The issue of harvesting rights from Coilte owned forests has come to the fore in recent weeks, after it emerged that the State plans to out-source those rights, a move that sawmill owners believe will leave them in dire staights becasue they won’t be in a position to compete with the larger international companies that will subsequently saturate the market.
“The proposed sale of Coillte harvesting rights poses a major threat to the future of the sawmilling sector in Ireland,” Mike Glennon, joint managing director, Glennon Brothers told the Leader on Monday. “Coillte supplies over 80% of the logs to sawmills in the Republic of Ireland, and log costs represent two thirds of the end product costs; therefore they have a very significant impact on the sawmilling sector. Coillte’s commitment to sell 1.5 million m3 per annum on a fortnightly basis is vital for the survival of the sawmilling sector, and any disruption to this regular supply of material from these auctions could be disastrous for the industry.”
The Irish sawmilling sector employs 2,500 people and is an integral part of the Irish forest products sector, which employs 12,000 people. It generates approximately €2.2b annually which is approximately 1.3% of GDP. The vast majority of jobs within the sector are located in rural communities, subsequently providing a significant boost to local economies.
“The sawmilling sector is already struggling to cope with the effects of log shortages, as a result of incorrect government log forecasts,” Mr Glennon continued. “In recent years, the collapse of the Irish construction sector, and the consequent fall from 90,000 new housing units per annum to less than 10,000, has led the sawmills to vigorously seek new export markets to survive. As an example, Glennon Brothers now supplies construction timber to five distinct markets, as well as a range of value added products. Our concern is that the Government will make a decision that will impact negatively on employment, damage our success in exports, and could potentially threaten the long term viability of the sector.”
He conlcuded by saying, “The Minister for Agriculture had previously indicated that the value of Coillte’s Harvesting Rights for a suggested 80 year period would be between €400 and €600m. Coillte has a combined debt and pension deficit of €300m, so the maximum net return to the exchequer is €300m”.
“To put this into perspective, the Irish forest product sector exported over €300m last year,” the Longford businessman added. “Are we prepared to jeopardise the future of this important sector for €3m per annum? At a minimum, if the Government decides to move ahead with the sale, then Coillte harvesting rights should be sold off in a number of smaller lots. This at least, would prevent control of a strategically important national resource resting in the hands of a privately owned monopoly.”