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GLENNON BROTHERS RESPONDS TO PARTIAL MERGER BETWEEN COILLTE AND BORD NA MONA

30th June 2014

 

Leading timber processing firm, Glennon Brothers, has grave concerns regarding the partial merger between Coillte and Bord na Mona, especially the impact the joint venture involvement in biomass, will have on the forest product sector.

Glennon Brothers welcomes the announcement by Minister for Agriculture, Food and the Marine, Simon Coveney, that Coillte will focus on its core activities in forestry. However, Glennon Brothers believes the joint venture’s plan to procure biomass from both Coillte and private sources, and use this to supply the market (including Coillte’s panel board companies and Bord na Móna’s power station), will damage the entire forest product sector.

Mike Glennon, Glennon Brothers stated, “We are very concerned that this new venture will have a negative impact on sawmillers, farmers, and private forestry growers. There is currently only two core markets for residue and pulpwood in this country, and this plan will reduce this to a single monopoly, inevitably choking the market.

While very little detail has emerged of how this new entity will operate, we are struggling to understand the logic of Coillte growing trees, to sell them to a company they half own, which then sells them back to Coillte.

80% of the logs supplied to the Irish sawmills come from Coillte. Irish sawmills currently have to purchase logs from Coillte, through a fortnightly auction system, in which the prices paid are fully transparent. However, Coillte currently sells pulpwood logs to its subsidiary, Coillte Panel Products. There is no visibility on the prices paid for these pulpwood logs and the sawmilling sector is precluded from buying these logs. This lack of transparency creates massive questions as to how any new entity would potentially operate in the market.

We would urge the government to engage with the sawmilling sector and the wider forest product sector before implementing any decisions that will impact negatively on this important sector which is worth over €2 billion annually.”

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