Coillte Forest

Coillte Forest manages all aspects of the Group’s forestry business. These include the establishment of plantations, timber harvesting, sales and marketing, recreation and environmental management and the provision of forestry services to customers.

2010 was a successful year for Coillte Forest. Roundwood sales were strong in the first half of the year but demand declined as the year progressed with the result that overall sales of sawlog and pulpwood amounted to 2.26 million m3, a 6% decline on 2009. Prices for sawlog were on average 46% higher than in 2009, which was Coillte’s worst ever year for log prices. These price rises were driven by better than anticipated sales of construction sawnwood by our sawmill customers into the UK market. However, demand for logs and prices reduced sharply in the second half of the year. Sales of pulpwood were strong throughout 2010 reflecting strong demand for fibre in the wood panel and energy markets. We imported pulpwood from Scotland to meet increased demand.

During 2010 we continued to work closely with our sawmill customers to promote the use of Irish timber in the UK at events such as the Best Build show in Birmingham. We also enhanced how we communicate and transact with our sawmill customers with the successful launch of an extranet, providing customers with improved access to information.

During the year we completed a forecast of roundwood that will be available from our forests in the period 2011-2015 and communicated it to the industry. We continued to focus on developing new revenue streams. An example of innovation in this area was the fulfilment of the first commercial contract for bundled forest residues for use in energy generation.

We planted just over 6,000 ha of forests, through reforestation and new plantations for private clients. We also built and upgraded over 250 km of forest roads.

2010 was also one of the worst years on record for forest fires with approx 800 ha of Coillte’s forests lost during the year. A concerted awareness campaign was launched to warn people of the dangers of forest fires and of burning vegetation. Significant efforts were made by Coillte employees, our neighbours and the emergency services. Thanks are due to all involved, without whose support more forests would have been lost to fire. We continued to improve the management of our fire planning systems with enhanced links to An Garda Siochana and the Defence Forces during the year.

Recreation

Coillte is the largest provider of outdoor recreation in Ireland with an estimated 18 million visits to our forests each year and an estimated value to users of approx €100m per annum. We manage 10 forest parks and over 150 recreation sites and over 50% of all off road national long distance hiking routes.

Despite the challenging economic climate Coillte secured over €1m in external funding to support the recreation service across the company, mainly from the Department of Community, Equality and Gaeltacht Affairs, the Irish Sports Council and through the work of the Dublin Mountains Partnership.

In 2010 a record number of events were held across the country for National Trails Day, led by Coillte, to promote the great network of trails which exist for people to enjoy. An estimated 20,000 people participated in the fun. Our partners in the event are the Department of Community, Equality and Gaeltacht Affairs, the National Trails Office of the Irish Sports Council and Fáilte Ireland, as well as the Countryside Access and Activities Network in Northern Ireland.

In October Coillte officially launched the Dublin Mountains Way. This marked the culmination of two years work by the Dublin Mountains Partnership in developing a trail which links the west Dublin suburb of Tallaght with Shankill in the east via a 43 km trail across the Dublin Mountains.

During 2010 Coillte also announced the construction of the first ever purpose built mountain bike trail in the Dublin Mountains, which will add to our existing world class facilities at Ballinastoe in County Wicklow, Ballyhoura on the Limerick Cork border and Derroura in County Galway. 

Environment

The Forest Stewardship Council (FSC) has certified since 2001 that our forests are managed responsibly in accordance with strict social, environmental and economic criteria.

Coillte manages over 15% of its entire estate primarily for nature conservation and biodiversity and 2010 saw us further enhance our reputation in this area with the securing of another EU funded LIFE project. This project is the largest raised bog project in Ireland and is a fourth EU LIFE project managed by Coillte, a unique achievement in Ireland. This new €2.1m raised bog project builds on the work already done over the last four years in restoring blanket and raised bogs.

During 2010 Coillte also received an Energy Globe Award for its Restoring Priority Woodlands Habitats Project which has restored 550 ha of unique native woodland habitats on nine sites across the country. Since year end we have been informed that this project has been selected as one of the 19 Best LIFE Nature projects out of the 59 that were completed and evaluated in 2010.

Outlook

Demand for sawnwood in Ireland in 2011, based on 10,000 housing unit starts, is expected to be less than 400,000 m3. This highlights the need to secure and strengthen Ireland’s market position in the UK and the performance of the UK timber market will have a significant bearing on Coillte’s performance in 2011.

The UK economy which had been performing strongly early in 2010 began to slow towards the middle of the year with commentators anticipating 2011 to be another difficult year. 

The UK has also undergone a dramatic slowdown in the construction sector, however the level of housing starts showed tentative signs of increasing in 2010 from a  historically low level in 2009. The expectation by the Timber Trade Federation remains that overall timber demand will increase by 2.4%. With an import demand for 5.1 million m3 of timber, this should offer opportunities for Irish suppliers.
 
Coillte Forest will continue to focus on reducing costs and transforming how we do business. We are committed to developing new and innovative ways to better serve our customers in 2011 and beyond.