Vol. 518 No. 6
62 Mr. Bell asked the Minister for the Marine and Natural Resources if he will make a statement on the Government's proposals for the future development of Coillte Teoranta in view of the findings of the recent consultants' report on the corporate development of the company. [12912/00].
As the Deputy is aware. the report of the consultancy study carried out by AIB Capital Markets and Merrill Lynch to assess the options for the corporate development of Coillte Teoranta was published last month and a copy has been made available to each Member of the House. The main conclusions of the consultants' report are as follows. Until the challenges facing the sector have been resolved, a change in the ownership structure of Coillte Teoranta should not be considered. Various options outlined, including outright or partial sale and IPO, are regarded by the consultants as realistic options for consideration in the longer term, if their recommendations are successfully implemented. Certain elements of the strategic plan for forestry – in particular the need to achieve planting targets – need to be continuously and closely monitored. A considerable increase in sawmilling processing capacity, or increased use of existing capacity, will be required to absorb the growing volume of sawlog. In addition, new markets must be developed for the increasing volumes of sawn wood coming on stream.
The consultants made a number of recommendations under various headings, namely, development programme, revised strategic plan-efficiency programme, marketing, ownership, afforestation, reforestation, sustainable forest management, Coillte Teoranta enterprises, and dividends.
I have circulated the report widely to the various sectoral interests, including of course Coillte Teoranta, for their comments. I will listen carefully to the views of all stakeholders. When this consultative process is completed I will develop a strategy to enable Coillte Teoranta to maximise its opportunities and move forward in building on its existing strengths.
The main elements of the report were publicised by the Minister on Wednesday, 19 April. The consultants, as he rightly pointed out, did not say it should not be privatised but rather that it should be deferred for five years. That is my reading of the statement issued by the Minister in accordance with the report. Does that mean that the Government's policy now is that, in view of the consultants' report, the privatisation of this most important national forestry resource will be deferred, scrapped or re-examined at the end of the five years?
There will be no change for the five year period of the policy that Coillte Teoranta should remain a State enterprise. If many of the recommendations in the report are implemented and Coillte Teoranta is able to develop in the way set out in the report – and I have further thoughts on how I would like to see it develop – and becomes a strong enough company to be considered for privatisation in five years time, the Government will consider that. However, there is no hard and fast position on what will happen in five years time. It will depend on what happens in the interim.
In the Minister's consultations with the board of Coillte Teoranta, has it indicated to him its opposition to the whole question of privatisation? Does he agree that, in view of the consultants' report, privatisation would not be in the best interests of the State, the farming community and all who have invested in this important indus try? Can he confirm the board is opposed to it? I am glad he has stated it will be put on the back burner for at least another five years. We will oppose it then, at which time we will be back in Government.
I have not discussed the matter with the board since the report was published, which is why I have asked it to respond to the report. At that stage we will have discussions with the board and senior management. I think everybody is of the view it would not be appropriate for Coillte Teoranta to be privatised at this time. The company is not ready for that to be even considered. Coillte Teoranta and the timber industry have very significant development potential. The next five years can bring about very significant development. However, there must be changes and a great increase in many aspects of the industry. I am looking forward to working closely with the board of Coillte Teoranta and the industry to try to realise its development potential.
In view of the recommendation in the report in relation to new markets, particularly the UK, what steps has the Department taken to assist the development of markets, particularly in regard to our nearest neighbour, the UK?
The board of Coillte Teoranta is examining possibilities for entry into the UK market. The Department has encouraged the board and senior management to pursue those possibilities and will be very supportive of its efforts to get a foothold in the UK market. Coillte Teoranta is anxious to increase the export of timber and timber products to the UK and we are anxious to assist it in that respect.
We are also anxious to encourage Coillte Teoranta and the industry to increase sawmilling capacity. Coillte Teoranta and the Department are encouraging the private sector sawmilling industry to increase capacity considerably. As the Deputy knows, there is a serious shortfall in the industry's capacity to deal with the saw log product that is coming on stream, which is holding back the industry.
