UNLOCKING THE VALUE BEHIND WA’s FOREST INDUSTRY

1. UNLOCKING THE VALUE BEHIND WA’s FOREST INDUSTRY SW Timber Hub Presentation

2. WA Forest Industry Comprehensive management policies ensuring forests and plantations are sustainably managed Contributing $1.4 billion to the WA economy & creating around 6,000 jobs - more than 90% in regional WA Key driver of economic growth & jobs in Western Australia

3. WA Forest Industry Demand for timber & wood fibre is increasing, driven by • population growth • growing awareness that timber & wood based products are better for the environment There are new opportunities for value adding timber, including engineered wood products:

4. WA Forest Industry Glulam

5. WA Forest Industry LVL

6. WA Forest Industry CLT

7. WA Softwood Industry The WA softwood industry generates $617m for WA each year primarily based around the SW Timber Hub More than two thirds of direct jobs in the industry are generated in manufacturing and processing softwood which highlights the importance of hub facilities to our community

8. SW Timber Hub The SW Timber Hub is a large and successful government and industry partnership reflecting Industry contribution to the WA economy and providing sustainable quality products The Hub precinct is well placed on the Bunbury Outer Ring Road with direct access to Bunbury Port and with a catchment extending to north of Perth and into the Lower South West

9. The SW Timber Hub Key economic driver of the region Supporting more than 2,000 direct jobs Generating up to~ $1 BILLION GRP pa Connecting with manufacturers in Perth and surrounds like Wesbeam and Inglewood Timber Products Growing the SW Timber Hub - a Priority Initiative in the Bunbury Geographe Growth Plan

10. The SW Timber Hub The Hub is recognized as reflective of our industry as transformativefor the region. Initial focus has been on the softwood supply chain and Hub participants commenced a Value Stream Mapping exercise in 2018. This process identified opportunities for efficiencies, cost savings and improved value through the entire supply chain

11. Hub Current State Key issue #1: Lack of softwood resource within economic haul distance will constrain industry growth while consumer demand continues to grow. WA will become increasingly reliant on timber imports. The Hub needs the regional softwood plantation estate to double to > 80,000ha if we are to seize the opportunities for Western Australia

12. Hub Current State Key issue #2: Optimising wood value – value adding and full use of residues To optimise forest utilisation and value, and provide greater flexibility in the value chain, there is potential to establish an integrated wood products processing facility where native forest and plantation logs can be merchandised at a central facility This contemporary, integrated approach would boost forest management outcomes by reducing waste and supporting better recovery across the value chain

13. Future Opportunities We can add value to the SW Hub and its supply chain a. Growing more trees – right species in the right place to the right scale b. Ensuring we provide the right fibre to right process to lift value recovery from logs c. Developing log processing technology to locally process logs and optimize recovery of higher value products d. Ensuring full utilisation of residues from harvesting will add value and reduce re-establishment costs by 30% e. Research and invest in new high-value engineered wood products manufacturing capability within the hub

14. Key Challenges Insufficient investment in the plantation estate Increasing dependence on imported timber products Drying climate Managing all forests & plantations, ensuring healthy forests through management & utilization Providing a pathway to markets for all wood fibre & at a scale to sustainably meet forest management and future fibre demand Improving supply chain efficiencies from establishment to mill gate through further innovation, research and investment and new products