WANGARATTA'S Alpine MDF Industries will receive the largest share in $10.4 million of Federal Government bushfire recovery funding which is on its way to the local region.

Alpine MDF will use its $4.379 million for re-manufacturing, using new plant equipment to innovate and increase capability for the production of primed mouldings and painted flat panels.

Helen Haines (MHR, Indi) said the long-awaited funding was vital for Indi-based timber processing companies to innovate and protect jobs.

Along with Alpine MDF, Benalla firms D&R Henderson and Ryan & McNulty, and Wodonga’s XLam will share more than a quarter of the $40 million national Forestry Recovery Development Fund aimed at building competitiveness, investing in new technologies and lowering energy costs following last year's Black Summer bushfires.

Recipients of the funding are required to match 50 per cent of the project costs.

"The fires at Shelley in the Upper Murray and at Abbeyard near Myrtleford burned almost 6400 hectares of plantation timber and had a major impact on softwood supply," Dr Haines said.

"The industry worked very quickly to put together a comprehensive, fully-costed support package and liaise with my office so I could raise it directly with Agriculture and Emergency Management Minister David Littleproud, who saw the plantation damage with me in the Upper Murray 11 months ago.

"I also made the case to Assistant Minister for Forests Jonno Duniam for urgent action and, with the industry and Bushfire Recovery Victoria, briefed National Bushfire Recovery Agency deputy co-ordinator Major-General Andrew Hocking on the ground at Ovens in March, last year.

"Forestry and timber processing provides 900 jobs in Indi, with about 550 people working in mills and manufacturing and another 340 managing softwood plantations.

"So it’s a really welcome vote of confidence that more than a quarter of these competitive grants are flowing to Indi businesses to help fund new processes and product lines, technology investment and support vital jobs in our communities."

D&R Henderson will receive $3.294 million for a new heat plant that will use waste products as a fuel source to power kilns, saving energy costs and reducing the amount of waste to landfill.

Ryan & McNulty was awarded $1.188 million for new technology to process smaller, lower-grade sawlogs and produce a quality, value-added product suitable for structural beams and furniture manufacturing.

XLam has received $1.529 million to update equipment, reduce production costs and improve competitiveness.

"I thank the government for acting," Dr Haines said.

"It’s very welcome after months of work with the timber industry last year to get the government to publish the fund’s guidelines and open applications for this public-private investment program."