Expansion of production capacity over a number of years has brought about overcapacity in the sawmilling industry putting pressure on limited supplies of logs and forcing log prices up. In addition, the sector is currently experiencing problems due to very competitive timber pricing on the Irish market, a sluggish UK market with increased imports from Eastern Europe and a fall-off in demand for and prices of sawmill residues. My Department is in ongoing consultation with the Department of Agriculture, Food and Forestry in relation to issues of concern to the forestry and downstream processing sectors. The issue of log supply and pricing has been the subject of discussions between all the parties concerned.
A framework for a new timber sales regime has been drawn up to address this issue. This framework was agreed between Coillte and the Irish Timber Council in March 1996. Since then various meetings have taken place to have the new system agreed by the end of 1996. I understand that satisfactory progress is being made in this regard. The problems outlined above have contributed to the recent redundancies in the sector. I am advised, however, that no significant investment has taken place in the mills in question over the past ten years and that even in the event of lower log prices and an improvement in market conditions it is unlikely that these mills could survive in the long term without significant investment. The Deputy may be assured that I and my Department will continue to monitor developments in the sector in consultation with the Department of Agriculture, Food and Forestry where appropriate. Forbairt will continue to provide assistance to sawmills for research and the development of new products and added value activities.
