Power Equipment Australasia

Plantations have become an increasingly important source of logs in Australia. Source: ABARES (2019) https://www.agriculture.gov.au/abares/products/insights/ snapshot-of-australias-forest-industry#daff-page-main Forestry and logging firms derive most of their revenue from selling logs to downstream timber processors. These markets are mostly made up of sawmills, timber resawing and dressing companies, and wood chipping companies. Most softwood sawlogs harvested in Australia are processed domestically to produce sawn wood for residential construction and furniture manufacturing. Some sawlogs are exported for processing overseas. A byproduct of softwood plantations is woodchips for use in paper and wood-based panel production overseas. This byproduct comes from lower grade logs and as a by-product of tree thinning and final harvest operations. VOLUME OF LOGS HARVESTED BY FOREST TYPE AND END USE, 2017–18 Source: ABARES (2019); ABARES GVP survey (unpublished) Most plantation hardwood is destined for pulplog production, with forest stands being cycled in half the time, every 10 to 15 years. Almost all (95%) of hardwood is exported whole or as woodchips. Native forests, harvested less frequently, often face conservation pressures. Additionally, Australia's status as a net importer of timber products underscores the need for enhancing value-added production domestically. Australia is a net importer of timber products. Australian firms produce and export packaging and newsprint paper products while we import household and sanitary paper, and printing and writing products. Exports are just under $4 billion while imports have increased to almost $6 billion, the increase attributed to items including builders’ carpentry and mouldings. VALUE OF TRADE IN ALL FOREST AND WOOD PRODUCTS, 2012–13 TO 2017–18 Source: ABARES (2019) Logging and forestry firms are in areas that have high and reliable rainfall. These conditions mean there is a high density of enterprises in New South Wales, Queensland, Victoria, Tasmania and south-west Western Australia. Plantations are a long-term investment. If a plantation takes two years in planning, and 25 to 30 years from planting to harvest, then investors need to estimate where the demand for timber will be in thirty years if they are to minimize transport costs and secure profitability. Key downstream timber products can be substituted with products made from alternative materials like steel, plastic, glass, fiberglass, glass, and concrete. Timber house frames can be replaced with steel, and patio decking, wooden furniture and fittings can be substituted with plastic. The processing segments are becoming increasingly concentrated. Like many other industries, processing capacity is becoming increasingly concentrated in the hands of fewer players. This is particularly true of the softwood milling segment. Hardwood mills are traditionally more diverse and smaller, as they service diverse native forests. The increasing use of plantations has driven, in part, the softwood concentration. OPINION 16 | POWER EQUIPMENT AUSTRALASIA | MARCH - APRIL 2024

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