The proposed sale of the right to harvest trees in State-owned forests could cost 2,500 jobs and close the Republic’s sawmilling industry, a new report claims.

Government agency New Era is due to report to Minister for Agriculture Simon Coveney next month on the proposed sale of the right to harvest trees in forests owned by State company Coillte.

Asset disposals

The sale, which it is estimated could raise between €400 million and €600 million, is part of a programme of State-owned asset disposals proposed by the Government a year ago in a bid to raise a total of €3 billion.

Yesterday, the Irish Timber Council, which represents the sawmill industry, published a report which warns that the move could force the closure of the Republic’s 10 sawmills, with the loss of 2,500 jobs in mainly rural areas.

Raw material

Coillte supplies 80 per cent of the logs milled by the organisation’s members. Its chairman, Pat Glennon, explained yesterday that it believes there is a risk that a buyer could choose to export the bulk of the harvest, leaving the mills with almost no raw material.

Alternatively, a buyer could choose to drive up prices by withholding or controlling supply, particularly as they would have no commercial imperative to supply the mills at regular intervals, which Coillte does.

“There is no room for sawmill operators to absorb any level of price increase and the consequence is that sawmills could close with important employment being lost in rural areas,” Mr Glennon said.

The Minister has suggested any deal would involve some level of guarantee for the sawmills. However, Peter Brennan, managing director of EPS Consulting, which produced the report, said this could depress the price at which the trees could be sold.