Difficult trading conditions resulted in a Euros7m drop in Coillte‘s profits to Euros18.5m in 2001.
The reduction was attributed to a range of factors including sluggish demand for sawlogs, strong competition from overseas suppliers of sawn timber, a slowdown in the construction sector and lower demand for pulpwood.
Coillte’s associated company Louisiana Pacific Coillte Ireland returned to a loss-making position – Coillte’s share of these losses amounted to Euro4.4m – and its Christmas tree business also suffered.
Coillte chief executive Martin Lowery said that while the company was disappointed to see profits reduce after eight years of successive profit growth, much progress was made in 2001 that will benefit future performance.
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“The recent completion of a major investment programme by Irish sawmills underpins future demand for sawlogs” |
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Martin Lowery, chief executive |
He described the acquisition of Louisiana-Pacific‘s 65% shareholding as an important strategic move for Coillte, adding: ‘Being able to sell the group’s full pulpwood production benefits our sawlog production and forest improvement programmes.’ He said the acquisition would take Coillte into the international forest products business.
Production at the renamed SmartPly Europe Ltd has increased and market buoyancy is leading to higher sales to the US and higher prices in the UK and Europe. Medium-term prospects are good as demand for OSB in Europe is increasing at about 30% per year and the company has a strong position in key markets.
Mr Lowery is confident that Coillte’s profits will increase in 2002. ‘The recent completion of a major investment programme by Irish sawmills underpins future demand for sawlogs, new business opportunities are coming on stream and the group is capturing efficiencies throughout its businesses,’ he said.
