Irish Timber Council: Sale of forestry rights puts 2,500 jobs at risk26/02/2013 - 11:24:47
The proposed sale of Coillte’s harvesting rights could lead to the closure of all ten of Ireland’s sawmills with the loss of 2,500 jobs, according to the Irish Timber Council (ITC).
Coillte's forestry harvesting rights will be debated in the Dáil this evening since, under the bailout programme, the Government is planning to sell the rights for an estimated €600m.
An ITC report finds that it makes no sense for the Government to proceed with the sale from a commercial, economic or financial point of view.
Pat Glennon, Chairman of the Irish Timber Council said: "Ireland’s sawmill operators are already paying a premium for Coillte sawlogs which account for 80% of the available supply in Ireland. Any purchaser of the harvesting rights is naturally going to take advantage of this and increase prices further in order to secure a quick return on their investment.
"There is no room for sawmill operators to absorb any level of price increase and the consequence is that sawmills could close with important employment being lost in rural areas."
According to the report, any benefit to the Exchequer from the sale will be "small and disproportionate" to the negative impacts on the sawmill sector.
These impacts include the purchaser choosing to export all of the available log thereby forcing sawmills to close; the purchaser restricting the flexibility of sawmills to harvest sawlog in line with demand; and the purchaser not supplying sawlog at regular intervals to meet demand.
The report recommends a partial sale on a phased basis as an alternative to the full sale of harvesting rights.
Mr Glennon said: "Ireland has the best conditions for growing trees in Europe and instead of selling key State assets in this area, the Government should be investing in stimulating the industry."
The report recommends that the Government should encourage Irish sawmills to add value, grow employment and to export more processed product.
Mr Glennon added: "Before any decisions are taken about Coillte’s future the Government must ‘stress-test’ the implications of a full or partial sale of harvesting rights in relation to the future commercial viability of the sawmill sector."
The report also advises that if the Government does proceed with the sale then there must be guarantees put in place, that will protect security of supply for the sawmill operators.
The ITC is urging Government to not sell the harvesting rights but to instead secure monies from the privatisation of other State assets.
more stories like this:
- once per day, no spam.