Chairman's report

The Forest Products Commission continues to manage a number of initiatives to achieve an “environmentally sustainable and commercially viable forest products industry providing economic and social benefits to the people of Western Australia”.

On a positive note, the Commission continued a significant planting program during 2008 which saw the conclusion of plantings as part of the Strategic Tree Farming initiative, targeting salinity and environmental outcomes. Through this program the Commission has planted 18,000 hectares of sharefarms over five years.

The Commission is developing expertise in carbon sequestration markets with a significant planting program during winter 2009, following the signing of a carbon offset project with Synergy. The Commission has built a bank of globally-recognised experience in carbon sequestration over a number of years, signing its first program with BP Kwinana Refinery in 1998.

Also related to expanding carbon markets, the Commission began supplying logging residues from plantations to an Albany-based pellet manufacturer. The pellets are destined for export to Europe for use in electricity generation.

The Commission, along with forest industries, communities and Government is collaborating on options to enhance the long-term viability of wood supply from South West forests to industry.

Productive outcomes from this work are expected by the end of 2009.

Financially, the past 12 months has been a challenging time for the Commission and its customers. Revenue decline has been experienced across all sectors, including native and arid forests and plantation timbers.

The impacts of the Varanus Island gas explosion on the Commission’s customers followed by the effects of the global financial crisis resulted in depressed timber markets and lower revenues for the 2008/09 financial year.

The Commission incurred costs from three major bushfires in plantations north of Perth and in the South West and these also had an adverse affect on revenue.

In the interests of the State, the Commission ‘stood aside’ from complying fully with its contractual obligations, allowing for burnt timber from private plantations to be processed first before it lost all its value and could no longer be utilised.

The State Government contributed $15million in equity to assist the Commission in managing the costs of the wildfires and the impact of gas shortages caused by the Varanus Island gas explosion.

The incipient moves to establish a national sequestration trading scheme has the potential to be of significance for Western Australia and is expected to render assistance with further developing the forestry industry.

During the year, the Board and Senior Executive reviewed its major strategic objectives in the context of both challenges in traditional wood and timber markets and potential growth opportunities in various derivative wood products. The Commission is continually looking at maximising the revenue derived from all parts of the forest resource to ensure a sustainable industry in which all forestry values are recognised and counted, including timber, energy, carbon, environmental and social values.

The year saw further movement in the Board of the Commission. Chairman David Taylor retired at the end of his term on 30 June 2009 and did not seek re-appointment as he had relocated to the eastern states for family reasons.

On behalf of the Board and all staff of the FPC, I would like to thank David for his leadership over the past three years during a time of further growth of the Commission.

The end of July 2009 saw the terms of Ray Curo and Nick Oaks come to a close after nine years on the FPC Board. Both Ray and Nick were inaugural members of the first Board and their contribution and assistance to the Commission over that period
has been significant and greatly valued by all their colleagues and staff. I would like to thank them for their wise and considerable deliberations. I would also like to welcome Karen Gadsby as a new member of the Board.

I would like to thank all Senior Executive and Commissioners for their contribution during the year. Dr Paul Biggs has again shown outstanding leadership as General Manager of the organisation. Finally, on behalf of the Board, Management and staff of the Commission I would like to record our appreciation of the support received from both Ministers over the financial year, Hon Terry Redman MLA and Hon Kim Chance MLC (retired). We are grateful to have their constructive and invaluable advice to assist us in progressing the aims of the Commission and forestry in Western Australia.

Eva Skira
Chair