Laois Sawmills Ltd., located in the centre of Ireland, is expanding from an annual roundwood intake of 100,000 m3 to 250,000 m3 over the next three years, with the additional timber being sourced from private forest owners. John Kelly, the sawmill Purchase Manager is tasked with securing this supply. We spoke to him about this and how the forest harvesting sector is scaling up in Ireland.
What is the business of Laois Sawmills?
The sawmill processes 100,000 m3 of pallet wood and uses 5,000 – 6,000 m3 of pulp wood as boiler fuel. (Note: Pallet wood is the term used for sawlog with a minimum top diameter of 14 cm and various lengths between 2.5 m and 3.7 m. Pulp wood is small roundwood, 3 m in length and with a minimum top diameter of 7 cm. Log quality parameters are more strict for small sawlog, and less strict for small Roundwood.) Approximately 60 % of annual roundwood intake is supplied by Coillte, the Irish state forestry company, and the remaining 40 % is supplied from private forest owners. The sawmill produces pallet board, fencing board and fencing panels. Pallet board is mainly sold in Ireland and about 70 % of the fencing boards and panels are exported to the UK with the remaining 30 % is sold in Ireland. We are currently building a new sawmill which will be up and running in September 2018. The annual roundwood intake will be increasing to 250,000 m3 by 2021 and we are expecting practically our entire additional intake to be sourced from private forest owners.
What are the main tasks and responsibilities in your current job?
My current position as Purchase Manager at Laois Sawmills is to develop a sustainable source of roundwood from the private forestry sector, and once sourced, to purchase, harvest and transport timber from private land owners. When harvesting machines start a new site I must be there to ensure the harvest plan is understood and before they finish I need to be on site to ensure the land owner is satisfied.
In fact, my main task is to maintain information flow with the harvesting contractor, forest owner, forest manager and other timber buyers. I monitor timber quality and volume throughout the harvesting operation and compile a lot of paperwork to describe the chain of custody and ensure prompt payment to the forest owner and harvesting contractor. We currently employ five ensure harvesting contracting companies directly. We also purchase timber from five other harvesting contractors.
What is your perception of harvesting contractors in Ireland?
I find the companies that are invoicing promptly and accurately are doing better than the others. In other words, these contractors understand the business side of contracting in addition to the production role. Business management is the most important area for the forest contracting sector to improve on, in my view. I would see this as evolving better information flow in invoicing, timber dockets and timber measurement and standardising and fully digitising the paper work.
Contractors harvesting in the private forest sector have been running older equipment due to the lack of consistent work. Now that private forest timber is coming on stream they are investing in new equipment but slowly. Business planning is vital for financing new machines successfully.
Good contractors are well organised in maintaining their machines, ensuring output matches the scheduled production but some contractors struggle with this, having machine breakdowns, costly repairs on site and failing to meet production targets.
Contractors who are well networked, and in regular contact with other contractors and hauliers, are now getting a better understanding of the forest sector and are aware of the demands and requirements on them. Harvesting contractors need to gain better understanding of the broader requirements of the forest sector. The industry is changing rapidly in Ireland, so everyone working in the sector needs to stay informed. Meetings are often organised for foresters and forest owners informing them of the changes happening in the sector, but the contractors are often missing out.
In your opinion, what is the outlook over the next ten years for the forestry sector in Ireland?
Despite Brexit, there is huge potential in the UK timber market and the Irish wood processing sector should be able to increase timber supply into the UK. Also, the demand in the Irish market will increase with the building of new houses. Over the next 10 years there will be a large increase in volumes coming from the private sector. This new resource brings many challenges though.
Due to windblow and premature clearfells, volume will not continue to grow as predicted, and it will be a challenge to manage and regulate volume increment and annual production from the private forest sector. This will lead to some smaller log buyers struggling to reach their quota of supply. Afforestation, which has created this private forest resource over the last thirty years, is stalling at present and is not reaching planned levels. Unless the public view of forestry changes and new ways to stimulate land owners are not found, planting will not increase.
All parts of the industry need to better understand their role and the role of the other people linked in the supply chain. This will require more foresters and forest owners to gain a better understanding of harvesting and how contractors operate. A very simple example is how forest owners and foresters are often not aware of the size of harvesting equipment, and therefore the need to create appropriately scaled site access and forest roading.
There will be need for new machine operators and truck drivers as the older operators are not always being replaced. Other sectors can offer better pay and conditions so there is need for forestry career promotion to encourage the supply of well-trained, competent operators. Management intensity and responsibility of harvesting sites by contractors will increase, as safety, payments, volume recovery and quality of work carried out will need to be monitored and demonstrated. This will put more pressure on contractors to change from being machine operators focused on production only to business managers, where productivity will be one of many tasks to be controlled.
Text: Tom Kent, Waterford Institute of Technology