FORESTRY
SMARTPLY production.
and wind energy (Land Solutions). So far so good – the company recently reported a record year of growth in 2017, doubling its operating cash from €15m to €20m and achieving record revenue of €298.7m. “We’ve invested quite a lot in our business over the last two years. Last year we put €60 million into Smartply to enable it to create value-added product. The whole concept here it to take a piece of wood from our forests and add the maximum value to it,” says Leamy. “Our job is to make sure we get the most value for that. So, instead of getting €10 or €15 per board we work on getting maybe €50 to €100 per board and we do that by doing the difficult things that our competitors won’t do. So in Waterford and Clonmel we [produce] things like fire retardant [panels], we do moisture resistant boards for skirting and architrave.” Last year, Coillte entered a partnership with energy giant BP and UK-based chemical company Accsys Technologies to open a factory in Hull that will produce the world’s first outdoor MDF product with a 50-year guarantee, which the company says will bolster the long-term future of its Medite plant in Clonmel. “An outdoor MDF which is
hugely innovative and really allows us to focus on the top-end value-add segment,” Leamy notes of that process. Change is also underway on the third prong of Coillte’s business activities – Land Solutions. Under that banner the company has developed four wind farms that Leamy explains will provide electricity to around 200,000 homes. “We are in the process of actually looking at the potential sale of those so we can reinvest that in the further development of maybe 25 sites,” he says. “Land Solutions is about maximising the development of each hectare of land that is non-forestry. And it’s about trying to ensure that we drive that value, but ultimately we don’t want to be a utility player and so it’s about jumping off at the right point in the development cycle.” Given the potential within the sector, Coillte is examining key global trends around demographics, climate change, technology and world markets as it seeks to define what it will be and do in the next ten years. Understanding the role it will play in the supply chain will be vital in informing its business plan in the coming years. But there are challenges in the road ahead. The State-owned
RURAL BOOST Given that Irish afforestation levels are well below our European counterparts, there’s a real opportunity to enhance the sector and provide a significant boost to rural employment. “There’s a real opportunity for us to embrace that as a country, to have something that is sustainable in terms of the long-term economic and social benefits and, from a jobs perspective, [there are] very few industries that would be growing their jobs in such a significant way in rural locations over the next ten years,” Fergal Leamy explains.
64 EAR TO THE GROUND
company faced criticism at the beginning of the year as a number of Irish farmers revealed they had been left without payments from the farm-forestry partnerships, though it asserted that “it is satisfied that there are no cases where farmers have not been paid what they are due and it is satisfied that it is fulfilling all of its contractual obligations.” And, speaking to The Irish Times in May, Leamy noted that the Irish State isn’t embracing the full potential of forestry with afforestation levels below the European average – 11 per cent versus 33 per cent – while the long-term benefits of forestry are perhaps not as widely recognised as they are in other countries like Canada. Brexit, too, has its part to play. Leamy recently raised the issue at the Timber Industry Brexit Forum in Dublin, explaining to EU Commissioner Phil Hogan and other delegates that the UK is Ireland’s only realistic market for trees. While Medite Smartply exports to 32 countries, the UK represents around 70 per cent of its business for several reasons. Firstly, it’s a heavy product and for sheer economic reasons it makes less sense financially the further it has to travel. Secondly, standards in the UK are similar to those in Ireland, meaning that Coillte’s product is more easily accessible. “The UK – Brexit or no Brexit – is the second largest importer of timber in the world. It’s right on our doorstep so we need to find a way of making that work,” Leamy says. Still, the outlook for the industry remains optimistic in the years ahead, fueled by the strong demand for timber that exists across the globe. “I’d be very positive,” Leamy says. “And the reason I’d be very positive is that, globally, the demand for timber is significant and looks like it’s going to continue to outstrip available local supply. I think Ireland is very well-positioned to supply some of that timber because it has a fast-growing commercial crop and that can reach levels that other countries have in terms of levels of afforestation. I think as a country we need to embrace the forestry sector more and that’s going to be a real development over the next few years, as people realise how important it is. If I go to Canada, which I do when we work with people over there, the forestry sector is seen as probably the most important sector in the country. I’m not saying that’s quite where we’ll be in Ireland but certainly there’ll be an evolution from where we are today to somewhere closer to that in the next ten to
