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Looking Ahead Opportunities For Industry

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The forestry industry continues to play an important role in communities in many regions around the country, and amid growing demand for forestry products there is strong potential for growth in the coming years, however a number of challenges will need to be addressed going forward.

An Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report, released towards the end of last year, sheds light on the scale of the industry and how it compares internationally.

The ABARES Insights report reveals that in 2017-18:

  • There were 32.9 million m3 of logs harvested in Australia, generating $4.9 billion in sales and service income across the forestry and logging industries
  • The log harvest comprised 4 million m3 of native forests and 29 million m3 of plantations (with the share of logs harvested from plantations increasing from 68 per cent in 2007-08 to 88 per cent in 2017-18)
  • There were 28.1 million ha of native forests and 1.9 million ha of plantations available and suitable for commercial harvest
  • Taking into account the cost of intermediate goods and services purchased, the forest and wood product manufacturing industries are estimated to have added $9.2 billion (0.5 per cent of GDP) to the national economy
  • Exports totalled $3.6 billion (with exports having risen by 76 per cent since 2012- 13, primarily driven by growth in log and woodchip exports to China)
  • While the total volume of logs harvested in Australia is small compared to countries such as the United States, Canada and Russia, Australia was the second largest exporter of woodchips (in value terms) and the eighth largest exporter of whole logs (in volume terms)
  • The vast majority of log and woodchip exports currently go to China, with Australia also exporting woodchips to Japan and paper products to New Zealand

The forestry industry continues to play an important role in communities in many regions around the country, and amid growing demand for forestry products there is strong potential for growth in the coming years, however a number of challenges will need to be addressed going forward.

Looking Ahead: Opportunities For Industry

Growing domestic demand has the potential to create opportunities for the forestry industry, however it is a matter of ensuring that adequate measures are in place to fully realise the industry’s potential.

According to ABARES’ Economic potential for new plantation establishment in Australia: Outlook to 2050 report, domestic softwood sawlog availability from current plantations is expected to fall short of demand by 3.4 million m3 in 2050, assuming log exports remain constant at 2015-16 levels.

As is noted in the Insights report:

“This has raised concerns that the industry could be missing out on opportunities for growth that may be taken up by other countries or industries.”  The federal government’s Growing a better Australia: A billion trees for jobs and growth plan has been designed to address these issues, stating that:

“Growing the size of Australia’s plantation estate will provide confidence to our forest industries that they will have the resource security they need into the future to underpin their investment decisions for decades to come.”

The plan outlines a goal of a billion new trees in forestry plantations over a decade to meet Australia’s future needs for wood and fibre, providing timber for new homes, along with various wood and fibre products. Among the measures proposed to support this goal are:

  • The creation of Regional Forestry Hubs – focusing on existing softwood plantation and processing regions, set up to serve a range of purposes, including identifying new plantation opportunities
  • Deliver policy mechanisms and onground support within the hubs – designed to provide farmers confidence to participate in farm forestry ventures
  • Reduce barriers to forestry expansion – supporting the planting of more trees, with a focus on the hubs
  • Smarter resource use – helping industry extract greater value from forestry products
  • Growing Community Understanding – building public support for sustainable forestry activities

Progress made in the coming years could provide ongoing, long-term benefits, with the plan pointing to the potential to boost the Australian economy, and drive jobs and growth in rural industries and regional manufacturing.

AFPA Welcomes Federal Government Bushfire Recovery Package

The Australian Forest Products Association (AFPA) has welcomed the federal government’s announcement of a $50 million bushfire recovery package, supporting fire-impacted forest product industries.

The federal government has advised that the measures include:

  • A $40 million Forestry Recovery Development Fund for competitive grants supporting processors to navigate future wood supply shortages through innovation and product diversification
  • A $10 million fund for the establishment of storage facilities for processed timber products, fire-affected logs and other forestry products

“We are pleased that the federal government has listened and responded to the crisis facing our industry as a result of the bushfires,” AFPA Chief Executive Officer Ross Hampton stated.

“The $40 million Forestry Recovery Fund will support timber processors facing significant, long-term reductions in log supply to retool and upgrade their mills, while the $10 million Salvage Log Storage Fund will boost mills’ capacity to process and store the short-term surplus in burnt logs, particularly in the NSW South West Slopes region, where around 40 per cent of the softwood plantations were fire-damaged.”

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