Mr. John Moloney:

I am pleased to outline my initial views on Coillte Teoranta and how I believe I can help with the continued development of the organisation.

When I was asked by the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, to consider the role of chairman, I was pleased to do so, and I joined the board of Coillte Teoranta in 2013. My career of more than 30 years has been spent in the agriculture and food sector in Ireland, in both the public and private sector. In many ways it has not been too far from the natural resource base on which the Coillte Teoranta business is based.

My background will give members a sense of the experience I can bring to Coillte Teoranta. The core of my career was spent in the Irish dairy industry. I joined Waterford Co-op, as it was then known in 1987, having spent the six years prior to that with the then Department of Agriculture and Food. I held a number of senior positions in the co-op, which merged to form the Avonmore Waterford Group in 1997, and I joined the board of that entity in 1998. In 2001, I became managing director of Glanbia plc. I stepped down from that position in November 2013.

I have spent a considerable amount of time in the dairy and food sector based in Ireland. As members know, 80% of dairy output is exported, so it is a significantly outward-looking industry and business. In my time in the dairy sector we have been through significant change and reorganisation, which was focused on improving the competitive position of the business and enabling it to compete in international markets and to expand internationally. Today, more than 70% of Glanbia's earnings come from international operations, and in 2012, in advance of the removal of milk quotas in Europe on 1 April 2015, we restructured the Irish milk processing operation, setting up a new entity, Glanbia Ingredients Ireland, which has now undertaken the largest investment in the history of the Irish dairy industry at Belview in south Kilkenny. It is almost across the road from the SmartPly plant owned by Coillte Teoranta.

I am a non-executive director of Glanbia Ingredients Ireland as well as DCC plc, Greencore plc and the Smurfit Kappa Group. When the Minister asked me if I would take on the role of chairman of Coillte, I saw an organisation that was consistent with my activities during my career - in other words, seeking to create added value from an Irish natural resource base that is sustainable over the longer term.

Coillte was established 25 years ago as a commercial State company and has been on a journey of change and transition from being a division of a Department and the core Civil Service to a profitable, innovative and customer-focused State company. At the core of the business is custody of 7% of the land area of Ireland, or approximately 450,000 hectares, close to 1 million acres. From this stems the core activity of commercial forestry operations, with related activities, based on the location of the land, around wind energy and telecommunications. The business has revenue of €270 million and directly employs 900 people across the country. There are approximately 600 in the forest and forestry-related businesses and about 320 in the processing businesses and the panels business, with plants at Clonmel and Belview, south Kilkenny. There is also significant indirect employment - for example, in timber haulage and harvesting services. We estimate that the indirect employment amounts to another 1,300 people.

The business sits at the upper end of the supply chain of timber to the saw-milling sector in Ireland, and much of that output is destined for export markets. The timber produced in Ireland, having gone through a processing supply chain, goes to markets across Europe. The business is also integrated, as members may know, with its own manufacturing and operations producing panel board - medium-density fibreboard at the plant in Clonmel and oriented strand board at the plant in Belview in south Kilkenny. It is important to recognise that these board mills provide an important market outlet for the first thinnings from Irish forests - that is, the first crop that is harvested in a succession of harvesting operations before the clear fell stage. More than 90% of the output of those plants is exported to over 30 countries, with Coillte panel products having sales and marketing operations in the United Kingdom and the Netherlands. These markets for pulp wood are becoming more important because there will be an increased supply of that raw material coming onto the market as the private forestry plantations that have been developed in the main by farmers in the past 20 years start to come to the first thinning stage. The wood panels are subject to an ongoing market-focused innovation programme, which has impressed me, having had an initial look at it in Coillte, as to how the panels can be adapted and the manufacturing process developed to produce solutions for low-carbon, energy-efficient buildings. The raw materials from the board mills and the logs from Coillte forests are generated from responsibly managed forests under the sustainability chain certification of the Forest Stewardship Council, FSC, an independent NGO with headquarters in Germany. This certification is recognised worldwide. In a world that is correctly focusing on energy and environmental sustainability, Coillte products and practices have never been more relevant. I know some of the executive team will follow me to discuss the impact of this in terms of land use and so on.

Apart from the commercial forestry operations and related activities, the Coillte forest estate plays a key role in enabling and supporting other activities across the economy. These include outdoor recreation, tourism, water protection, community development projects and nature and cultural heritage preservation. These impacts have been valued at close to €600 million per annum. They enable a considerable amount of rural development through tourism - for example, the mountain bike trail provided in the Ballyhoura mountains has enabled spin-off rural development initiatives around tourism. It is important to note that in recent years, visitor numbers to Coillte forests have approached 118 million per annum.

Building on the history and experience the organisation has accumulated in the 25 years since it was taken from the Department and set up as a commercial State body, the business has now set out a strategy for the next five years of sustainable value from sustainable living.

At the core of that is maximising the potential of the forest estate and transforming it into products that fit with a low carbon agenda for the future, both in structural terms and in terms of a wide range of applications across the construction and related markets. It is a question of maximising the effectiveness and efficiency of the key resources of the business, which are forests and land. In light of the long-term global trends around the environment and energy sustainability, it is clear that the markets for Coillte products, while still focusing on maximising commercial value, can deliver a rise in the enterprise value of the business to the benefit of the State as a shareholder, as well as paying dividends over the next five years.

It is right that the State expects a business performance from Coillte that is on a par with the best in the private sector and that it expects the State assets vested with us - the net asset value of Coillte's balance sheet is approximately €1.3 billion, broadly speaking - to deliver sustainable returns over time. In light of my own experience of reasonably large organisations, I hope to be able to make a contribution in supporting and challenging the management to drive the business forward. I think we can maximise the commercial performance without compromising the environmental and social dividend that Coillte delivers to society at large in Ireland.

In summary, the core demand for what we produce - high-quality wood fibre from sustainably managed forests, low carbon building products and renewable energy from wind and biomass - will grow over time. The very committed team I have met in Coillte can help the company to avail of these opportunities and take the business on over the next stage of its life. I refer particularly to the next five years, on which the next iteration of the strategic plan is focused. That concludes my statement. I thank the committee.