Friday Offcuts 5 February 2016
The change to Australia’s National Construction Code has been made. It’s now been publicly notified and will come into effect on 1 May this year. What’s it all mean to local wood producers? Ric Sinclair, Managing Director of FWPA says the code change is the biggest market opportunity for timber in the last 30 years. He likens it to the change seen when the industry switched from green hardwood framing to kiln dried softwood. Sales opportunities for timber manufacturers and suppliers have just been opened up for taller structures such as apartments, offices and hotels across Australia. It’s also expected that there's going to be a flow on effect with much greater interest being shown by architects, designers, engineers and property developers in using wood and wood products.
Aside from the substantial benefits that are going to accrue to the timber industry, preliminary economic modelling indicates potential savings with the change of around 10-15% in multi–residential and commercial build costs with net benefits to the Australian economy projected to be approximately AU$103 million over 10 years. FWPA should be congratulated for their role and work in co-ordinating the efforts of the timber industry and regulators to bring about change in the country’s Construction Code. The announcement is certainly exciting for the industry – expanding the market for wood and wood products, selling to a new audience and generating, what’s anticipated to be, an increased awareness of wood and timber building systems.
In addition to this major breakthrough, a number of other good news stories this week have also came out of Australia. We’ve got coverage of the official openings of the multi-million dollar Esperance woodchip terminal on Western Australian's south-east coast, the opening of the AU$14 million Australia Research Council Industrial Transformation Training Centre for Forest Value at Electrona in southern Tasmania, a new record shipment of woodchips being loaded and shipped out of Geelong, Victoria last weekend and a report this week that Australia’s exports of Eucalyptus chips had increased by 58% in just three years reaching a record-high in 2015.
Out of New Zealand this week are WorkSafe figures showing that the forestry industry is really lifting it's game around tackling safety through a raft of industry led initiatives. A marked improvement has been recorded across the board with safety performance out in the forest. Finally, as an industry we pride ourselves on being at the forefront of sustainability. Wink Sutton, well-known forestry identity pointed out to us this week the recent release of a report on the “100 World's most Sustainable Corporations”. No New Zealand companies and only one forestry/pulp/forest products company are included in the list - UPM out of Finland which was rated 25th. All of the major banks in Australia though made the list. Now, work that one out. Enjoy this week’s read.
This week we have for you:
Taller timber buildings code change impacts significantFrom May 1st 2016, Australia’s timber industry merchants and manufacturers will have new sales opportunities in taller structures – up to 8 storeys - for buildings including apartments, offices and hotels. This is the result of a successful proposal to change the National Construction Code (NCC), submitted and managed by Forest and Wood Products Australia Limited (FWPA), the industry services body.
The Australian mid-rise building industry, which has not seen significant changes in decades, is set to experience exciting new developments that will not only create new opportunities for designers, builders, developers and purchasers, but will also drive greater demand for both lightweight and heavy timber building systems.
For the past 2 years, on behalf of the timber industry, FWPA has been consulting with representatives from the timber, building and insurance industries, regulatory bodies and fire and emergency authorities to develop a Proposal for Change to the National Construction Code Volume 1 (NCC).
Essentially, the new code means that it will be easier to use timber building systems in Class 2, Class 3 and Class 5 buildings up to 25 metres in effective height, which is approximately 8 storeys. The use of timber construction in these buildings was formerly restricted to 3 storeys, unless an ‘alternative solution’ was designed and documented to gain approval. This is practical on some larger projects but generally too costly for smaller developments.
New building options will include both traditional timber framing and innovative massive timber systems, such as cross laminated timber (CLT) and Glulam, and require the use of appropriate layers of fire resistant materials, specified design detailing and sprinkler systems.
Preliminary economic modelling indicates potential savings in the order of 10-15% in multi–residential and commercial build costs, primarily due to shorter construction times. The modelling also suggests net benefits to the Australian economy over 10 years of approximately AU$103 million; comprising AU$98.2 million in direct construction cost savings, AU$3.8 million in reduced compliance costs; and AU$1 million in environmental benefits. Benefits to the timber industry, while dependent on the rate of uptake, are expected to be substantial, however it is anticipated that it will take 18 months to 2 years to achieve significant uptake.
Ric Sinclair, managing director of FWPA said the Code change was the biggest market opportunity for timber for the last 30 years, and comparable to the change from green hardwood framing to kiln dried softwood. The increased use of both lightweight and massive timber building systems was poised to generate increased awareness and uptake of wood and wood products, with a halo effect that could extend beyond the buildings immediately involved.
“The changes to the Code not only bring Australia up to pace with much of the rest of the world, but will also deliver a wide range of benefits to local residents, property buyers, the design and construction sector and the timber industry,” Ric said.
He explained that the benefits of taller timber buildings not only include lower costs but also increased opportunities for innovative design and construction, faster build times leading to reduced truck movements and local disruption as well as improved environmental outcomes and increased volumes for the timber industry.
“It is an exciting time for the forest and wood products industry,” Mr Sinclair concluded, “this is effectively an opportunity to explore and develop a new market – selling to a new audience of architects, designers, engineers and property developers who have been accustomed to using alternative materials in these mid-rise projects – and they may well expand beyond them as they become more familiar with the use of timber building systems.”
The Code and changes can be downloaded here from Monday 8 February.
Esperance woodchip terminal officially opensThe multi-million dollar Esperance woodchip terminal was officially opened on Western Australian's south-east coast last week. The project, which is run by Southern Pacific Fibre (SPF), harvests around 2,000 tonne of woodchips per week from local properties and the company expected to send its first shipment to China in the middle of this year.
The opening has been a long time coming for farmers in the region who have weathered the collapse of managed investment schemes, low paper prices, and the hollow promises of past potential chipping companies. SPF's Steve O'Dwyer said after a three month construction phase he was pleased to witness the cutting of the ribbon at the state-of-the-art facility. "It has been a long time coming for the Esperance farmers and it's been one of those motivations we've used to stay with it," he said.
Condingup farmer and Southern Ports Authority director Phil Chalmer said he was pleased his trees would finally be felled and his property could be returned to grazing land again. "We've got a block of land with bluegums on it that we were originally leasing to Elders forestry and they essentially stopped being Elders forestry and we ended up with the bluegums," he said.
"So we had bluegums on a block of land and we were either going to bulldoze them or we wanted to chip them and this facility here allows us to chip them so they aren't going to be bulldozed and burnt. "So they will be chipped and put out though the port of Esperance, so that's great."
Source: ABC News
Logging contractors in B.C. are caught in a dilemmaWith easy-access timber pretty much used up, they are logging in increasingly challenging terrain, including steep slopes that had previously been bypassed because they’re too steep for traditional machinery.
A relatively new approach to operating on steep slopes is tethered, winch-assist logging, which has solved the access problem. It is being used with success in places like New Zealand, contractors were told at recent Truck Loggers Association (TLA) conference in Vancouver.
B.C. logging contractors say they have no choice but to follow New Zealand’s example. “The land base is being stretched and the areas which we’ve been avoiding in the past, we can no longer do that, or we’re just not going to have a land base to operate on,” said Reid Hedlund, owner of Mid-Boundary Contracting.
Steep-slope logging doesn’t necessarily mean going higher in altitude. Even lower down on a mountainside, usable stands of timber are often left standing adjacent to logged areas because the trees grow on slopes too steep for falling and yarding machines.
Some steep-slope harvesting is done using heli-logging, which targets high-value timber in smaller patches. But that leaves behind a lot of other timber that could have been logged had fallers and yarders been able to operate in the steeper terrain.
“Major tenure holders recognize that they now have to go back into these areas that have been bypassed to try to find a way to do it, first of all safely and then cost-efficiently,” Hedlund said. “It’s the future of the forest industry,” said Kelway Cox, owner of Mountain Forestry Ltd. “Moving to these steep-slope harvesters lets us access more timber more economically and is more environmentally sensitive.”
B.C. has been lagging behind New Zealand and northern European countries when it comes to innovation in the steep-slope field. Only a few B.C. contractors, most of them on Vancouver Island, have been using winch-assist logging to get at timber on steeper slopes. More >>.
To showcase some of this innovative new technology being developed, designed and used by New Zealand harvesting contractors, a special one-day event, Steep Slope Logging has been set up specifically for North American contractors and forestry companies. It runs in Vancouver on 2 March. Full details and registrations can be made on the event website, www.steepslopelogging.event.
Defence firefighters help with Tasmanian bush firesFive highly experienced New Zealand Defence Force (NZDF) firefighters have been deployed to remote bush in northwest Tasmania to help battle the state’s raging bush fires over the next three weeks.
Air Commodore (AIRCDRE) Kevin McEvoy, Acting Commander Joint Forces New Zealand, said the firefighters – four from the New Zealand Army and one from the Royal New Zealand Air Force – were deployed in response to a request from New Zealand’s National Rural Fire Authority (NRFA). They form part of a 43-strong contingent from New Zealand which is helping Tasmania’s fire crews fight the fast-moving blaze.
“We have sent the five-member firefighting crew to help Tasmanian fire authorities control the bushfires. They are working in arduous conditions in forest and rural environments,” AIRCDRE McEvoy said.
New Zealand Liaison Officer Tim Mitchell, who is based in Hobart, said the NZDF firefighters worked in remote areas near the town of Zeehan on Tasmania’s west coast on Sunday.
“They have since been shifted to Arthur River in Tasmania’s far northwest, where the wildfires are threatening local communities, and are working 11-12 hour shifts. The Kiwis were keen to help the community fight the fires and the Australians really appreciate that they have come to help,” Mr Mitchell said.
Dry lightning strikes from a number of storms since mid-January have sparked more than 71 fires across Tasmania and authorities have since turned to interstate and New Zealand agencies for help. The fires have so far scorched about 107,000 hectares, including 26,000 hectares of World Heritage-listed wilderness.
Dramatic improvement in NZ forestry safety recordFollowing a spate of workplace deaths in 2013, New Zealand’s forestry industry has set a shining example in improved safety performance nationally over the past three years. Annual serious harm incident rates dropped in half over the past two years. The numbers dropped from 160 incidents in 2013, to 107 in 2014 and then to 79 in 2015.
Even more striking – the rate of serious harm in production forestry has dropped to less of one-third of the rate in 2008. This is based on annual forest harvest volumes lifting from less than 20 million cubic metres per annum to over 30 million in that period.
Figure 1: Reduced Forestry Serious Harm from 2008 through 2015
From June 2013 forest industry leaders from forest management and contracting convened an action group. This led co-funding an independent working party to conduct a national review that made recommendations during 2014 on key issues to be addressed to reduce workplace harm across the forest industry.
- Leaders in both industry and government acted decisively on the advice of the Independent Forest Safety Review to boost safety resources and take key actions.
- During 2015 forest manager and contractor leaders, including worker representatives, formed the Forest Industry Safety Council (FISC). FISC was fortunate to recruit Dame Alison Paterson as chair and Fiona Ewing as safety director. They have taken a practical and inclusive approach with all industry stakeholders. A comprehensive Injury prevention programme has been set up based on risk assessment and incident data.
- Coincidental with the safety review and safety council formation forest industry leaders showed considerable leadership to take new technology in mechanised harvesting onto the most dangerous tree-felling workplace. Traction assisted harvesters are now replacing manual tree fallers wherever possible in corporate forests. These machines isolate workers from the key risks in tree falling.
- Since 2013 over NZ$70 million has been invested in new harvesters capable of working on forests on steep slopes. Machinery technology and developments continue to be led by forest contractors and local manufacturers with close communication, backing and support of the forest managers they work with.
- As a result of both increased injury prevention funding work and mechanisation, the rate of serious harm incidents in forestry has dropped dramatically and constantly since 2008, This is measured against annual roundwood removals from data collected by WorkSafe NZ (formerly Department of Labour) and Ministry of Primary Industries. (Refer Figure 1.)
Record Australian chip shipments to ChinaAustralia has increased exportation of Eucalyptus chips by 58% in three years to reach a record-high in 2015, according to the Wood Resource Quarterly. Shipments to pulp mills in China have gone up substantially and the costs for chips landed in this growing market have increased the past two years to practically equal those of chip costs delivered to Japan.
Eucalyptus chip export volumes from Australia were up 15% in 2015 year-over- year to reach a record-high of 5.2 million tons, valued at almost one billion Australian dollars. Shipments have increased for three consecutive years and were in 2015 about 58% higher than they were in 2012.
The major development in wood chip trade during past few years has been the increase in exports of hardwood chips to China. Back in 2010, chip shipments to China only accounted for about 13% of the total export volume from Australia. In 2015, however, more than half of the chip exports were destined for China and the country has surpassed Japan as the major destination for Australian Eucalyptus chips.
In the past Japan was the major consumer of hardwood chips from Australia, accounting for 80% of the export volume as late as 2010. Over the past five years, export volumes have fallen from about 3.6 million tons in 2010 to an estimated 1.9 million tons in 2015.
Australia has not only increased shipments the past few years, climbing from being the world’s fourth largest exporter of hardwood chips in 2012 to trail only Vietnam in 2015 in terms of total exports. About a third of the world’s traded hardwood chips are currently originating from Eucalyptus plantation forests in Australia. Other major chip-supplying countries include Vietnam, Chile, Thailand, South Africa, Indonesia and Brazil.
Another noteworthy development is how the costs for Australian chips delivered to pulp mills in China and Japan have changed over the past few years. During much of the period from 2011 to 2013, the price discrepancy for chips landed in China were about US$50/odmt lower than chips delivered to Japan. However, since early 2014 the delivered costs converged between the major consuming countries of Australian hardwood fibre, and they have remained practically the same since then only changing marginally in 2015.
Source: Wood Resources International LLC, www.woodprices.com
SWI sells rights to cant sawing optimisation technologyNew Zealand based Solid Wood Innovation has sold the rights to its Cant Opti technology to Calibre Equipment, a Wellington based company specialising in grading and scanning systems. The Cant Opti system was developed by SWI to handle the wide variability in stiffness of radiata pine and to enable sawing patterns to be centred on the pith. The Cant Opti system delivers the size of the low stiffness zone and pith position for each cant which ensures structural sizes are targeted from wood which is sufficiently stiff.
Calibre Equipment is developing a linear version of the technology through the use of an X-Ray array detector and will offer a range of improvements to the existing technology to companies in NZ, Australia and southern USA.
Solid Wood innovation, a research partnership servicing solid wood processing companies in NZ and Australia, will cease operations in June 2016 and is in the process of selling key IP to ensure stakeholders have continued access to its technologies developed over the past 6 years.
New timber training opens in southern TasmaniaA AU$14 million forestry transformation centre has formally been opened at Electrona in southern Tasmania. The Australia Research Council Industrial Transformation Training Centre for Forest Value is a collaboration between the University of Tasmania and seven industry partners including Forico, the Pre Fab Lab, SFM Environmental Solutions, and Forestry Tasmania.
The aim is to produce graduates that will increase the value of Tasmanian wood products. Three new postdoctoral research positions and 10 PhD projects will allow researchers and industry specialists to add value to Tasmanian timber and forests by working in every part of the supply chain.
Deputy director of the training centre Professor Mark Hunt said the centre would produce the next generation of researchers, managers and research leaders. "We are really looking at forestry and forest products, the production landscape and future infrastructure needs and bring all of those things together," he said. "In the past we've tended to think of them quite separately.
"What we're trying to do here is work with partners in fabrication, construction, with other partners in processing of timber, in growing forests, understanding how to restore and manage environmental services in our landscapes, and just connect these together so we can create a better outcome all along the value chain."
Professor Hunt said he had seen big changes in the way Tasmania handled its forests. "What we're doing is coming in behind and working with industry stakeholders to identify what we need to learn and understand and how we need to train people to do things in the modern way."
Photo: ARC Industrial Transformation Training Centre for Forest Value Director Professor Jim Reid, Project partner, Prefab Lab CEO Matthew Gee and Centre Deputy Director Professor Mark Hunt.
Source: University of Tasmania
The most sustainable corporations in the world – where’s forestry?The Canadian-based media and research company (Corporate Knights) has just released its ranking of the 2016 Global 100 Most Sustainable Corporations in the World. The German automobile firm BMW tops the list followed by Dassault Systemes (a French software company) then Outotec (a Finnish construction and engineering firm).
Companies were selected from a starting group of 4,353 listed businesses with a market capitalisation greater than US$2 billion. Included in the top 100 are the four large Australian banks and 7 large oil companies (all these ranked in the top 50!). Only one Paper and Forest Products company (UPM Kymmene of Finland) make the top 100 with a ranking of 25. No New Zealand companies made the top 100.
To check out who’s on the “2016 Global 100 Most Sustainable Corporations in the World" click here.
Source: Wink Sutton
Forestry show NZ way to better safetyA sharp drop in forestry deaths and serious injuries after a massive safety overhaul in 2014 shows what can be achieved when an industry joins together to make improvements, the Business Leaders' Health and Safety Forum says.
The fall is welcome and sets an example for other industries to follow, says Forum Executive Director Francois Barton. "Forestry has shown us some of the things that need to be done to bring down high fatality and serious injury rates in an industry," Francois says.
"After 10 forestry workers died on the job in 2013 the industry set up an independent inquiry to identify what was going wrong and how to fix it. The Independent Forestry Safety Review recommended sweeping changes, including stronger leadership from forestry executives, clearer standards and regulations, better worker participation and better training. Investment in safer equipment has also helped save lives.”
WorkSafe data reportedly shows a drop to three forestry deaths in 2015 from 10 in 2013. The number of serious accidents also dropped to 79 - about half the number in 2013. "That's still three deaths and 79 serious accidents too many. So the job’s far from done, and there is still plenty of work for the industry and regulator to do. But the trend is going in the right direction."
Financial Markets Authority consultation on forestry schemesThe Financial Markets Authority in New Zealand is currently considering possible exemptions to address some issues faced by forestry schemes in complying with the Financial Markets Conduct Act 2013. This paper also discusses how schemes can approach some of their compliance obligations.
Submissions on this close on Friday 19 February 2016. An extract from the consultation paper is detailed below.
“There are some significant compliance issues and exemptions that forestry scheme issuers, supervisors, managers and investors need to be aware of.
The FMA are consulting with industry and investors on whether forestry schemes should be granted exemptions from certain obligations, and outline FMA's view on how schemes can approach some compliance obligations.
1. Many forestry schemes will be managed investment schemes (MIS) under the FMC Act and will need to comply with the FMC Act by 30 November 2016. These schemes should now be making their transition to become compliant with the FMC Act. We encourage schemes to begin this work as early as possible. You can find out more information about MIS obligations and the transition here.
2. A number of questions have been raised about how forestry schemes can comply with some of the requirements of the FMC Act, and if exemptions are necessary and appropriate.
3. In most cases we consider forestry schemes will be able to comply with the FMC Act requirements. This paper discusses how forestry schemes can comply with these obligations.
4. In some limited cases however we consider exemption support may be appropriate. This paper explains our exemption proposals and invites submissions.
For further details, click on the link above.
Geelong Port loads record woodchip shipmentGeelong Port’s biggest ever woodchip cargo sailed from Corio Quay last weekend on one of the world’s biggest woodchip carriers. Following five days of 24-hour loading the Fujian Express departed for Rizhao, China, with about 60,000 metric tonnes of woodchips, about 7000 tonnes more than the previous biggest loading.
The Chinese-built ship is owned by the Nova Group and part of a fleet of large, new carriers built to service China’s growing wood pulp market. Chiefs of North Shore woodchip exporter Midway Limited hailed the shipment as a big start to 2016, due to multi million-dollar dredging of Corio Quay North No 4 berth.
“Before the dredging deepened the berth there was no hope of getting this ship here,” development manager Stephen Roffey said. “The shipment is only possible because of that work. Now we’d expect to get up to eight visits by these large woodchip carriers here this year.” Victorian Regional Channels Authority spent almost AU$10 million deepening the berth and City Bend to 12.3m in late 2014, making them uniform with shipping channels.
Source: Geelong Advertiser
Australia pulls plug on emissions fundingAustralia’s Emissions Reduction Fund is expected to run out of money by the end of the year, after the Government said it won’t put in any more reports Carbon News this week. The ERF replaced the Labour Government’s carbon tax and cap-and-trade scheme, and uses a reverse auction system to identify carbon-reduction projects to subsidise. The current government has said it will review the ERF in 2017, and was expected to keep funding it until then.
But this week, Finance Minister Mathias Cormann said that the fund would not be extended beyond the initial AU$2.55 billion commitment made in 2014 and 2015, of which AU$1.2 billion has been contracted over two auctions. Market analyst RepuTex says that the fund is expected to be exhausted by the end of the year, leaving Australia with a climate-policy vacuum.
"While the review is a positive step, given any new policy is unlikely to be implemented until 2018-2019, this is a long time for Australian emissions to be left to grow without any policy to incentivise emissions reductions or require companies to offset their growth," said chief executive Hugh Grossman.
Australia’s latest greenhouse gas inventory shows that emissions increased 1.3 per cent in the 2014-2015 financial year – the first increase in annual emissions since 2005-2006. Most of the increase came from land clearing and an increase in brown-coal electricity generation and liquefied natural gas production.
Emissions are expected to increase by 6 per cent to 2020. “Under those conditions we are likely to see emissions grow close to the 2005-2006 high just prior to 2020, before reaching a new record high after 2020. We project this pathway will continue to grow under current policy, with no peak in emissions within sight for the Australian market prior to 2030.”
Grossman expects the Australian Government to come under increasing local and international pressure to strengthen its climate change policies.
Source: Carbon News 2016
US housing starts climbed 10.8% in 2015US housing starts increased 10.8 percent to 1.11 million units in 2015, according to newly released figures from HUD and the U.S. Commerce Department. Single-family starts posted a yearly gain of 10.4 percent to 715,000 units.
“These numbers are in line with what our members are telling us that housing markets are improving, but lot and labor shortages continue to be a problem for many builders,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.
“The gradual increase in housing production for 2015 mirrors our forecast and sets the stage for continued growth in 2016,” said NAHB Chief Economist David Crowe. “Strong job growth, rising consumer confidence and pent-up demand will keep housing on an upward trend.”
Source: National Association of Home Builders
Buy and Sell
...and one to end the week on ... ahhh, makes your heart sing
A thoughtful Scottish husband was putting his coat and hat on
to make his way down to the local pub. He turned to his wee
wife before leaving and said, "Maggie - put your hat and coat
And on that note, enjoy the upcoming weekend - with the Kiwi's getting an extra day on the Monday, it being Waitangi or NZ Day. Cheers.
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