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Summary of full report
A.G. Brown and C.L. Beadle (Editors)
July 2008
RIRDC Publication No 08/113
RIRDC Project No CVF-2A
Executive Summary
What the report is about
This ‘Plantation Eucalypts
for High-Value Timber’ conference proceedings addresses current challenges
in developing a viable industry for plantation eucalypts to produce high-value
timber. The focus is on the need for strong science to inform investors
and reduce risk, and on areas where a lack of information may be impeding
investment in high-value eucalypt sawlog plantations. These proceedings
compile the presented papers and summarise the discussion forum. The papers
span current research and investment issues along the whole value chain.
Who is the report targeted
at?
These proceedings are intended
as a resource for decision-makers influencing solid-wood plantation policy,
as well as researchers, research investors and plantation managers.
Background
Australia has a well developed
plantation-based softwood solid-timber industry; although there is a significant
eucalypt (hardwood) plantation resource it almost entirely targets the
pulpwood market.
The hardwood sawlog industry has relied heavily on native forests, and to date investment in plantations has been small. This is despite increasing global demand for hardwood solid-timber products and decreasing domestic availability. Australia needs to encourage investment in and valueadding through its plantation estate in order to be self-sufficient in a larger range of wood products, and globally competitive. The reasons for under-investment in hardwood plantations for producing high-value solid-wood products are complex. This conference examines existing knowledge, and the issues and challenges in increasing investor confidence in current and emerging markets for these products.
Objectives
The conference objectives
were to:
Members of the conference organising committee were drawn from private industry (growing and processing), state government policy and extension bodies, and national research providers and funders. The committee defined key areas along the solid-timber production chain where authorities from each field were asked to review current research in Australia and to identify knowledge gaps and research requirements. The speakers drew upon experience from Australia, New Zealand, South Africa, South America and Europe to identify research and development priorities that will help develop investor confidence in this sector of the forest industry.
Key results
Research funding and
status of knowledge
Expenditure on research
and development in the forest industry has declined. A range of collaborative
groups provide funding for research, but there is no clear framework to
enhance coordination between these groups in setting funding priorities.
Tree improvement. Over recent decades the tools and knowledge necessary to efficiently domesticate new crop species have become available. Work to date on a range of eucalypts potentially suitable for sawlog plantations has been valuable, but it can only be described as preliminary despite the potentially high returns from such investment. The need for sustained and timely investment with attendant lead time remains.
Status of knowledge on silviculture. As hardwood plantations for sawlogs are being developed on non-traditional and marginal sites, different species and more complex management than pulpwood plantations are required. Process-based models must be used to model risk. Establishment practices must be revised with greater emphasis on survival, growth, form and health on these sites. In addition to commonly-planted species belonging to the eucalypt subgenus Symphyomyrtus, species in Monocalyptus and Corymbia should be considered for sawlog plantations. The relationship between silviculture and wood properties requires further work, and the variation within and between species in properties affecting sawing and—particularly—peeling remains largely unknown. Minimising log end-splitting during harvesting and handling, and reducing drying times in sawn wood while limiting degrade, also remain challenges. Hardwood sawlog research must also examine the economics of farm forestry and the commercial use of trees to pursue natural resource management outcomes.
Industry opportunities. There is an opportunity for non-durable plantation eucalypts to replace pine in housing construction. For durable timbers, the competitive advantage will continue to be in matching species characteristics to niche end-user demands; higher prices can be anticipated for these products because of relative scarcity. The challenge is to produce the required mix of products in commercially viable plantations. Profitability of both plantations and harvesting operations is maximised by finding a market for every part of the raw product. Price structures should provide financial incentives to all elements of the supply chain. Solid-wood researchers and marketers must be aware of trends in the choice of materials for housing, such as the use of hardwoods in structural veneers and composites.
Industry investment in the hardwood plantation sawlog sector
Reasons for insufficient large-scale investment in hardwood sawlog production include the long-term nature of the capital requirement and a lack of suitable processing infrastructure, resource security and skills. Robust economic arguments are required to attract the essential land base from other land-uses.
As a result of changes to secondary-market taxation, managed investment schemes are the investment structure most likely to finance establishment of long rotation plantations on a commercial scale, while timberland investment management organisations are more likely to invest in plantations already established.
Future needs
Industry confidence and
future investment. Increased investment in eucalypts for high-value solidwood
products requires industry planning for the sustained supply of resources
on an adequate scale— specifically, a sufficient planted area managed for
solid-wood products—and adoption of the best available but inevitably capital-intensive
processing technology. There must also be evidence that long-rotation hardwood
plantations are commercially viable, with policy and investment structures
supporting investment. Returns must be equivalent to or better than those
from pulp or agriculture, either directly or with additional income from
environmental services. There must be evidence of environmentally sound
plantation management, including plantation placement within water-supply
catchments.
Investment confidence will also be increased by:
Wood quality research challenges include determining the effects of silviculture on wood quality and processing, in tandem with using the potential of novel techniques and technologies to overcome processing and drying difficulties; and proving and refining the wood quality of fast-grown plantation species. Research is also needed on harvesting and transport efficiency, and the effects of these operations on processing recovery. Encouraging the adoption of best-practice management for sawlog plantations, particularly pruning, and creating greater access to improved seed for nurseries and growers, could improve the yields from existing knowledge.
Industry coordination. The hardwood sawlog sector needs to create an all-encompassing research and industry plan, covering regional prospects (market and biophysical) and investment needs, research priorities, and the coordinated distribution of R&D activities between organisations. The adequacy of research expenditure needs to be re-examined given the final product value of hardwood sawlogs to the Australian economy, the sawlog trade deficit, the socio-economic potential to replace native-forest timbers, the value of environmental services, and the embryonic state of the industry.
Planners and policy makers must seek to include all interest groups in developing a sustainable and integrated industry, and take part in defining priority species for development—focussing on ‘best-bet’ options including durable species. The extent of the target land base for low-, medium- and highrainfall resources must be determined, considering the effects of climate change as well as the desired scale and mode of plantation development (large industrial or smaller landowner). Issues surrounding access to appropriate land—such as availability, acceptable rental, proximity to markets, and processing and transport infrastructure—must be addressed.
Promoting the sector’s prospects. The case for governments being able to achieve multiple economic and social policy objectives by investing in sawlog plantations requires strengthening. This may be best achieved by the formation of a new promotional body specific to hardwood sawlog timber plantation development. Confirmation of government commitment and plantation investment success stories will provide incentives and generate industry confidence. Policies and strategies for developing and sustaining a skilled workforce must be developed, and there is a need for increased research capacity (funds and delivery vehicles) and long-term funding specific to forestry.
Implications for stakeholders
This conference clearly
highlighted a variety of gaps in knowledge, across the supply chain, that
require attention to increase investment in high-value eucalypt plantations.
Stakeholders will need to cooperate on R&D and industry planning, and
to clearly communicate their knowledge and needs.
Researchers and policy makers need to listen to industry and to each other, and to address with urgency the challenges identified here.
Recommendations Key recommendations are:
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