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The Sugar Gum Story: the Marketing Success of a Humble Shelter Tree

Liz Hamilton

Corangamite Farm Forestry Project,
83 Gellibrand St, Colac, 3250, Victoria, Australia


Sugar gum, (Eucalyptus cladocalyx) is a medium-tall tree, endemic to South Australia. The best growth and form trees occur in the southern Flinders Ranges towards the top of the Spencer Gulf where it sometimes attains 35m in height with a dbh of 1-1.5m. The mean annual rainfall where it naturally occurs is around 380-650mm with a winter maximum. Sugar gum grows well on a range of soil types from deep sands and ironstone gravels to heavy clays on the basalt plains of western Victoria. However, it can be frost sensitive when young and it does not tolerate waterlogging.

The first direct seeded sugar gum plantations in western Victoria were established in 20-60m wide belts by J.L. Currie in 1876. Sugar gum was chosen by early settlers as the principal species after it proved it could flourish and out live most of the other species trialled in this region. These plantations were principally established for much needed shelter on the naturally treeless, western plains, but sugar gum was also valued for its excellent firewood and was occasionally used for fence posts, rails and various other on-farm uses. Sugar gum continues to be planted across a range of sites as experimentation with species by landholders and researchers reaffirm the early settlers knowledge that it is one of the best performing hardwood species in the medium to low rainfall regions of western Victoria. The Corangamite Farm Forestry Project, (CFFP) estimate that there are over 3000 hectares of sugar gum plantations originating from the early settler and Forests Commission plantings and that hundreds of hectares have been planted over the last decade.

The Multi Purpose Tree

Over the past decade, sugar gum has unfolded as a species which has many excellent environmental benefits and wood properties as outlined below:

  • It has excellent drought and fire tolerance and it has the ability to coppice prolifically.
  • According to tree growing expert, Dr. Rod Bird, the typical 20 metre wide sugar gum belts established on the western plains are one of the most effective designs for providing shelter over long distances due to their height and permeability(1).
  • A Victorian Study of Firewood Properties rank sugar gum as equal to yellow box, (Eucalyptus melliodora) and superior to red gum, (Eucalyptus camaldulensis), in terms of it's available heat output/unit volume(2).
  • The mature heartwood of sugar gum produces a strong, dense timber with an air dry density of 1100 kg/m3 at 12% moisture content, after reconditioning,(3) making it similar to red ironbark, (Eucalyptus sideroxylon).
  • Sugar gum produces an attractive, tan coloured timber of fine, uniform texture, commonly with an interlocked grain which is generally free of defect.
  • Results from a 25 year durability study ranked the mature heartwood of sugar gum as durability class 1 for both above and below ground application (4). This is the highest Australian durability classification.
  • Sugar gum is one of the handful of Eucalypts, which the Commonwealth Scientific and Industrial Research Organization, (CSIRO), are commending for its favourable sawing and drying properties as a young age eucalypt. Senior wood scientist, Dr. Gary Waugh, rates sugar gum highly and sees it as a high priority species for further research (5).
  • Sugar gum timber is highly suited for use as electric fence droppers. According to Dr Gary Waugh, it has electrical resistance conductivity properties very close to those of other well accepted insultimbers; yellow stringybark, (E. muelleriana) and grey ironbark, (E.paniculata) (5).
  • Being strong and durable, sugar gum produces timber suitable for heavy construction purposes. It also produces structural timber of very high strength and low defect for use in the building trade eg. as posts and beams. Sugar gum is also being used for indoor and outdoor furniture, flooring, panelling, benchtops, tables, cupboards, doors and as a craftwood.

Marketing Sugar Gum for Firewood

Across western Victoria and South Australia, sugar gum has been highly prized as a firewood species for many years. In the Corangamite Region, where around half of the western districts’ sugar gum plantations lie, half a dozen or so woodcutters cut sugar gum firewood on a regular basis under a system where the woodcutter would harvest and clean up the plantation and the landholder was paid a royalty of $2-5/m3 for split, stacked firewood. The firewood was left for 6-9 months to dry and then sold in small lots of 2-5m3 delivered to regional towns and outlying areas for an average price of around $45-50/m3, mostly on a cash-in-hand basis. Some landholders were reluctant to harvest their plantations due to bad experiences with some unscrupulous woodcutters or failure of the plantation coppice to survive. Furthermore, there were few options available for alternative ways of harvesting and marketing plantations and there was a lack of information on how sugar gum plantations should best be managed to maintain shelter and wood production.

Until recently, sugar gum was virtually unknown as a firewood species outside of western Victoria and South Australia, as is evident from a survey of over 80 wood merchants undertaken by the CFFP in 1997 through southern Australia(6). From this survey, a handful of woodyards responded that they would be interested in trialing sugar gum but most were concerned about marketing an unknown species and the potential problem of establishing continuity of supply. After follow up phone calls, visits and deliveries of firewood samples to some of the more enthusiastic firewood merchants, we chose one merchant, Peter Daliosio at Thomastown Woodyard to become our first sugar gum firewood retailer in Melbourne. We focussed on Peters’ woodyard because;

  • He was willing to pay more than that which was generally being obtained for sugar gum firewood in regional Victoria, (approximately $67/m3 in Melbourne compared to $45-50 /m3 locally).
  • His woodyard was well positioned with good access to help minimize transport costs and he was able to take at least 20m3 loads at a time.
  • He was willing to take dry firewood split or unsplit.
  • He was a relatively small scale operator who was not locked into having to source all his firewood from one supplier, hence, he was able to be somewhat opportunistic in the way he sourced his firewood and the issue of continuity of supply was not a significant limiting factor for him.
  • He could see the advantage of selling a plantation-grown product which was unavailable anywhere else in Melbourne at that time.

Coinciding with our promotional work with woodyards, CFFP conducted a survey of 315 firewood-using householders in the Ballarat area. Results indicated that 94% of those surveyed said that they would be more likely to buy plantation-grown firewood, where available, due to the perceived environmental benefits [7]. A similar survey undertaken in North east Victoria by Bruce Sonogan, (pers. comm.)[8], also confirmed consumer preference for plantation firewood.

The CFFP started to promote sugar gum through regional radio stations, newspapers and farmer targetted magazines emphasizing the species key attributes as follows;

  • “environmental friendliness”,
  • excellent burning properties;
  • suitability as a farm forestry species for the low to medium rainfall zones of western Victoria.

Although it was tempting to promote sugar gum firewood widely in Melbourne, we decided on a small targeted campaign, as we were unsure if the supply would be able to keep up with the potential level of demand that might have been generated. Hence, we made contact with various environmental groups, some of whom had already been questioning the sustainability of existing firewood harvesting in public and private native forests and remnant trees. Through these groups we found that there was a real demand for quality plantation-grown firewood as many environmentally conscious consumers had been looking for such a product.

So here we had a source of plantation firewood that was readily available, (or so we thought), we had a well established group of professional and part time firewood cutters, a demand generated for plantation firewood that was not being met in the marketplace and a product that was good enough to compete with the other traditional firewood species. With the higher returns being offered for bulk loads of sugar gum in Melbourne it seemed logical that woodcutters would be interested in selling at least some of their firewood into this new market. However, this was not the case. Many of the woodcutters were suspicious of dealing with distant middlemen and preferred to continue to market their firewood locally on a small scale. Other issues also came up with the woodyards regarding, presence of ants and retention of bark on the firewood that hadn’t been concerns in the local markets.

Finally, a couple of entrepreneurial landholders began arranging their own harvesting operations and the first loads of sugar gum firewood began rolling into Thomastown woodyard in 1998.

Nowadays, the average royalty paid to landholders for sugar gum firewood has risen to $5-10/m3, the number of woodcutters have increased and the harvesting has become more efficient through increased mechanisation. The traditional system of paying by the stacked m3 is still common, however, a number of landholders and woodcutters are now trialing other harvesting and marketing systems that will increase their share of the profit. Having compared the costs and returns of the various harvesting and marketing options available to him, one landholder is currently paying woodcutters to cut his sugar gum plantations on a per cubic metre basis and is arranging the transport and marketing of sawlogs and firewood into Melbourne himself. Others are now offering their plantations for harvesting on a tender basis.

Plantation grown sugar gum is now retailing in Melbourne at the same premium price as yellow and grey box. Firewood merchants in Melbourne are home delivering small lots of split, dry sugar gum for as much as $140/ m3. Higher prices are paid for speciality products such as small diameter firewood for wood-fired pizza ovens. Currently, Melbourne merchants are paying around $80-$85/m3 for 30cm lengths of dry, sugar gum firewood delivered to the wood yard. In regional centres around Colac, Ballarat and Geelong consumers are paying around $60-$65/ tonne for home delivered, split, dry sugar gum in small lots where cartage distances are generally less than 50 km.

Demand in Melbourne for sugar gum firewood, through at least 5 wood yards, and through local merchants and other outlets currently outstrips supply.

Marketing sugar gum sawlogs

CSIRO research data released in 1996 identified sugar gum as being of the highest durability rating for in-ground use and the species was also given the green light for its suitability as an insultimber, confirming some of the anecdotal information we were hearing from landholders about the species. This information opened up another potential market and hence we set about promoting the species to fencing and landscaping companies around Victoria. At least one local sawmill, Hutton’s at Barongarook, is now producing and marketing insultimber and a number of other products for high durability application.

Over the last few years, millers and researchers started looking into the wood properties and milling potential of sugar gum and CSIRO milling trials commended sugar gum for its favourable sawing and drying properties as a young age eucalypt. Farm forestry networks and research bodies have been actively promoting the species as it was virtually an unknown species in the timber and manufacturing industries. Interest in obtaining sugar gum logs and sawn timber increased as we worked closely with all stakeholders from landholders and firewood cutting contractors, to the millers (who had generally had little to do with the species), right through to the furniture manufacturers and potential consumers. A number of high quality sugar gum products such as drawers, bedsteads, tables and bowls were produced and used at farm forestry field days and at meetings with furniture manufacturers to help illustrate the species potential.

A timber marketing report commissioned by the Central Victorian Farm Plantations committee confirmed that there was a lack of knowledge about sugar gum in the market place. However, most of the 80 or more respondents were very interested in the species after they examined the sample cabinet door and the consultants concluded from their research that sugar gum had “immediate market appeal”(9). This research has further helped to raise the profile of sugar gum.

Contact with environmental groups such as the National Parks Association and the Wilderness Society has helped raise the profile and demand for sugar gum for all its wood products assisted by the fact that it is one of the only Australian-grown, plantation hardwood sawlog species currently available.

Given the relative scarity of the availability of sugar gum sawlogs, (CFFP roughly estimate that there are around 30 000 m3 of millable standing sugar gum sawlogs in western Victoria at present), most of the CFFP’s effort in marketing has been aimed at the smaller millers and furniture manufacturers. The smaller mills tend to be more flexible with the species and the quantities that they process. Promoting sugar gum amongst the high quality furniture manufacturers has the advantage that if, as a timber species sugar gum can gain acceptance in the high quality end of the market, then it should also be able to hold its own in the middle to lower end of the market if and when it becomes a mainstream plantation timber in the future. Being such a dense, heavy timber we believed that it was necessary to provide some of the leading high quality furniture manufacturers with small complimentary quantities of kiln dried sugar gum to experiment with. Feed back from a recent CFFP survey of six manufacturers and marketing organizations who have worked with sugar gum has been very encouraging. They all felt that the favourable environmental credentials of sugar gum was a selling point, though wood colour and quality were the key attributes that consumers based their choices on initially. Some of those surveyed will only promote or sell wood that is either recycled or plantation-grown. Other markets see the scarcity of supply of sugar gum as an actual marketing advantage, for those who want something really different from the rest.

As for the landholder, unfortunately there are still plenty of good quality logs going up in smoke but the tide seems to be turning. Through regular articles in regional newspapers and forestry magazines we seem to be getting the message across that sugar gum is a multipurpose tree with an end value greater that just $5/m3 . More and more landholders are seeking advice on how to best harvest, market and manage their plantations in order to get the most out of them. Competition for sawlogs is growing and we now have a list of over 12 millers and furniture manufacturers, keen to purchase sugar gum sawlogs and/or sawn timber. In 1998, a group of landholders harvested 20m3 of sugar gum sawlogs and sent them to a mill in Central Victoria for processing and drying. They anticipate that they will see a final profit of $600/m3 (10). Many other landholders are now looking at extracting sawlogs prior to or as a part of their firewood harvesting operations.

A few years ago sugar gum was only harvested for firewood, returning the landholder $5/m3. A recent tender saw sugar gum sawlogs fetch a standing price of $100/m3.

Picking your market

A common belief in farm forestry is that the market will only deal with timber when it is available in large quantities and that we should narrow the focus on growing and marketing a small number of species. However, that thinking ignores the fact that people will pay for a high quality product and that maybe the relative scarcity of availability, coupled with the species “green” plantation-grown credentials is a real marketing advantage. In the case of sugar gum, we have targeted those smaller processors and manufacturers who have the flexibility and marketing skills to deal with and potentially capitalize on the story behind the tree, in some cases turning the perceived exclusivity of marketing or owning a piece of sugar gum furniture into a marketing advantage.

Find your allies, work with them and be prepared to start small, this will set the scene for larger scale marketing to follow on.

New plantations

The CFFP recently lead a group of American and Australian investors to illustrate the potential for establishing new sugar gum sawlog plantations in the mid to low rainfall zones of western Victoria. The idea is now being marketed to power generation companies in both the U.S. and Australia. It is expected that establishment of new investor funded sugar gum plantations will commence over the next two years to compliment the increasing level of landholder initiated sugar gum plantation expansion happening across western Victoria.


1. Trees and Shrubs for South West Victoria, P.R. Bird, G.A. Kearney, and D.W. Jowett, (1996). Technical Report series No. 25, Pastoral & Veterinary Institute, Hamilton, VIC. Dept of Natural Resources and Environment

2. Firewood from Victoria’s Forests, June 1994, Research and Development Technical Report no. 24, Department of Conservation and Natural Resources,

3. Farm forestry in Southern Australia, a focus on clearwood production of speciality timbers, Dr P.R. Bird, 2000, Pastoral & Veterinary Institute, Hamilton ,Victoria. Department of Natural Resources and Environment.

4. Revised natural durability ratings for the outer heartwood of mature Australian timbers for in ground contact. Published in the Proceedings of the 25th Forest Products Research Conference, Melbourne, 18-21 November, 1996 1/8,12pp.

5. Personal communication with Dr. Gary Waugh, (1999), Senior Scientist at CSIRO Forest Products Division, Clayton, Victoria.

6. Postal survey of firewood merchants in southern Australia undertaken by Liz Hamilton, Corangamite Farm Forestry Project (1997)

7. Results of firewood users’ survey- Ballarat Home Show, May 15-17, 1997. undertaken by staff of the Corangamite Farm Forestry Project .

8. Farmtree$ for the Mount Lofty Ranges, Peter Bulman, 1995 Primary Industries, SA

9. The Central Victorian Farm Plantations Market Planning. A consultancy undertaken by Competitive Edge (Asia) P/L, 2000.

10. Personal communication with Andrew Lang, (2001) farm forester and one of the landholders involved in the harvesting and marketing.

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