'Brexit is the biggest challenge since construction crash'
Brexit is the greatest challenge to face the Irish timber industry since the collapse of the construction sector almost ten years ago. This was the main message from Bill Stanley of Coillte at the recent Teagasc Talking Timber event held in Ballyhaise College, Co Cavan.
Director of strategy and business development at Coillte and a member of the timber industry Brexit forum, Mr Stanley told an audience of forest owners that everyone on the supply chain, even small farmers with forests, will be affected by Brexit, as at present 80pc of Irish timber exports go to the UK.
"You may be thinking: 'How does it affect me, the private forest owner? I don't sell to the UK. My trees will continue growing until they're ready for clear-fell'. But there's interconnectedness in the industry. What happens in the end market affects every other node right down to the forest owner," he warned.
"Over 80pc of our sales go to five companies, and these companies have a huge role in the overall health of our industry. We need to have a healthy processing sector as that's how our product gets to the market."
The drop in sterling which occurred "overnight" following the referendum on Brexit in 2016 has had a huge impact on Irish processing companies.
"If you have a product you sold in 2015 for €100, you will now get paid €75 for it. That's a 25pc drop; meanwhile your costs stay the same. The impact on currency has been very painful for our processors," said Mr Stanley.
Leading timber processing companies echoed Mr Stanley's concerns on currency. John Kelly, timber purchaser at Laois Sawmills said that the drop in sterling has had a "huge effect".
"On the sales side of things we are doing fine. The exchange rate is having an effect, though - it's 25pc lower; 70pc of our pallets go to the UK. It's a huge problem but as long as we keep our timber moving we'll be fine. It's if it stops moving then we'll be in trouble," he said.