The future’s looking bright
PREDICTING THE future is definitely a fool’s errand. More so, given the recent track record of learned pundits who have failed to predict everything from oil prices to exchange rates to US election results.
So, it is with some trepidation that I consign myself to this discredited ship of fools.
That said, it is my prediction that 2016 will be viewed in hindsight as one of the pivotal years in the development of Australia’s future forest and wood products sector.
Now many of you may see this as a ludicrous claim. As a general rule, it is nearly impossible to generalise about the sector given its geographical and product diversity. For some, the year may have been better than prior years; and for others, it may have been worse or just the same.
In terms of economic or commercial measures, the aggregate statistics show that there has been a significant lift in output and turnover for the sector helped by favourable exchange rates and strong domestic and export demand – this doesn’t mean that the gains have been shared equally and some segments and individual companies continue to do it hard.
However, the pivotal legacy is not because of the improved trading conditions but due to the ‘seeds’ that have been sown that will hopefully bear fruit in the future.
Seeds were sown
It would be poetic, but technically incorrect, to suggest that all the ‘seeds’ were sown in the last 12 months. In reality, many have been years in the making.
The following is a personal list of things that happened in 2016 that I think (or hope) will make 2016 of historic importance and they are presented in no particular order:
The report by the Forest Industry Advisory Council (FIAC) titled “Transforming Australia’s Forest Products Industry”
The first federal election in over 20 years where forestry was not a major political issue
The change to National Construction Code to make it easier to use lightweight and massive timber construction in multi-residential, hotels/motels and offices up to 25 metres in height
The commitment by governments and industry to provide additional funds to research and extension through a number of separate initiatives
The report by E&Y titled: “Megatrends and the Australian Forest and Wood Products Sector”
The announcement by the Western Australian government to provide funds to allow for softwood plantation establishment
The construction by Lend Lease and Strong Build of pioneering midrise timber buildings in Sydney and by Morgan and Hansen in Adelaide
The willingness of local and State governments to consider wood encouragement policies, often at the urging of Planet Ark
The announcement and/ or commissioning of domestic manufacturing capacity in crosslaminated timber.
Each of the above activities share a common theme: they are all about investing in the future and point towards a much brighter future for the sector.
In my own sphere of activity, I have heard a lot of lamenting over the last six to eight years about the good old days when the sector was ruled by government agencies (and their cohort of professional foresters) and the domestic industry was protected by tariff barriers. While protectionism may be in resurgence, I doubt that we can fully return to the past.
The industry that will lead us into the future is largely private owned (with a high proportion of foreign ownership) and sees both opportunities and threats with an international perspective.
One of the biggest challenges facing the sector is that our resource base and manufacturing capacity is dispersed and in most cases lacks international economies of scale. Companies can compete internationally through better service and market knowledge, but a critical mass of resource in key regions can only improve the sector’s international competitiveness.
As the FIAC paper succinctly puts it: we need to have the right trees in the right place at the right scale.
Investment across a broad front
This will require investment across a broad front of activities from more intensive silvicultural management of private and publicly-owned native forests to plantation expansion. The private landholder will play a key role in this investment and the industry needs to consider a range of mechanisms to provide confidence to landholders that commercial forestry is a worthwhile venture.
The wood processing industry will also need to consider some fundamental changes particularly when it comes to log size and variability, which may see a shift to more reconstituted and engineered products.
Since joining FWPA in 2008, I have been part of the sector’s roller coaster ride with the last of the halcyon days of managed investment schemes, their subsequent collapse and dismemberment, the privatisation of State-owned assets and the massive reduction in research capacity that was focussed on commercial forestry and wood products. Certainly a grim picture, but restructuring is never pretty.
During this period, FWPA has remained steadfastly focused on its role in growing the market for sustainably sourced wood products (both domestic and imported) and delivering valued services to the industry and government. Our scope has broadened to include marketing, standards and codes and industry statistics.
FWPA’s investments have underpinned some of the activities that define 2016 as a pivotal year. Our partnership with Planet Ark and consumer advertising featuring Peter Maddison from Grand Designs Australia have irrefutably changed the market perception and acceptance of wood. Our WoodSolutions program is now the world’s most visited wood promotion website and our change to the National Construction Code will drive a fundamental change in midrise construction. Less prominent, but equally important, our investment in research and statistics will give industry tools to improve their competitiveness.
As stated earlier, the future is very difficult to predict and human development never moves in clear straight lines. There will always be volatility and we will continually be surprised by unforeseen events, but I am extremely confident that there is a strong and expanding future for the Australian forest sector.
To reinterpret Sir Winston Churchill’s famous quote:
Now this is not yet the future. It is not even the end of the past. But it is, perhaps, the beginning of the future.