The forestry industry in northern Australia has the potential to triple its output to A$300 million ($196 million; €181 million) per year within the next 5-10 years, according to a new study.
Research published by the Cooperative Research Centre for Developing Northern Australia, in conjunction with industry partners, identified that the sector currently has an annual production value of around A$80 million.
“With the right R&D and policy settings, we could easily treble that value over the next five to 10 years,” said Mick Stephens, CEO of Timber Queensland, the lead industry partner for the research.
“The industry in northern Australia is at a pivotal point as a lot of the existing plantations are only now approaching harvest age with sale into market. We need to look at downstream processing and value-add opportunities, as well as expanding that plantation base by linking with things like carbon credits.”
Stephens said the industry has until now been focused on establishing underlying plantations of around 100,000 hectares in African Mahogany, Indian sandalwood and Acacia, which are now approaching maturity.
As a result, further investment will be needed in processing capabilities to realize the full value of these assets, he said.
The research acknowledged that developing new forestry plantations comes with long lead-in times before investors can see returns, which acts as a barrier to investment for many.
Among the report’s six recommendations was a desire to carry out further assessments of silvopastoral opportunities, where forestry assets are integrated with livestock production, which could help unlock new investment.
“Forestry is a long-term investment, so to combine that with something that can give you a return in year one is something that ought to attract investors,” said Jed Matz, CEO of the CRCNA.
“[It means] you don’t just have to look at the 20-25 year outlook that you would normally have to with forestry. When you can get those synergies, combining industries to add value, it can be a key way of driving improvements in GDP and creating jobs.”
The research also called for the creation of a new industry and cross-jurisdictional alliance that can help further the development of the industry in the region. Partners to the research including Forest Products Commission Western Australia, Plantation Management Partners, Midway, HQPlantations, Ravenshoe Timber, DTM Timber/Branch 95, Quintis and Alpha Santanol, have already established an ‘industry development alliance’ which includes several relevant state departments, industry bodies and research providers.
“It’s important to have good governance structures,” Matz said. “The recommendation to form the cross-jurisdictional alliance is key because that gives you the vehicle to deliver on the other recommendations.”
The development of indigenous-owned forestry also presents a significant opportunity, with 73 percent of the forests in northern Australia under indigenous ownership or management.
“The opportunity for indigenous forestry development is really clear, as the communities there have been looking for industries they can develop on their own land,” Matz said.
Other opportunities identified include the development of more certain long-term wood supply agreements for the use of crown leasehold lands and the further development of the sandalwood industry.
The six actions recommended by the study to support the development of the sector in northern Australia were:
- Build on the newly formed industry and cross-jurisdictional agency alliance to promote forest sector development across northern Australia.
- Promote indigenous forestry development through better engagement models and commercial arrangements between industry and indigenous landowners, and build indigenous forestry capacity and understanding of commercial forest resources, including forest resource inventory.
- Develop secure access arrangements for supply from crown native forest land (ie, leasehold) in northern Queensland.
- Develop a market research study into the potential supply and demand for wood products from northern Australia, including key markets and supply chain needs (ie, regional infrastructure).
- Assess silvopastoral opportunities (ie, integrated forestry and livestock production) as a vehicle for new commercial tree plantings.
- Review Emissions Reduction Fund barriers to carbon market access for forestry activities, with priority on the ‘water rule’ requirement for new plantations.