Acting General Manager's report
As outlined in the Chairman’s Report, there has been a confluence of factors that have created a difficult operating environment for the Forest Products Commission (FPC).
During 2009/10 difficult conditions for some of FPC’s customers saw the closure of two major processing plants in Western Australia which impacted negatively on revenue.
In the mature softwood plantations business, recovery from the Varanus Island gas shutdown, the wildfires and the GFC has been slow although by the end of 2009/10, production had returned to previous levels for some of FPC’s main customers.
Following the GFC, the recovery of the South West hardwood sawmill industry is still progressing. The GFC brought to a head a number of adverse trends which have resulted in higher costs of production for the end product, as well as the decline of some markets. The FPC has sought to play its part in improving the financial viability of the native forest industry, including exploring options for new products and investment by which more of the available timber resource can be utilised.
The Sandalwood business has met expectations in 2009/10 and, with new international customers entering the market, there are positive pressures on prices.
The change in government policy has provided much
needed clarity for staff and customers on the role of the
Commission and its focus in the future. A decision was
made in early 2010 by the government for FPC to exit from
its sharefarm activities. A new structure and a sharefarm
exit strategy have been developed and implementation is
anticipated to commence in the coming year.
The Forest Products Commission will focus on its core
business activities in the areas of native timber, plantation
pine and wild sandalwood. A business manager will be
appointed to each of the business units to ensure that
they retain their focus on customer service and related
commercial priorities.
In order to reduce the cost of overheads and corporate
services, FPC will be hosted by the Department of
Agriculture and Food. The Rivervale head office will be
relocating to the Department of Agriculture and Food’s
Headquarters in South Perth and offices in country
locations will co-locate where appropriate.
In another significant move the science and industry development unit will be transferred to the Department of Agriculture and Food where there will be synergies from a close working relationship with a large primary production research organisation. This unit will provide a service to the industry as a whole with FPC purchasing science services as required.
I recognise that this has been a very difficult period for staff. In my short time with FPC, I have been impressed by the high level skills, knowledge and commitment of staff. This augers well for the future of the organisation as the change we are embarking on can only be successfully achieved with the commitment of skilled staff. I would like to thank all staff for their patience and support and to assure everyone that the changes, both financial and operational, will create a more resilient and robust organisation.
David Hartley
Acting General Manager
