Chairman’s opening remarks to Joint Oireachtas Committee on Agriculture, Food and the Marine

Thursday 3rd April 2014

Chairman, Members of the Committee, Deputies and Senators, ladies and gentlemen,

I am pleased to be here with you today to outline my initial views on Coillte and how I believe I can help with the continued development of the organization. At the outset I should say that I was pleased to accept the role of Chairman when asked to undertake it by Minister Simon Coveney. I joined the Board in October 2013.

My own career to-date has been entirely spent in the Agriculture and Food sector with over 30 years in both the public and private sectors. So not too far from the Irish natural resource base on which Coillte is built.

I joined Waterford Co-Op, as it was then, in 1987 having spent the previous 6 years with the Department of Agriculture and Food. I held a number of senior positions in that business and joined the Board of merged Avonmore-Waterford Group in 1998. I became Group managing Director of the Group, re-named as Glanbia in 2001. I stepped down from that position in November 2013.

In my time in the dairy sector we have been through significant change and re-organisation, all focused on improving the competitive position of the business and enabling it to compete on international markets and significant overseas expansion. Today over 70% of Glanbia’s earnings come from international operations. In 2012 we also re-structured the Irish milk processing operations setting up a new entity Glanbia Ingredients Ireland which is now undertaking the largest investment in the history of the Irish dairy industry at Belview in South Kilkenny.

I am a non-executive director of Glanbia Ingredients Ireland as well as DCC plc, Greencore plc and Smurfit Kappa Group.

When Minister Coveney asked me to take on the role of Chairman of Coillte I saw an organization with activities consistent with my own career i.e. creating value add from an Irish natural resource base that is sustainable over the long term.

Coillte was established as a commercial state company 25 years ago and has been on a journey of change and transition from being a Division of a government department to a profitable innovative and customer focused State Company.

At the core of the business is custody of 7% of the land area of Ireland or approximately 445,000 hectares (close to 1million acres) from this stems the core activity of commercial forestry operations with related land/location based activities in Wind Energy and Telecoms.

The business has revenues of €270m and employs directly 900 people across the country. There is also significant indirect employment supported in for example timber haulage and harvesting services. The business also sits at the upstream end of a timber supply chain delivering raw materials to Irelands saw milling sector with much of that output destined for export markets.

Coillte is also integrated with it’s own manufacturing operations producing panel board at mills in Clonmel and at Belview in South Kilkenny. These Board mills provide an important market outlet for first thinnings from Irish forests. Over 90% of the output from the plants is exported to over 30 countries with Coillte Panel Products having Sales and Marketing operations in the UK and the Netherlands. These pulp wood market outlets will be, I believe, more important into the future as increased raw material becomes available from the private plantations established in Ireland over the past 20 years.

The wood panels produced are subject to an ongoing market focused innovation programme with applications in low carbon energy efficient buildings.

The raw materials for the Board mills and the logs from Coillte Forests are generated from responsibly managed forests under the FSC sustainability certification which is recognized world wide. Accordingly in a world which is rightly focusing on energy and environmental sustainability, Coillte products and practices were never more relevant.

Apart from the commercial forestry operations and related activities the Coillte forest estate plays a key role in enabling and supporting other activities across the economy. These include outdoor recreation, tourism, water protection, community development projects, and nature and cultural heritage preservation. This impacts have been valued at close to €600m per annum to Ireland.

Over recent years visitor numbers to Coillte Forests have approached 18m per annum.

Building on the history of the organization and the experiences of the past 25 years the business has set out a clear strategy for the next 5 years : ‘Sustainable Value from Sustainable Living”.

This focuses on maximizing the effective and efficient use of it’s key resources ; Forests and Land. Given that long term global trends support the nature of the markets for Coillte products then I believe with a clear focus on maximizing commercial value Coillte can deliver an increase in enterprise value of the business as well as dividends paid to the shareholder over the next 5 years.

I believe it is correct that the State expect a business performance from Coillte on a par with the best in the private sector and that the State assets vested with us deliver sustainable returns over time. Given my own experiences, this is where I hope to make a contribution, in supporting and challenging management in driving the business forward.

In maximizing commercial performance I believe we can do this with out compromising the environmental and social dividend that Coillte delivers.

In summary the core demand for what we can produce will grow over time i.e. high quality wood fibre from sustainably managed forests, low carbon building products, renewable energy from wind and biomass.

These market opportunities coupled with committed teams at all levels in the organization make this an exciting stage in the growth and development of Coillte and I look forward to helping to support that.

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