It doesn’t normally make the headlines, but investment in the Irish forestry and forest products sector has increased steadily in recent years. Sawmills such as Murray Timber, Glennon Brothers, GP Wood and ECC have invested an estimated €45m in kiln drying facilities, mechanical grading and new technology.
Board mills have also been investing in their plants. For example, last December, Minister for Agriculture Michael Creed officially opened the €59m Coillte Panel Product Medite SmartPly manufacturing facility in Belview, Waterford Port.
Past investment in the wood processing industry has ensured that Ireland has three board mills and eight medium- to large-scale sawmills that compare with the best international mills.
Investment in establishing and improving the forest resource has largely been confined to landowners – mainly farmers – and the State. Farmers invest their land and time, while this is matched by the State in grants and premium payments amounting to €110m annually.
Annual land investment in forestry is now estimated at circa €80m based on current forestry land prices of €12,000/ha. Major one-off investments in forest establishment and management are rare, but this is changing. The recent announcement of €200m EU support for Irish forestry is described as an opportunity to “help private owners of small-scale forests across Ireland to improve forest management and strengthen the supply of wood for commercial use”.
The European Investment Bank (EIB) and the Irish Strategic Investment Fund (ISIF) are backing the initiative, which is the first Irish agricultural project to be backed by the European Fund for Strategic Investments (EFSI). EU long-term loans are provided to support:
Dasos
Dasos received €83.5m, comprising €55m from the ISIF and €28.5m from the EIB. The project will see the EIB and the ISIF support a €112m investment by Dasos. Dasos announced that “additional support is expected from other investors as the initiative progresses”.
“Over the coming years, the Foraois Limited Partnership, Dasos’s investment instrument in Ireland, intends to help overcome diverse challenges faced by a fragmented industry and revitalise forestry in rural communities,” a company spokesperson said.
“Working with both Irish and European partners, I am pleased to launch the partnership’s first operations in Ireland,” confirmed Dr Olli Haltia, chief executive officer of Dasos.
“By supporting direct land acquisition, lease contracts and other forms of land management, the Dasos initiative intends to develop into a professionally managed portfolio of up to 18,000ha across Ireland in the coming years,” he said.
“New forest management investment by Dasos seeks to ensure a more predictable supply of wood, including previously subsidised forests where subsidies are coming to an end.”
Dasos will purchase or lease mature or semi-mature forests through Irish forestry companies Green Belt, The Forestry Company and SWS Forestry.
Coillte
Coillte received a €90m loan, which will be used to finance the cost of 35,000ha of reforestation, forest road construction, forest management and other initiatives, such as upgrading forest walks and bike trails as part of its open forest policy.
None of the Coillte loan will be used for private forestry, although the company plans to re-enter a public-private partnership forestry initiative, which Fergal Leamy discussed at the launch and also announced at the recent Irish bioenergy conference.
“This initiative will be focused on acquiring semi-mature forest plantations,” he said.
“The private forest owner will be paid an annual premium for productive crops from year 21 to final clear-fell – this premium will essentially replace the payments received up to year 20 from the Forest Service, thereby providing a continued secure cash income for the grower.”
The farmer retains ownership of the land and the company will provide benefits, such as timber markets and certification. Further details will be announced in the coming weeks.
Forestry producer groups, the IFA and forestry companies have yet to comment on these announcements. Whatever the response, these initiatives demonstrate that the Irish forestry and the forest products sector – State and private – are likely to attract increased interest from Irish and overseas investors.
Minister to launch Tipperary-Limerick woodland group training scheme
The Forestry Programme 2014-2020 contains a measure to promote training initiatives in forest management and related activities. The scheme is designed to establish knowledge transfer groups (KTGs) throughout Ireland.
A pilot scheme proposed by the Limerick and Tipperary Woodland Owners Ltd (LTWO) has been approved by the Forest Service.
This pilot will be launched by Minister of State for Food, Forestry and Horticulture Andrew Doyle at the owners’ AGM in Hollyford Community Centre, Co Tipperary, next Wednesday, with registration from 10.30am.
“The scheme will apply to forest owners in Tipperary, Limerick, Clare and Donegal,” said LTWO chair Michael Ryan.
“The initiative is being modelled on existing KTGs for beef, sheep and other sectors in agriculture,” he explained.
“The groups will be made up of between 10 and 20 members, facilitated by a professional forester. Some topics will be mandatory, but participants will also be encouraged to choose aspects of forest management which are of interest to them.”
The pilot will involve seven meetings and events spread over six months, while participants will have the cost of attendance reimbursed. Details are available on the Department of Agriculture and Limerick and Tipperary Woodland Owners Ltd websites. Further information and membership available from Michael Ryan, Solohead village, Co Tipperary, or email michaelmjryan@eircom.net.