Friday Offcuts – 21 November 2014

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The New Zealand leg of the ForestTECH 2014 series finished in Rotorua yesterday. Today, we’ve got a number of resource foresters involved with a follow-up introductory course on working with and processing LiDAR datasets. Around 280 resource and forest planners from throughout this region (as well as Uruguay, Canada, the US, Ireland and Indonesia) are attending this technology series.

Remember for the Australian event next week, a special half day open forum has been set up for the second half of ForestTECH 2014 on Wednesday 26 November. It’s been organised by the Forestry Corporation of NSW (with input from HQPlantations, Forestry Tasmania, HVP, NSW Department of Primary Industries and the Canadian Forest Service). It’s designed for operational foresters across the country to discuss and share their experiences on the practical application of LiDAR and remote sensing technologies for mapping, planning, harvesting operations and forest estate management. For those still interested in attending next week, details can be found on the event website, www.foresttech.events

Other news this week. New Zealand is off track - and well off track - according to a recent Government briefing on its carbon-reduction efforts. Although aiming for an emissions reduction target of 50 per cent below 1990 levels by 2050, the country's emissions have actually increased since 1990. They’re still continuing to climb. In fact it’s argued that New Zealand's annual net emissions, including forestry, will rise rapidly to over 100 million tonnes of CO2 equivalent by 2025 - an increase of more than 50 per cent above 1990 levels. Current policy settings obviously aren’t working.

On the economic front, the very contentious softwood lumber trade issue between the US and Canada (you’ll remember this one) may again this year raise its ugly head. A nine year truce was called in 2006 on tariffs being collected on Canadian lumber. US lumber producers have continued to argue that Canadian lumber companies are being unfairly subsidized. The deal’s due to expire on 12 October next year and with US housing starts heating up, the heat undoubtedly is going to be put back on this historic trade grievance (see story below).

In China, housing starts and home prices remain subdued. The property sector according to the analysts is still the weakest part of China’s economy. Although the Government has relaxed some controls such as cutting mortgage rates recently and providing cheaper loans to second-home buyers, it’s going to take some time for the build-up of unsold homes to be worked through. This in turn, is likely to depress demand for raw materials in the short term and keep up the pressure on the country’s labour markets. Further details will follow in future issues. Enjoy this week's read.



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Growth forecasts for wood-plastic composites

Woodplastic and plastic decking is forecast to have the strongest market growth in the US over the next four years, but wood will remain the main material, according to market research company Freedonia's latest market outlook (Wood & Competitive Decking, Study).

The outlook for tropical hardwood use in decking is positive. Even when overall decking demand declined during the downturn in the housing market, demand for tropical hardwood decking grew. Homeowners look for low maintenance materials, and tropical hardwoods offer a natural, attractive appearance compared to plastic or wood plastic composite. Tropical hardwood decking is also known to perform well in the long term, while wood plastic composites had performance issues in the past.

Overall demand for decking is forecast to grow 2.4% per year between 2013 and 2018. Total demand is estimated at US$6.5 billion in 2018, equivalent to 3.5 billion linear feet of decking. The strongest demand growth will be in wood plastic composite and plastic decking.

Performance and looks of both types of decking have improved in recent years with the arrival of capstock-coated composite decking and cellular PVC decking (as profiled at the recent FIEA Wood Innovations 2014 technology series run for local wood producers in September). High-end composite and plastic decking is at a similar price level as tropical wood decking.

The majority of decking will continue to be wood due to the lower price of treated softwood decking and the large number of existing wooden decks that are often renovated with the same material. About 80% of decking by volume will be treated softwood and tropical hardwood by 2018.

Freedonia predicts an annual growth of 1.1% for wood decking. Residential decking accounts for about 60% of the market which is forecast to grow 2.7% annually driven by higher housing starts and deck renovations. The trend towards larger decks and greater outdoor living space also supports growth in decking demand.

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NZ under pressure to reduce carbon emissions

New Zealand is "off track" in transitioning to a low-carbon future amid increasing international pressure to slash emissions, according to a Government briefing. The inter-ministry Natural Resources Sector briefing to incoming ministers, just released, spelt out New Zealand's position and targets around climate change and carbon-reduction efforts.

Key challenges included undertaking responsible growth to meet international expectations, adapting to the range of expected impacts that would affect infrastructure, biodiversity, biosecurity and the primary sectors, and transitioning to a low carbon economy.

Although New Zealand had gazetted an emissions reduction target of 50 per cent below 1990 levels by 2050, the country's emissions had increased since 1990 and continued to rise. "However, we are off track in transitioning to a low carbon future, and there is increasing international pressure to reduce emissions," the briefing said.

Decisions were needed on the best policy mix for New Zealand to achieve the transition, which would include carbon pricing and regulatory measures to cut emissions in New Zealand and buying carbon credits overseas.

Climate change policy had strong dependencies on transport, energy, forestry and agricultural policy, all of which needed to be "better aligned". The briefing described New Zealand's emissions as small globally, although the country ranked 22nd highest in the world on a per capita basis. More >>

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New directors for FWPA

Three new directors were unanimously elected to the board of Forest and Wood Products Australia Limited (FWPA) at its recent annual general meeting (AGM). Candidates to the FWPA Board are selected by an arms-length director selection committee, which includes representatives from four national associations. The candidates that were nominated, and then elected by the company members, were Mr Jim Henneberry, Mr Brian Farmer and Ms Christine Briggs.

Jim Henneberry is the former CEO of Australian Paper and has held CEO and Director positions with Carter Holt Harvey, International Paper and other international companies. He has a strong global track record of leading large complex, private and public businesses and in balancing an operational focus with strong strategic leadership.

Brian Farmer is the current CEO of HQ Plantations and a member of FWPA. His responsibilities include strategic development and management of the company’s resources through leadership and sound policy advice to the Board and investors.

Christine Briggs is General Manager, Marketing and Business Development for Timberlink Australia, a member of FWPA. She will bring high-level sales and marketing skills to the Board, having held senior roles in these areas with major timber manufacturing businesses.

At a subsequent board meeting, the directors re-elected Ron Adams as Chair and John Simon as Deputy Chair.

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Forest Industry Safety Summit 2015

In November 2013, the Forest Industry Safety Summit (which ran in conjunction with The Steep Slope Wood Harvesting Conference) in Rotorua SOLD OUT attracting over 400 forest managers, forest owners, harvest planners, transport operators and forestry contractors from several countries. At the time the New Zealand industry was grappling with the size of the problem. Many people had started to focus on ways to make our industry safer.

Following the release of the Independent Forest Safety Review panel recommendations there's a lot of work to do be done to implement potential solutions and planning a programme for change. As the organisers of this Forest Industry Safety Summit, FIEA plans to be an integral part of bringing people together to boost the motivation and communication for change.

For March 2015 the Forest industry Safety Summit will advance the discussion of safety solutions with an expanded line-up of specialists from both the USA and Canada. The focus will be on though people within New Zealand and Australia - bringing commercial and industry-wide funded solutions to the forestry sectors in both countries.

For 2015 FIEA will also be widening the coverage of forestry safety to include topics of interest to those working in log transport and forest and rural fire-fighting.

NOTE: The programmes for both events have just been uploaded to the event website, www.forestsafety2015.com Check them out.



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Australian wasp to safeguard SA’s commercial forests

One small Australian wasp is killing another tiny Australian wasp in South Africa’s commercial forests – and it is a good thing. Leptocybe invasa, the bad guy in this story, was first spotted in Eucalyptus trees outside its native Australia in 2000, in Israel, says the University of Pretoria (UP) Forestry and Agricultural Biotechnology Institute’s (FABI’s) Professor Bernard Slippers.

The tiny wasps and their eggs hijack the trees in order to feed on them. These trees, full of ‘cancerous’ growths, never grow to their full potential, and become like a shrub, or, in some cases, die. As the wasp cannot fly far on its own, it must have entered Israel through plant material, such as timber, nursery stock, and florist industry products.

Since 2000 Leptocybe invasa has spread to Eucalyptus plantations across the world, including South Africa, says Slippers. It has managed to close down some forestry sites in a number of countries. (Research since 2000 has shown the wasp infestation to be, in fact, the work of two closely related species).

The speed at which the global invasion happened “is unprecedented”, as it used to take decade for pests to travel the world, adds Slippers. “Invasive pests and pathogens have always been a big issue in the industry, but what is changing is the speed at which things are happening. “We knew it was coming to South Africa, we just didn’t know when it would arrive.”

The tiny wasp eventually landed in 2007. South Africa has around half-a-million hectares of Eucalyptus plantations, with the wood used for the paper and construction industries.

One of the methods to counter the impact and spread of the wasp is the use of biocontrol agents – an enemy to the pest. The use of biocontrol agents for forest insect pests was first introduced in 1910 in South Africa, to counter long-horned eucalyptus borers. Since then biocontrol agents have been introduced another seven times in plantation forests, with research on two other bio-control agents under way.

Sourcing the right enemy is the first difficulty, followed by keeping it alive, testing its ‘abilities’, preferences, reproduction cycle and life expectancy in the domestic environment – all under quarantine – and growing the population to the numbers required to counter the problem. All of this takes place at UP’s experimental farm, in Pretoria. The tiny Australian wasp – in fact, 17 000 of them – that has been found to kill the pest wasp, has since 2012 been released on 425 sites in South Africa. FABI is currently testing the efficacy of the introduction. Slippers believes the newcomer will not eradicate the problem completely, but rather bring “down the economic damage to manageable levels”.

Source: engineering News

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NZ’s investment in R&D continues to slip

New Zealand’s dwindling investment in research and development (R&D) has seen it slip down a world table of 34 countries to sit almost at the bottom, according to the recently released Grant Thornton International Business Report (IBR) survey.

At this time last year a net 20% of New Zealand businesses expected to increase their expenditure on R&D, compared with only 12% at the end of the third quarter 2014. Paul Kane, Partner, Privately Held Business, at Grant Thornton New Zealand, said the real danger is that we are continuing to invest less than our major trading partners China (36%), Australia (31%), United States (27%) and United Kingdom (20%).

“The other distressing factor is that China, Australia and the United States have all increased their commitment to R&D. “Traditionally we are a country that does not invest heavily in R&D, often preferring to throw people rather than technology at problems, but this needs to change.

Kane said that a survey undertaken earlier this year by Grant Thornton showed that there was an interest from New Zealand businesses to invest in R&D, but it had to be backed by the Government. “Before the election, we asked business owners what policies would best aid the growth of New Zealand businesses and 89% said that providing incentives for businesses to invest in R&D would help in this area. The big question, therefore, is how to make this happen”.

“The Government does not seem keen on a tax rebate incentive as it believes this is open to abuse and while it does have its own grant and incentive schemes through the likes of the Callaghan Fund, the fund does have limitations, often requiring more upfront capital than a business may have. Perhaps we need something like the large innovation funds that Hong Kong has to co-invest,” he said.

Source: Scoop

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84 year old sawmiller still going strong

Most retirees cut back their hours and take up a hobby. But for 84-year-old sawmiller Ralph Affleck, his hobby and his work have always been the same thing. At the age of 60, he designed and built a sawmill which could be run by just one person - him. Locals around Killarney in south-east Queensland think he's a legend - and they're right.

Three mornings a week, 85-year-old Ralph Affleck heads from his farmhouse at Legume on the New South Wales-Queensland border across the paddock to where he feels most at home - his sawmill.

Remarkably, Ralph designed and built it himself, a little retirement project which took four years to build. Ralph didn't finish school. His only qualifications were 50 years of timber cutting and sawmilling. For more of this story and interview with Ralph Affleck, click here >>.



Source: ABC Landline


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Canadian-U.S. lumber trade dispute simmering

A recent dispute over “country of origin labelling” for meat products underscores the fact that Canada and the U.S. still have their share of trade disputes. Yet lurking in the background is a massive trade issue that you haven’t heard about for a while: softwood lumber, the granddaddy of all Canadian-U.S. trade disputes. Canada exported $7.4-billion worth of lumber in 2013, the highest amount since 2006.

The United States is the destination for the bulk of that wood, and U.S. lumber producers have for decades demanded the U.S. government collect tariffs on Canadian lumber. After decades of dispute, Canada and the U.S. agreed to a nine-year truce in 2006. Under the agreement, the U.S. agreed to return more than $5-billion in duties collected from Canadian lumber companies, and a ceasefire in trade litigation.

If you thought we’ve achieved lumber peace in our time, you might be premature. We’ve now entered the final year of that truce, which is set to expire on Oct. 12, 2015. There are signs this historic trade grievance is set to return with a vengeance. U.S. housing starts are heating up. As U.S. construction grows, demand for Canadian lumber increases, something that will inevitably antagonize U.S. lumber producers who have long argued that Canada’s industry is unfairly subsidized.

“The dragon is never slain. It just goes to sleep sometimes for a while,” Paul Lalonde, a trade lawyer with Dentons Canada LLP in Toronto, said of the dispute. Next year’s expiry date will come at a crucial time. U.S. new home construction, which peaked at 2.1 million units in 2005, collapsed to 554,000 units in 2009 with the financial crisis. Demand for Canadian lumber tanked right along with it, along with lumber prices. Things changed in 2013, when lumber prices rebounded as U.S. housing starts gathered momentum.

“For the first time in years, we actually see new housing starts in the United States past the one-million mark,” said William Polushun, an international business expert and lecturer at the Desautels faculty of management at McGill University. More >>

Source: Financial Post



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Cape Reinga to Bluff now on 50MAX

A significant breakthrough has been achieved for New Zealand freight efficiency with the opening of the last remaining bridge on State Highway One in Horowhenua to 50MAX trucks.

“We’re delighted to announce that the whole length of State Highway One from North Cape to the Bluff is now 50MAX compatible,” says Transport Agency Freight Director Harry Wilson. “This is excellent news for 50MAX operators and local communities who stand to reap the benefits,” says Mr Wilson.

The lifting of the restriction applies only to 50MAX, other High Productivity Motor Vehicles (HPMVs) will need to continue to use the route specified on their permits. This milestone also coincides with another – the first birthday of the 50MAX initiative.

Since it was unveiled in October 2013, around 1850 permits have been issued with a total of almost 60 million 50MAX kilometres driven. 50MAX trucks have the same high safety standards that are required of other high productivity motor vehicles (including increased resistance to roll over and the inclusion of electronic braking systems), meaning they are trucks that are not only more efficient, but also safer.

Many operators are investing in even more safety measures, such as speed limiting, GPS monitoring, weight load cells and Electronic Stability Control. The average improvement in productivity from a 50MAX vehicle is around 15 per cent, making it a key part in the Transport Agency’s strategic priority of moving more freight on fewer trucks.

Source: NZ Transport Agency

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China construction update

Chinese home prices fell for a fifth straight month in September, wiping out gains scored in the past year and raising expectations the government will have to implement more economic support measures to cushion the blow. The monthly falls left average home prices in 70 major Chinese cities down 1.3 percent in September from a year earlier, the first such drop since November 2012.

The worst performance was in the eastern city of Hangzhou, where prices sagged 7.6 percent in September from a year before. “The property downturn is still the main drag on the economy,” Wang Tao, an economist at UBS in Hong Kong, said in a note. “The negative impact of the ongoing property downturn is being felt not only in heavy industry, but also in manufacturing investment.”

The slowdown in the housing market followed GDP data showing the economy grew at its slowest rate since the 2008/2009 global financial crisis in the September quarter, adding to worries that it will drag on global growth.

Chinese officials have indicated they would be willing to tolerate slightly slower growth as long as the job market continued to hold up, so there was some relief in the form of steady unemployment data. China’s urban registered unemployment rate was 4.07 percent at the end of September, down slightly from 4.08 percent at the end of the second quarter, the labour ministry said.

In late September, China cut mortgage rates and down payment levels for some home buyers for the first time since the 2008/09 global financial crisis, its boldest step yet to energise an economy increasingly threatened by a sagging housing market.

Although transaction data from private real estate consultancies pointed to a pick-up in sales in recent weeks, the impact of new government measures to provide cheaper loans to second-home buyers remains uncertain. “It still takes time to see whether a recovery of home sales will affect home prices,” Liu Jianwei, a senior statistician at the National Bureau of Statistics (NBS), said in a statement accompanying the data.

Analysts concurred it was too early to tell if government moves in late September to lower mortgage rates and down payment requirements would be enough to stem the price slide. And even if prices do stabilise, developers will remain reluctant to start new projects until a glut of unsold homes is worked off, depressing demand for raw materials and keeping pressure on labour markets.

“The weakest part of China’s economy is still the property sector,” said Wang Tao, an analyst at UBS in Hong Kong. “The government has relaxed some controls recently and property sales may pick up in the fourth quarter. However, we may not see improvement in sectors like heavy industry and we expect the economy to continue to slow down.”

Source: Canada Wood




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Forest Product Industries welcomes progress on China trade

The Australian Forest Products Association (AFPA) has congratulated the Abbott Government on negotiating a bilateral free trade agreement with China and notes the significant positive potential for export industries. Chief Executive Officer Mr Ross Hampton said, ‘The two-way trade in forest, wood and paper products between China and Australia, expanded exponentially over the past decade and has become extremely important for both countries.’

‘The forest, wood and paper products exported from Australia include roundwood (which has increased in value over the last 10 years from AU$35m to AU$251m) 1, waste-paper (AU$10m to AU$150m in value), and woodchips (from nothing in 2003-04 to over AU$150m today). Imports from China to Australia have increased in value over the last ten years from AU$250 m to over AU$1,100m and include paper and paperboard, panels and transformed wood products.’

As the relationship continues to develop over time negotiators should consider:

- fair transition arrangements when removing or changing existing import tariff rates, as domestic companies need time to adjust their businesses;

- continued support for an effective and internationally compliant antidumping and countervailing system to guard against unfair competition;

- increased access for sawn timber product exports to China by Australian producers by reviewing any unnecessary limitations in building codes and standards; and

- recognition of Australia’s high standards as they relate to existing biosecurity protocols, given Australian exports of fibre-based wood products, such as woodchips and roundwood, are accepted as low-risk.

Source: AFPA

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Further clarification on amendments to the NZ Building Code

We’ve had a lot of comment and input to a story that ran in the 7 November issue covering the Amendments to the New Zealand Building Code which came into effect in April 2014. In it, materials must meet specific fire performance criteria for use as interior wall and ceiling materials in buildings.

Last week NZTIF said that the requirements of the NZBC in fact haven’t changed. Under the amendments, some text has changed to make certain matters clearer but provisions for the use of timber as ceiling and wall materials haven’t altered. Details about where timber ceiling and wall materials can be used are set out in the story and a link to more detailed information supplied.

This week, Jeff Parker, WPMA’s Technical Manager has also provided an update on changes to the NZ Building Code Regulations for Reaction-to-Fire. Recognition of these changes has come late to the NZ timber industry and as pointed out by Jeff, these regulations have indeed changed the ways in which timber can be used as linings in some types of buildings in New Zealand.

In summary, timber has not been completely shut out of the interior linings of buildings in NZ. The unrestricted use of wood as wall and ceiling linings is allowed in residential use but in public spaces, non–fire retardant treated or coated timber can be used as wall linings if the walls are sprinkler protected. A full explanation on the changes and implications are attached here.

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Limited benefits for NZ wood products in Korean FTA

At its meeting on Thursday the Wood Council of NZ (Woodco) said tariffs will continue to restrict trade in processed wood products despite the signing of a FTA with South Korea. “We know how hard government negotiators have strived to achieve a high quality deal with Korea. For the forest industry the job is far from finished, but the proposed agreement is a good start,” says Woodco chair Bill McCallum. Woodco is the pan-industry body representing the interests of all parts of the forest and wood processing value-chain.

New Zealand exported NZ$503 million of forestry products to Korea in the year ending June 2014. Under the FTA more than 99 percent of New Zealand’s current export wood product lines will be duty-free within 10 years.

“But ten years is a long time in business and while a 10 per cent tariff may not sound significant, on price-sensitive products it can be enough to eliminate trade. This is compounded by the fact that some other wood exporting countries already enjoy tariff-free entry into Korea.”

Mr McCallum says the forestry and wood processing industries on a “business as usual” basis will deliver $6 billion a year in export earnings to New Zealand by 2022. The vision in the Woodco Strategic Action Plan is to double this to $12 billion over the same period, largely by converting a higher proportion of logs to higher value products for sale locally and on world markets”.

“But we can’t do this alone. Only the government can negotiate the tariff-free access we need to compete. Tariffs are generally very low on logs and escalate as value is added – effectively shutting our processed wood products out of many markets.”

He says free trade agreements between New Zealand and other countries have tended to headline the benefits for dairy, meat and horticultural exports. “While we welcome the gains the farming sector has achieved, we do encourage greater priority be given to improved access for forest products. We are currently the country’s third largest export industry, but the industry’s common objective is to substantially increase the proportion of wood products that add value on-shore.



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Manufacturing building materials from plants and waste

With a bit of processing, common materials can be made into high-performance building materials, such as pollution-eating roofing and concrete. In some applications, fiberglass insulation, foam insulation, and wood can be replaced by manufactured alternatives that are made from waste materials and select raw materials.

Zeo, an Australian company based in New South Wales, has created a product called Zeoform that is composed of only cellulose and water. The company has patented the process, which uses cellulose from textile waste, recycled and reclaimed paper, industrial hemp, and waste and renewable plants. The process results in a material, the company says, that can be produced at varying densities and can be formed, moulded, or sprayed. The material does not contain glues or other chemical elements, but those can be added to achieve specific properties.

At low to medium density – 0.5 to 0.9 grams per cubic centimetre – Zeoform is applicable for products that require lightweight, thermal, insulating, and acoustical properties. High-density Zeoform (one to 1.5 grams per cubic centimetre) is made for applications such as building materials and automotive parts which require a high strength-to-weight ratio.

Higher-density Zeoform has some inherent water resistance, but the company says surface coatings would be appropriate for more intense weather conditions. Common oil-based and acrylic coatings, polyurethanes, resins, and so on will work with the product, which has binding properties similar to dense hardwood. High-density Zeoform is fire resistant, and has achieved a Bfs/s1 rating, according to BS EN 13501 standards.

As Zeoform can be sprayed, moulded, or formed, it can be used like wood or plastic. So far, the company has used Zeoform to produce furniture, housewares, jewellery, industrial parts, musical instruments, and building cladding. According to Zeo vice president of global branding and marketing Zen Joseph, the company has not yet entered commercial production. The company suggests the Zeoform panels are well suited for use in structural insulated panels (SIPs), factory-built structures, and panelized housing systems.

For more information check out the latest issue of R&D Works.



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New report sheds light on the potential of biomass

International Renewable Energy Agency says biomass could power 20 percent of the world’s energy by 2030 - According to a recent report from the International Renewable Energy Agency (IRENA), biomass could account for as much as 60 percent of the global renewable energy mix by the year 2030, providing up to 20 percent of the world’s electricity needs. In the report titled Global Bioenergy Supply and Demand Projections for the Year 2030, IRENA lays out the case in favour of specific biomass technologies it says will significantly limit greenhouse gas emissions to “two degrees Celsius above pre-industrial levels” by the year 2100. Sustainability is paramount.

Source: Bioenergy Australia


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...and one to end the week on...so, how's your day going?

There I was sitting by myself at the bar staring at my untouched drink. Suddenly, a 6'8" tattooed biker steps up next to me and grabs my drink. He then grinned at me and gulped down my drink in one swig.

"Well, whatcha gonna do about it?" he says, menacingly, as I burst into tears.

"Come on, man," the biker says, "I didn't think you'd CRY. I just need to kick someone's ass, not watch a grown man crying."

"This is the worst day of my life," I say. "I'm a complete failure. I was late to a meeting and my boss fired me. When I went to the parking lot, I found my car had been stolen and I don't have any insurance. I left my wallet in the cab I took. I found my old lady in bed with the gardener, and then my dog bit me."

"So I came to this bar to work up the courage to put an end to it all, I buy a drink, I drop a capsule in and sit here watching the poison dissolve. Then you, you grown horse's ass, show up and drink the whole thing!

But enough about me, how's your day going?"






And on that note, have a great weekend. We look forward to catching up with Australian foresters at next week's leg of the current ForestTECH 2014 technology series. Cheers.

Brent Apthorp
Editor, Friday Offcuts
PO Box 904
Level Two, 2 Dowling Street
Dunedin, New Zealand
Ph: +64 3 470 1902
Fax: +64 3 470 1904
Web page: www.fridayoffcuts.com


This week's extended issue, along with back issues, can be viewed at www.fridayoffcuts.com

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