It seems that all industrialised sectors grounded in natural biological raw materials go through the same cycle of commencing with low-value-added products. As scientific and technical knowledge develops, this opens the pathway towards higher value-added activities, which is taken by some part of the existing firms in the sector and also by other firms outside the original sector. There may be insights to be had for an industry like the macroalgae industry that is in the early phases of this development by looking at insights from an industry that is in later phases having gone through many cycles. This chapter aims to very briefly make some illustrations from the development in the forestry-based sector that might carry some insights for the emerging macroalgae sector.
TopThe Forestry Grounded Sector
Forests cover approximately 149.4 million hectares or 19 per cent of Australia’s land area. Of this, native forest accounts for 147.4 million hectares or 99 per cent of the total area, with a further 2.02 million hectares of forest plantations, including hardwood and softwood species. The 355,000-hectare, Green Triangle estate, is the largest plantation based wood fibre producing region in Australia. The Green Triangle straddles the state borders of South Australia in the South East and Victoria in the South West. The forest consists of significant areas of both Pinus Radiata (softwood) and Eucalyptus globulus (hardwood) plantations. The South Australia portion of this estate (known as the Limestone Coast) is 188,100 ha of plantation resources, of which 128,400 ha is of softwood and 59,700 ha of hardwood (12.5% and 6.1% of Australia’s total respectively) (Cunningham, 2011). The Limestone Coast softwood plantations consist of mixed age classes that are able to support a wide range of forest products. The softwood industry is vertically integrated with significant areas of plantations supplying saw log, engineered wood products, posts, pulp, paper and other forest products. The hardwood estate is currently mainly supplying export woodchip markets. 2.49 million m3 of plantation softwood are harvested each year (around 17% of Australia’s total) (Abare 2011).
In 2012 the manufacturing strategy for South Australia (DMITRE, 2012, p. 19) defined that the value capture in future manufacturing is based on dual process of value creation (innovations in technology, design and efficiency to increase the value created in the firm) and value appropriation (innovative business models and improvements in efficiency). This should also pave the way for forest industry.
The need for value-added forest industries in Australia has also been identified in other significant documents. For example, in the document Strategic Directions for Forest Research 2008 – 2011 (FFPC, 2008), Australia’s Forestry and Forest Products Committee assess, firstly, that “timber resources are of sufficient quantity and quality for profitable value-adding within Australia” and, secondly, that “the opportunity to add value to Australia’s wood fibre resource is enhanced by access to harvesting and processing techniques and technologies”. To advance in these directions the following drivers are considered: