Annual profits at Coillte surge 20% to €25.5 million

Coillte derives 32 per cent of its revenue from its non-timber activities, the chief executive, Mr Martin Lowery, said yesterday as the State forestry board announced a rise of 20 per cent in profits to €25.5 million (£20.08 million) for last year. Turnover increased by 9.6 per cent to €123.29 million.

Timber volumes grew by 9 per cent and revenues from this sector increased by 8 per cent, but the biggest growth was a 12 per cent increase in revenue in the non-timber area, which includes businesses such as nurseries, Christmas tree farms, forestry engineering and non-strategic forestry sales.

This Coillte Enterprises section of the company is set to expand in the immediate future as Coillte develops it into the building of communications masts and wind farms. Planning permission for the first of many planned wind farms - in the Bogheragh Mountains in Co Cork - has already been sought.

The concentration on the expansion of non-timber activities has been forced in part because of the EU's decision not to pay forestry premiums to the board for additional tree planting; this scheme was intended only for individual farmers. The decision has been challenged by the Government and a judgement is expected before the end of the year.

An investment of €45 million was made by the board last year in "forests for the future" and a €62 million investment by saw millers has closed the gap between Coillte's production and the capacity of the processing sector.

The chairman, Mr Ray MacSharry, said Ireland now had an internationally competitive processing industry. The Irish industry had 50 per cent of our construction requirements at present, but the immediate target was to raise it to 60 per cent. There was an incorrect traditional attitude that imported was better, he said.

Louisiana Pacific, the Waterford-based OSB (oriented strand board) plant, a joint venture with Coillte, made a reduced contribution to revenues.

Five new OSB plants have come on stream in Europe in the last year and supply is double that of demand.