Background | Why expand plantations in Australia? | Commitment to sustainability

Why expand plantations in Australia?

Timber continues to be among the worlds most in demand resources for uses ranging from construction and furniture through to paper and packaging products.

Australians are world leaders in producing a wide range of high quality timber products from plantations, and Australia has abundant land capable of growing high quality forest plantations.

The Plantations 2020 Vision strategy has been developed in recognition of the emerging opportunities for renewable timber production. This strategy has the active support of Australia's Federal, State and Territory governments and the commercial plantation growing and wood processing industries.

Increasing demand for wood and wood products

A range of industry and market commentators undertake regular analyses of future timber markets on a domestic, regional and global basis. These analyses consistently predict a shortfall in supply of a range of timber and paper products to 2020. Continued global economic growth, particularly in the Asia-Pacific region, is a key driver for demand.

Other demand drivers include the decreased availability of tropical hardwood timber supplies due to historically unsustainable harvesting levels, and decreased supply of native softwoods from the Pacific northwest of the United States and Canada for environmental reasons.

Domestically, demand for paper and paper products is linked to general economic conditions, as growth in paper and paper products consumption approximates GDP growth. Demand for Australian export woodchips remains strong, particularly in the Japanese market, and demand for timber and reconstituted wood based panel products is closely linked to the housing construction sector.

These factors create significant domestic and international market opportunities for Australian plantation-grown timber products. Importantly, to access these market opportunities and maintain a competitive position, Australian suppliers must have access to world scale, competitive plantation resources to allow economies of scale in production to drive unit costs lower.

Investment to access market opportunities

The existing plantation forest estate has underpinned the attraction of substantial investment in the forest-based processing industries, in turn bringing employment growth to rural and regional Australia.

Australian Government Department of Agriculture, Fisheries and Forestry (DAFF) estimate total employment in the forestry sector to be approximately 78,400 jobs. Plantations supply over 70% of sawn timber produced in Australia, yet comprise less than 1% of land area.

The plantation sector has an estimated total annual output in excess of AUD 15 billion, making it the second largest manufacturing industry in the Australian economy.

In 2000-01, the value of products manufactured from timber grown in plantations was estimated at AUD6.3 billion, including AUD2.2 billion in paper and paperboard products. In addition, the value of exports of forest products manufactured from timber grown in plantations in 2000-01 was estimated at AUD1.2 billion.

Since 1997, around AUD1.5 billion has been invested in plantation establishment, and AUD1.01 billion in plantation-related processing infrastructure in the sawmilling, paper manufacturing and wood-based panel industries. These investments add substantial value to Australias natural resources, and deliver significant rural and regional employment benefits.

There is a clear imperative to maintain levels of plantation establishment for investment trends to continue.

Background | Why expand plantations in Australia? | Commitment to sustainability