COILLTE, the state owned forestry company, is expected to report profits of around £13.6 million for 1996, when its annual report is published shortly. This will bring accumulated profits to nearly £38 million, since the company was set up in 1989.
With assets of £968 million, Coillte is the sixth largest company in the Republic - on the basis of its valued assets. When it was created out of the forestry service in 1989, it had assets worth £570 million and made a loss of £4.2 million in its first year of commercial operations.
Since then revenue has increased from £30 million to £72 million and the number of employees has been reduced from 2,600 to 1,100, as the result of staff restructuring. There has been successful diversification into nurseries, where Coillte now supplies 50 per cent of the market, christmas trees, saw mills and leisure activities.
The general manager for Human Resources and Strategic Change, Mr Paul Cassidy, says that the establishment of the company with a strictly commercial mandate meant major changes to how staff operated were necessary.
These included changing the civil service mentality, breaking down highly centralised structures, removing the division of staff into administrative, professional/ technical and industrial grades, and eliminating highly restrictive work practices.
Rather than draft in specialists, Coillte decided to "home grow" them, he says. Senior managers, for instance, were encouraged to participate in programmes run by international business schools, while other staff were encouraged to develop new professional skills such as accountancy.
The company launched a restructuring initiative for white collar grades in 1990 and one for forestry employees in 1992. Staff surpluses were identified and special early retirement packages introduced. Administration was decentralised, supervisory structures simplified and overtime was eliminated for forestry workers.
The latter also lost old allowances for items like "wet time", or working in wet weather. The incentive bonus scheme, which actually discouraged productivity, was abolished. These changes saved the company £1.8 million in annual operating costs.
However, the introduction of new production linked pay schemes has meant that the earnings of industrial employees rose on average from £240 a week to £280.
It took until 1995 to win the agreement of employees and their unions to the new structures. It is only in the past two years that it has been possible to maximise on the savings and extra productivity achieved.
The company is now embarking on a new initiative to make Coillte a process driven, rather than function driven company. This means identifying and reorganising the company around key business processes, which contribute value and create profits for Coillte.
