Coillte Harvesting Rights: Discussion with Irish Timber Council

Thursday, 2 May 2013

I thank the delegates for attending. I am well aware of Mr. Glennon’s business in Castlelyons. I pass it regularly. It is difficult to estimate its value to the north Cork economy, as there are many tie-ins upstream and downstream. I am sure the same applies to the other businesses of the other delegates.

There is no point in going through the delegation’s arguments, as they stack up from a business point of view. Putting the businesses of delegates at risk at a time of financial uncertainty makes no sense. Stability is the Government’s focus. There should be no change in that regard.

Coillte attended one of our meetings. I am concerned about its debt, including its pension deficit. In total, the debt is approximately €300 million, if my memory serves me correctly, comprising €120 million and €180 million. I will stand corrected. As such a level of debt would decimate any sale of Coillte, there is no point in selling the company just to pay another debt. There would only be a small profit. Who would replant our forests and so forth? The proposal does not add up.

It is bonkers. It just does not add up. This discussion is important because we must start to examine Coillte for the first time. The company only ever returned €2 million to the State and then suddenly in the past year or two it returned €10 million. Coillte has an inordinate amount of land, approximately 7% of the total land area. That is a pathetic return to the State from a business that is charging 30% more for its timber.

I am intrigued by the 29% premium. I run a small business. Whether a business is big or small the same criteria apply. I cannot understand why a business such as those operated by the witnesses would invest colossal money to upgrade and get a huge capacity in the timber sector. How was the expansion arrived at? Projections were supplied by Coillte or somebody who told the witnesses they would have a supply of logs but the projections were false. Why would millions of euro be spent by private business on trying to improve themselves? Obviously, the witnesses are bidding for timber, which is the reason the price has become high. Could the witnesses clarify if there is another issue?

I am against the sale of Coillte but I am very much in favour of seeing the work practices that are going on in Coillte scrutinised in great detail. The State is not getting value from Coillte. Perhaps we just left it on the back-burner for years and did not pay too much attention to it. So much more could be got out of it. I hear of log timber going to pulp. I hear of other practices that are going on and that the maintenance of the forests is not up to its previous specification. One of my employees worked in forestry many years ago when there was hands-on work and the company was particular about what it did. The same level of detail no longer seems to apply. Could the witnesses clarify those points? Like my colleagues I would be very disappointed if Coillte was sold but we should use the opportunity to study what has gone wrong and why Coillte is not returning moneys to the State.