry down December 2023.

Brunt’s had shown an interest in quarrying, however, to effectively enter a new market sector, an acquisition of an existing business was recommended, primarily to capture existing customer relationships and performance history /supply contracts (thereby moving the opportunity just into the right top quadrant of the cama™ map).

Brunt’s acquired the quarrying business in East Gippsland, McKinnon Earth Construction Pty Ltd. Understanding our work and codifying Competitive Advantage through the cama™ process created a pathway forward for Brunt.

Authors:
Scott Nelson & Derek Stott
Partners, nem Australasia
June 2025

How nem Helped Brunt’s Navigate their Legislated Forestry Closure Exit