The jobs of more than 100 Tasmanian timber workers have been secured with processor Ta Ann Tasmania confirming it will remain in the state.
But the company has warned it will collapse if the Upper House scuttles forest peace deal legislation.
The veneer producer says its timber quota will fall by almost 40 per cent under plans to protect half a million hectares of forest from logging.
But executive director Evan Rolley says the company is supporting the plan because will bring with it critical environmental backing for the company.
"They've given us assurances that they'll stand shoulder to shoulder with us and help us with and help us with our products and our markets," he said.
Ta Ann plans to overhaul its operations and source more timber from private forests.
"We'll have to diversify our supply away from the state forests supplied by Forestry Tasmania, we'll need to talk to private forest owners." "We think our firm offers an opportunity to private forest growers to process more of their wood here in Tasmania through our veneer mills." Mr Rolley warned that Ta Ann would pull out if the Upper House scuttled the forest peace deal.
The Lower House passed legislation to reduce native forest logging last week and it goes to the Legislative Council next month.
Huon MLC Paul Harriss said yesterday the peace deal was a dud based on a flawed process and he would not support the legislation.
Mr Rolley said the company had started lobbying MLCs.
"We will work very hard to brief Legislative Councillors about the future (because) we won't have a business in Tasmania," he said.
"We will not have a sound basis on which we can go back into the market, we are just holding our business together today.
"We have explained to them (MLCs) that we believe this is the best chance for our company to be able to continue to operate, to reinvestment and to diversify its markets." Tear up pledge Mr Rolley also says the Liberal's plan to rip up the peace deal is not a viable option for the company because it does not provide it with critical environmental backing.
The Opposition has pledged to return any new reserves created under the forest peace deal to working forests if it wins majority government.
Deputy Opposition leader Jeremy Rockliff has confirmed a Liberal Government would rip up laws reserving more forests and halving the sawlog quota if they pass the Upper House.
"What we need in Tasmania is a majority Liberal Government that sees common sense," he said.
Deputy Premier Bryan Green says the war over native forest logging would resume if that happened.
"I don't think Tasmanians in the majority want to see that happen." The Federal Environment Minister, Tony Burke, met the deal's negotiators yesterday.
He has warned the agreement will quickly unravel if it is not implemented in full.