2018 International Forest Industries IFI June July 2018 Digital | Page 12
LOGGING & BIOMASS NEWS
Irish forestry could double in value
Coillte predicts Irish forestry will
double in value to nearly €5bn. But
chief executive Fergal Leamy insists
State is slow to embrace sector’s
potential reports Eoin Burke-
Kennedy – Irish Times.
The chief executive of Coillte
estimates that output from Irish
forestry will double in value to
nearly €5 billion over the next
10 years, as the current crop of
trees mature and the timber is
harvested.
However, Fergal Leamy, who
took over at the helm of the State’s
forestry company in 2015, said the
State is still failing to embrace its
forestry potential, with forestation
levels and afforestation (planting)
rates well below the European
average despite the fact that
Ireland enjoys faster tree growth
than most EU rivals.
Around 11 per cent of the
Republic’s land mass is forested
compared to a European average
of 38 per cent, while around 4,000
hectares a year are being converted
to forest, significantly below the
Government’s target of 7,000
hectares.
“There’s not an acceptance of
forestry in this country. If you look
at other countries it is so embraced
as a sustainable industry, an
industry that adds economic and
environmental value,” Mr Leamy
said, hinting that other sectoral
interests still dominate the
Government’s agenda.
“We just don’t get it yet,” he
said, noting the planned expansion
in agricultural and the likely growth
in carbon emissions that implies
will need to be offset by a major
afforestation programme.
Traditionally Coillte, in contrast
to its counterparts aboard, has not
undertaken afforestation projects
because the economics have not
made sense, but Mr Leamy believes
this will soon change as Coillte’s
10 International Forest Industries | JUNE / JULY 2018
financial position improves and the
Government considers allowing it
access to grants.
He was speaking as the semi-
State announced its full-year
results for 2017, which showed it
had doubled its operating cash
from €15 million in 2016 to €30
million in 2017 on foot of record
revenues of nearly €300 million.
As a result, it paid the
Government a dividend of €8
million, 29 per cent up on the
previous year .
Fergal Leamy,
Coillte chief executive
Five-year plan
Coillte is in the middle of a
major five-year restructuring
process aimed reducing its reliance
on large-scale land transactions
and focusing on its three core
business divisions – forestry,
wind energy and wood panel
manufacturing.
Mr Leamy said €20 million
had been shaved off its cost base,
principally by reducing head office
staff from 100 to 17 and reducing
the group’s reliance on outside
consultants .
“We really simplified what
we were doing. We’re not that
complicated a business – we grow
trees, we sell logs, we manufacture
timber products and we build
renewable energy wind farms,” he
said.
His plan is to create an annual
return on assets for the State of 5
per cent by 2020 – last year it was
3 per cent.
Operating cash from its forestry
division increased by 13 per cent to
€25.7 million driven by an increase
in sawlog sales volumes and
improved sawlog prices, Coillte’s
figures show.
The company has begun the
process of putting up for sale its
stake in four wind farms it Co-
developed with ESB, USE and Bord
Na Móna, while it has identified
25 sites that are suitable for large-
scale landforms and will later this
year seek a strategic partner to
develop the sites, which will have
the potential to generate electricity
for up to one million homes.
Coillte is expected to generate
up to €125 million from the sale
of its wind energy four projects,
with the cash recycled through the
business.
“The business is seeing good
momentum in 2018 with a strong
performance in the first quarter,”
Mr Leamy said.
“This is a crucial year for
Coillte as we expect to see a step
change in earnings following an
intense phase of organisational
restructuring and investment,” he
said.