Page 36

Forest NSW Annual Report 2012

> Resilient Forests NSW continued to perform well despite challenging timber market conditions, a sign of a resilient business. Key organisational changes reflected the focus on core functions and improving financial performance. The timber market species licence conditions also affected supply private customers this year as productionplanting program. There were no sales tonegotiations regarding some threatened Uncertainty in overseas economies affected in certain areas. capacity at the nursery facilities was totally consumer confidence in NSW and contributed For the second consecutive year, periods of dedicated to the internal program. There were to the ongoing slump in the domestic housing exceptionally wet weather and flooding, on some good revenues from sales of elite clonal construction market. This, in conjunction with the north coast of NSW in particular, affected seed from joint venture orchards established increasing timber imports from overseas on harvesting in several of Forests NSW native in conjunction with Commonwealth Scientific the back of the appreciating Australian dollar, forest regions, significantly impacting native and Industrial Research Organisation (CSIRO) meant that demand for domestic building timber supply. As a result, Forests NSW again and private landholders. materials was down. relied on the force majeure provisions in contracts for under supply of timber against Business efficiency Planted forests As a result of these challenging timber market programsWood Supply Agreements in a number of cases.As a result of these factors, timber revenue was conditions, sawlog sales were 255 000 m3 less down by $3.1 million on budget. Once again, this A key focus for the year was implementing than expectations. was offset by expenditure restraint with operating a wide range of business improvements and The pulpwood market continued to be expenditure2 down $2.6 million on budget. organisational changes with the overriding aim buoyant with the Visy pulp mill drawing logs Implementation of the program of hardwood of improving financial performance. from Bathurst and Bombala in addition to its structural price increases was achieved for high traditional Tumut area. Sales of post harvest quality sawlogs. Further work is required to Sawlog value recovery residues to Visy commenced this year, in realise similar gains for other products. Significant progress was made during the year on addition to small dimension sawlogs that were not required by sawmills due to the timber The carbon market in-forest optimisation project was undertakenforest value recovery in softwood plantations. An market situation. in Bombala where on board computers were The New South Wales Greenhouse Gas The export log market in China diminished Reduction Scheme, a certified carbon used in harvesting machines to automate log in terms of volume and price, which led to sequestration and trading scheme, terminated making decisions based on the dimensions, the collapse of two of Forests NSW export on 30 June 2012 to make way for the new quality and location of individual trees. This customers during the year and severely Commonwealth Carbon Farming Initiative initiative has already provided significant gains in curtailed operations out of Forests NSW (CFI) on 1 July 2012. This decision had an value recovery of sawlog products and will be Walcha District as a result. impact on the NGAC market, with no NGAC extended to all plantation operations over the Overall, timber revenue1 was down $17.8 million sales for Forests NSW during the year. next 12 months (see page 49). on budgeted levels. This was offset to some At this stage, it is not possible for Forests NSW Tactical planning extent by expenditure restraint with operating carbon sequestration scheme to transition to All operations within Planted Forests were expenditure2 down $9.6 million on budget. the CFI as commercial forestry is not included processed mapped on an ‘as is’ and ‘to be’ basis in this initiative. As a result, Forests NSW does Native forests not currently have access to a carbon market, resulting in a series of process improvement initiatives centred on resource planning. Profitability targets were unable to be met this removing a significant revenue stream from This included the reorganisation of regional year due, in large part, to the combination of the business. planning structures and the augmentation of the reduced demand for building materials and the exceptionally wet conditions. Ongoing Production nurseries new planning teams successfully delivered thetechnical staff in forest resource planning. The Forests NSW production nurseries provided 2012 valuation using improved resource data 1 Excluding delivery revenue on harvest and haul. a total of 9.25 million commercial nursery and modelling tools and will now move on to 2 Excluding contract harvesting and haulage. seedlings and cuttings for the Forests NSW delivery of a detailed five-year tactical plan. 36 Forests NSW Annual Report 2011–12 Social, Environmental and Economic Performance


Forest NSW Annual Report 2012
To see the actual publication please follow the link above