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Forest NSW Annual Report 2012

Overview The 2011–12 year was a significant year in the requirements of our self insurer’s licence. Planted Forest Operations also implemented the history of Forests NSW and an eventful We successfully maintained our licence. a series of process improvement initiatives one with many achievements and challenges highlighted in this report. Financial performance the accuracy of forward estimate of logcentred on resource planning, improving Corporatisation Forests NSW revenue for the year was availability.The non-commercial thinning program of$318 million, which was $9 million lower announced Sawlog revenue was affected by the ongoing in June 2012. Cypress thinning programswhite cypress in Western Region concludedthan the prior year before significant items. This year brought an historic change with decline in the domestic housing market, in the future will be on a commercial basis the Government’s decision to corporatise exacerbated by increases in timber imports where Forests NSW receives payments for the Forests NSW. Under the direction of a skilled on the strength of the appreciating Australian timber produced. commercial board, Forests NSW will be able to dollar. This, along with exceptionally wet focus sharply on its core business of growing conditions in the north coast of the State, The coastal mechanical workshops closed on and harvesting timber to meet the community’s affected harvesting in several of our native 30 September 2012. This change was driven needs for hardwood and softwood products, forest regions. by improved access to modernised facilities while protecting the environment and still We recorded an operating profit, before and services by vehicle dealers in regional providing recreational opportunities for the significant items and taxes, of $14 million NSW and to increased use of contract heavy people of NSW. for the year, which was lower than the prior plant for operations. This change to the organisation’s governance year due to reduced sales and increases in Forests NSW undertook a public tender structure is intended to provide greater plantation establishment costs and harvest process to lease its retail nursery businesses. commercial focus and flexibility. and haul expenses. Reduction in capital Three of the nurseries have so far been expenditure contributed to positive cash As a State-owned corporation, Forests NSW flows, enabling Forests NSW to pay $14 million divested with discussions continuing around will remain publicly owned. The nature of to NSW Treasury for prior year dividend and the future of the remaining three. Our two the business and business relationships will recorded $5.3 million as dividend payable for major production nurseries in Tumut and remain largely the same, although there will the year ended 30 June 2012. Grafton will be retained to grow seedlings be new opportunities to improve the business. used to establish the State’s public softwood The process of creating a new State-owned During the year, Forests NSW undertook and hardwood plantation estate. an independent valuation of its property, corporation is under way and is expected to be completed in the near future. Major new contractsplant and equipment, resulting in a netincrease in the asset base of the business. Improved safety Significant items recorded in the year Forests NSW awarded $75 million of new performance increases in superannuation obligations and grown softwood log products in the Monaroharvest and haulage contracts for plantationwere a $76 million expense resulting from leave liabilities due to actuarial assessment Region over a six-year period. The most pleasing result for the year was and change in discount rate, a $16 million improved safety of Forests NSW employees. expense from reduction in the biological asset These new contracts provide a solid There was a significant improvement in all value and a $6 million expense related to commitment by the NSW Government to key safety indicators and achievement of the revaluation impact on land and buildings. the timber industry in the region and the primary target of a 35 per cent reduction in communities that depend on this important the recordable incident rate, ending the year Key changes to the sector, providing a major boost to the local at 3.1 against a target of 3.6. economy. business Notwithstanding that the benign fire season A tender for harvesting capacity was meant that there were fewer hazardous Reflecting the focus on our core business and conducted for south coast and tablelands situations, this result is testament to the improving our financial performance, business native forests with 34 000 m3 of timber volume focus and effort of Forests NSW staff to improvements and organisational changes awarded for up to eight years, providing improve safety. continued this year. security of employment for our contractors and Forests NSW also underwent a surveillance Significant progress was made on forest their employees and certainty around investing audit by WorkCover in Hume Region as part of value recovery in softwood plantations. in new technology and equipment. 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Forest NSW Annual Report 2012
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