Accordingly over the past year we have maintained our certification to the Environmental Management Standard ISO 14001, upgraded our quality certification to ISO 9001:2000, are now well advanced on meeting the requirements of the Interim Australian Forest Standard and are looking to upgrade the current Work Cover standard achievement to meet the prerequisites of the OHS&W standard AS 4801 in the near future. This will indicate to our customers and other interested parties that we are best practice in terms of quality management, environmental systems, occupational, health safety and welfare, and sustainable forest management. We have also been recognised as having one of the best procurement practices in the State Government, being awarded State Supply Board Procurement accreditation level 3a in July 2003.

Financial performance over the past year has again exceeded budget expectations due to strong sales sustained by investment in the housing sector that lasted longer than anticipated. This performance builds on the above budget performances of 2001-2002 and 2002-2003 when funds were accumulated enabling special dividends to be paid. A special dividend of $0.92M was paid in the 2003-2004 financial year reflecting the above average budget performance during 2002-2003.

During the year the Board applied itself to a review of the harvest level from the forest resource. A new level of cut of 850 000 cubic metres of sawlog per year has been agreed from July 2005. This coincides with the end of a decade of accelerated cutting, aimed at reducing growing stock and the target rotation age to 37 years. It is pleasing that the level of cut can be maintained at a level which exceeds that set at the beginning of the 10 year period of accelerated harvest. This outcome reflects good silvicultural practice, improved genetics and effective containment of fires over the past decade.

In 2003-2004 the Board formally approved the arrangements to several customers, particularly in the Ranges Region, that extend supply terms and conditions. The agreements will see a better return for the Ranges Region and will also allow for the redevelopment of non-performing plantations areas (in particular the Pinus pinaster plantations). The Board has also continued to formalise, as longer-term arrangements, supplies for products such as preservation log used in fencing materials. Additionally a number of service contracts were let to ensure that ForestrySA continues to meet supply arrangements and other environmental and safety expectations with its customers and the community. Cabinet approved chipping contracts to the value of $11M (over 5 years); this will allow ForestrySA to meet its obligations under new woodchip supply arrangements.

During the year ForestrySA purchased 55.6 hectares of land for plantation development and continues to actively seek suitable land to expand the plantation estate.

Protection of the forest resource remains a high priority and ForestrySA continues to develop the fire truck fleet with the arrival of the first FireKing fire truck and the commencement of demobilising the RFW tanker fleet. The design excellence of the FireKing in terms of the capacity and its safety features as a bushfire management vehicle have been recognised and appreciated by our fire crews. The balance of the FireKings will be delivered over the next 18 months.

The Board continues to meet both better environmental demands as well as financial returns. The burning of plantation residues continues to be a risk management issue and an opportunity for marketing. New markets have been established for some residue products thereby reducing the amount of burning required. Work has continued to examine market options for the sale of additional residues allowing ForestrySA to reduce the risk and community concerns arising from smoke management. In some native forest areas, as part of the implementation of Native Forest Management Plans, prescribed burns are conducted to maintain a range of ecological succession stages and to reduce the risk of major biodiversity loss due to wildfire. Seasonal conditions however have impacted on the 2003-2004 program, with the area prescribed burnt below planned levels.

To enhance the biodiversity of the South East Region, ForestrySA has progressed a long-term strategy to establish biodiversity corridors linking Native Forest Reserves. This program has been successful in attracting Natural Heritage Trust funding through the South East Natural Resources Consultative Committee and will enable partnerships with landowners and the community to be developed. Statewide, a major program for pine regeneration removal from Native Forest Reserves to enhance their biodiversity value is almost complete. Over the past seven years some 9,900 hectares have been treated with the result that future control requirements will be significantly reduced.

In the Mount Lofty Ranges, the partnership with the South Para Biodiversity Project and the Northern Adelaide and Barossa Catchment Water Management Board for the Mt Crawford Waterholes Project has enabled substantial revegetation works to be undertaken. This project is helping to conserve the biodiversity associated with an important riparian zone and incorporates both educational and recreational opportunities.

The past year has also seen the commencement of a plan to refresh the human resources structure with changed functions and the recruitment of staff with additional skills. During the year a new Director Human Resources and Business Analyst have been recruited at the senior level. The Minister also appointed two new Board Members to replace Mr Warren Wilson and Mr David McLeod who completed their terms at 31 December, 2003. Mr Wilson and Mr McLeod were appointed as members of the advisory ForestrySA Board prior to Corporatisation and continued on as inaugural members of the South Australian Forestry Corporation Board. They have been replaced by Mr John Ross and Mrs Diana Lloyd, whose term came into effect from January 1, 2004.

ForestrySA contributed to the development of the National Indigenous Forestry Strategy that will identify how the forest and timber industry can work more closely with indigenous communities to help highlight emerging employment, training and new industry opportunities. Several local initiatives have been pursued.

Forest Reserves continue to be enjoyed by visitors with large numbers undertaking a diverse range of activities and attending major events including the Coopers Pale Ale Rally SA. ForestrySA’s “Friends of the Forests” volunteer and community involvement program has been very active during the year with more than 11 000 hours of time contributed to a range of projects that help protect and improve the biodiversity values of Native Forest Reserves, heritage sites and visitor facilities. Work has continued with the Office of Recreation and Sport and Bicycle SA on the development of sustainable mountain bike trails at Cudlee Creek, together with information to cater for the area’s increasing visitation level.

Further community involvement occurred during 2003-2004 with the implementation of a sponsorship program aimed at supporting regional community events. In 2004-2005 this program will be further enhanced through an involvement with Mount Gambier’s Riddoch Art Gallery for the ForestrySA Wood Sculpture Competition and the Belalie Arts Society’s Bundaleer Concert Weekend.

ForestrySA’s support for private forestry continued during the year, assisting in the formation of Mount Lofty Ranges Private Forestry (MLRPF) in December. The aim of the group is to support the development of an innovative and sustainable timber resource for the long term economic, environmental and social benefit of the Adelaide and Fleurieu regions and communities. The MLRPF is the third private forestry committee established in South Australia, the others being located in the Green Triangle Region and on Kangaroo Island.

To upgrade and enhance our public exposure ForestrySA has relaunched our site on the internet (www.forestry.sa.gov.au). The website is a source of information for those interested in the industry and the activities of ForestrySA in particular. It provides detailed information on our organisation, and environmental management, farm forestry, recreation and education programs. The site also provides opportunities for recruitment for those interested in employment in ForestrySA.

The success of the organisation depends on the people who work for it and we commend our people for their outstanding contribution during a very successful year.