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The Private Native Forest and Plantation Resource of the NSW North Coast (Cont.)

APPENDIX 1
Executive Summary North Coast Forest and Plantation Resource Study, 1994

This report presents the findings of the North Coast Forest and Plantation Resource Study. The Study was commissioned by the Northern Rivers Regional Development Board, and carried out by Northern New South Wales Forestry Services with the assistance of Boambee Forestry Services.

The study covered an area extending in the south from Port Macquarie and Walcha north to the New South Wales/Queensland border. This area was stratified into two zones, an inner zone within 100 kilometre of Grafton, and an outer zone between the inner zone and the boundary of the study area, broadly translating to 250 kilometres by road from Grafton. Within these zones the study aimed to determine:-

the area of productive private hardwood forest being managed, amongst other uses, for timber production, and the potential yields that might be expected from these forest areas, taking into account species types and site quality;
an estimate of potential private land area available for the establishment of hardwood plantations, and potential yields, profitability and likely stumpages;
an estimate of the volume of un-committed sawmill residues;
constraints or impediments to private forestry that may in future limit productivity from existing native forests or impede the establishment and management of plantations, including thinning and clear falling operations.

The net productive private forest area, or area over which forest harvesting practices might occur, totals approximately 465,000 hectares, being 280,000 hectares within the 100 kilometre zone and 185,000 hectares within the outer zone.

After taking into account forest types and basic site quality criteria, and determining indicative growth rates, the total potential annual hardwood yield for private forests in the study area was estimated at 1,064,000 cubic metres, or 628,000 cubic metres from the 100 kilometre zone and 436,000 cubic metres from the outer zone.

These yields were further divided into two categories:- pulpwood, and sawlogs, veneer logs, poles, piles and girders. Pulpwood, being logs and material not suitable for sawn timber, veneer or pole, pile and girder production, was estimated at 588,000 cubic metres. Of this volume, 352,000 cubic metres were estimated to be available from the 100 kilometre zone and 236,000 cubic metres from the outer zone. Pulpwood includes material not only suitable for paper manufacture, but also for the manufacture of reconstituted wood products such as fibreboard and hardboard.

The estimated total potential yield of sawlogs, veneer logs, salvage logs and poles, piles and girders was 476,000 cubic metres, made up of 276,000 cubic metres from the 100 kilometre zone and 200,000 cubic metres from the outer zone.

This yield was further broken down by product, with small and large sawlogs totalling 286,000 cubic metres (166,000 and 120,000 cubic metres respectively), salvage logs 71,000 cubic metres (41,000 and 30,000), veneer 71,000 cubic metres (41,000 and 30,000) and poles, piles and girders 48,000 cubic metres (28,000 and 20,000).

The history of plantation establishment on the north coast was briefly addressed, including yield data that is available for plantations within the study area. The study broadly mapped the area of private land that, on the basis of climate and soils, would potentially be the most suitable hardwood plantations.

During the course of the study private landowners expressed interest in the establishment of approximately 3,800 hectares of private plantations. Not all of this area would be considered ideal in terms of potential for fast growing plantations, however in excess of 50% lies within the area that fits the criteria for successful establishment.

As at 9th November, 1994, State Forests of New South Wales, through their Joint Venture Hardwood Plantation Program, are negotiating the establishment of approximately 1,800 hectares, 20% of which was identified by the study. Details of all landowners who expressed an interest in the Joint Venture program through this study have been passed on to State Forests for follow up.

The study looked at the internal rate of return (IRR) that could be expected for different plantation scenarios within the study area. The IRR is the rate of return on the plantation project that the investor can expect to receive. It does not take into account the cost of the funds invested nor the project risk. The study concludes that the IRR is most impacted upon by such factors as growth rate and yield (and hence site quality and soils), and initial establishment costs, particularly land prices. It was found for example that highly suitable land with optimum conditions for establishment and growth also carries a very high per hectare purchase value. An investor might be attracted to the quality of the land for plantations but the high cost of establishment can result in an unacceptably low IRR despite the predicted fast growth rates.

The study determined that there is a total of approximately 90,000 tonnes of sawmill residues from private property log sources not currently committed to markets. Only a small percentage of the 271 licensed sawmills in the study area have wood chipping facilities. Should domestic markets for woodchip eventuate within the study area, considerable efficiencies in the utilisation of sawmill waste and small pulpwood logs could be achieved through the location of decentralised chipping facilities at a number of regional centres.

The study also investigated the range of regulatory and legislative measures at all Government levels that are having an impact on private forest management, including the potential for plantation establishment. Many of the controls on private forestry are having a negative impact and the situation should be addressed at all levels of Government.

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