Timber company Carter Holt Harvey has followed through on a threat to close south-east mills in South Australia after a dispute with the SA Government.
A total of 94 jobs will go when the company shuts its Lakeside mill and its pine mouldings plant next month.
Carter Holt Harvey management travelled to Mount Gambier to give the bad news.
The Lakeside sawmill and Pine Mouldings facilities will shut on December 14, with 207 jobs to go.
Prafull Kesha of Carter Holt Harvey said some of those workers would be moved elsewhere.
"We've created at the same time 113 new positions at our Jubilee Highway sawmill so there's a net impact of 94 roles," he said.
Employment Minister Tom Kenyon promised help for the affected workers.
"Services offered to the workers will be the same as those provided to those retrenched from Kimberly-Clark Australia in Millicent," he said.
"All workers will be supported through the SA Government support package for a period of 12 months after their retrenchment." He said the Limestone Coast Career Development Centre would provide a range of job search and career planning measures.
The forestry union had warned for months of impending job losses and blames the Government, accusing it of failing to reduce log prices before a recent sale of Forestry SA's forward harvest rights.
Union secretary Brad Coates said the Government responded poorly to the concerns.
"Now the reality is starting to hit in and it's now time for them to step up and be mature about it," he said.
"We basically warned them that this would and could happen if they didn't take it seriously.
They decided to not take it seriously and as a result workers have paid with their jobs." Rejection The Government did offer Carter Holt Harvey a $27 million assistance package, but the money was rejected by the company's owner.
"The union really needs to direct its anger towards New Zealand's richest man, Mr Graeme Hart, who turned down a significant offer of assistance," SA Treasurer Jack Snelling said.
The Treasurer said cutting log prices would only have hurt other timber companies.
"I wasn't going to sacrifice the small mills in the south-east to prop up Mr Hart," he said.
The money previously on offer to Carter Holt Harvey is now being offered by the SA Government to the other mills.
Mount Gambier Mayor Steve Perryman says mill closures show the region must diversify.
"We can continue to do more of the same and have the likelihood of more of these outcomes with job losses or as a region we can look at other opportunities in other areas and pursue those with vigour and try to bolster our economy and our employment," he said.
The independent MP for Mount Gambier, Don Pegler, says industry restructuring is needed to compete internationally.
"There won't be as many people employed but I think the timber industry has a bright future, particularly once we get through this global financial crisis which has only just come home to roost really here now," he said.
Forestry industry analyst Robert Eastment says the problem is the timber industry in the region has lost its competitive edge.
"They haven't really got any world-scale mill there.
You know it's been under-invested and they have been run down," he said.
"I'm sure a lot of people will be really upset to hear that but, look, I mean at the end of the day you've got to take a cold look at it.
"If you look at the mills there compared to the ones in places like Scandinavia and Europe you know they are underperforming." Mr Eastment says cheaper logs are not the answer.
"If you give away cheaper logs at the end of the day then what's going to happen is that the mills still don't invest," he said.