Growing your Forestry Investment

May 15, 2015

Growing your Forestry Investment



Forestry and forestry products are growth industries, making Commercial forestry  a shrewd investment of your land.  Demand for timber is high, with an annual value of €2.2 billion from 2010-2012.

Ireland possesses some of the most productive forests in Europe, with yields up to five times greater than northern European countries.  80% of Irish timber is exported to international markets each year.  In 2013, exports of forest products from Ireland were valued at €339 million, a 12% increase on 2012. By 2020, the annual production of timber from Ireland will be 6 million tonnes cubed.

Over 60% of the value growth in a forestry investment is biological growth, which adds continuous volume to forests. Trees will grow every year regardless of economic uncertainty, becoming more valuable as they grow from one product category to another. There are four main product categories in a tree.

Pulp/Energywood

The wood used for pulp and energy products is generally cut from the top of the tree and has a smaller diameter. Pulp and pallet wood are generally extracted during the first and second thinning stages. Pulp and energywood are the least valuable wood products.

Pulpwood has a range of uses including wall panels (OSB/MDF) and animal bedding. Ireland is the largest exporter of MDF products to the UK.

Energywood is often used to produce biomass, supporting the growing demand for sustainable fuels.  As per the Government’s Renewable Energy Action Plan , Ireland’s overall target is to achieve 16% of energy from renewable sources, including biomass, by 2020.

Stakewood

Stakewood is extracted during the first thinning and is cut from the middle section of the tree. Stakewood is used for stakes and fencing products in a variety of sectors such as construction. Demand and prices for stakewood have remained consistent in recent years with large volumes exported to the UK market each year.

Pallet wood

Pallet wood, cut from the middle section of the tree, is used for packaging, panels and gardening furniture. Pallet wood is usually produced during the first and second thinning with later thinning generating higher volumes.

Pallet wood provides a stable forestry income and is much sought after by sawmills in Ireland and the UK.  In 2011, 87% of the wood-based panels manufactured in Ireland were exported with a value of €174 million.

Sawlog

Sawlog is taken from the lower section of the log, and is generally extracted during later thinning and clear-fell stages. Sawlog is the most profitable wood product due to widespread usage in the construction industry.

Further wood products include sawdust (wood-pellets); bark (garden mulch), and wood-shavings (animal bedding). Additionally, forests attract over 18 million visitors annually, generating €268 million in economic activities for rural communities.

Working with a FEL Forester to manage your plantation, including thinning, can help to increase the yield and profitability of forestry assets. For more information on forestry management and investment, call FEL on 1800 719 399 or email info@nullfel.ie to arrange a meeting.