Friday Offcuts 27 February 2015
WOOD MARKETS have supplied a detailed analysis this week on Russia and the impact that declining oil prices and the drop in the Russian ruble is having on global wood products supply and prices. The impact of the ruble’s devaluation is already showing up in the Chinese market with falls in both Russian log and lumber prices. The company’s forecasting that a drop of 5% in Chinese (and U.S. lumber) prices from current levels — perhaps even up to 10% — may be seen before a more balanced market enables prices to move up again.
The decline in the Kiwi dollar and lower shipping costs on the back of falling oil prices has seen New Zealand export log prices climb to a nine-month high in February. The domestic market log price (February's average domestic log price of NZ$154 a tonne) has also risen to the highest that’s been seen in more than a decade.
For your technology fix this week we've added a couple of interesting video clips. The first shows a remote tethered harvesting operation working on some steep slopes in Northland, New Zealand. This of course is the main focus for the upcoming steep slope harvesting event, HarvestTECH 2015 in Rotorua on 24-25 June. Full details on the two-day programme are up now on the event website.
We’ve got a story on US based Boston Dynamics, acquired by Google in 2013, who’ll also be presenting at the upcoming MobileTECH 2015 series in April. The company’s been at the leading edge of engineering and robotics design for some time now. Originally developed for the US Military, a series of radical four-legged robots are now redefining just how machinery can move across rugged terrain.
Through FWPA’s R&D Works, we also cover a recent study that's looked at tree height measurements using the latest smartphones and the more traditional hypsometers. And finally, for all those converging on Rotorua next week for the Forest Industry Safety Summit 2015 and Melbourne the following week (there’s a huge contingent of around 400 already registered for this upcoming series), the FIEA team look forward to catching up with you. Travel safely – and enjoy this week’s read.
This week we have for you:
Forest Industry Safety Council underway in early AprilNew Zealand's forest industry leaders have established a safety council to make forests safer places to work. This was a key recommendation of the Independent Forestry Safety Review Panel that reviewed forest workplace safety in 2014.
The Forest Industry Safety Council will formally get underway in early April. But in the meantime a working group representing forest owners, contractors, workers, unions and the government is putting the building blocks in place. An independent chair and national safety director are being recruited.
There were 10 workplace deaths and 169 serious harm injuries in forestry in 2013. This led to the industry establishing the review panel which reported in late October 2014.
“Since 2013, there has been a dramatic turn-round in safety performance. Last year there was one fatality – one too many, but a huge improvement on 10 – and a 25 per cent reduction in serious harm injuries,” says Forest Owners Association president Paul Nicholls.
“There are several reasons for this, including increased mechanisation of harvesting and the successful roll-out of a new Approved Code of Practice. But one of the biggest factors will have been the increased awareness of the need for safe work practice as a result of publicity about the terrible toll in 2013.
“As that year fades from memory, it is essential to maintain and reinforce our safety culture, so that our target of zero serious harm injuries is achieved. For this reason we have deliberately called the new body a ‘council’, to reinforce the status it will have in the industry.”
Nicholls says the industry is totally committed to improved safety and to the review panel’s mantra that “if a job can’t be done safely, it shouldn’t be done at all.” It is also reflected in record registrations for the Forest Industry Safety Summit that was held in Rotorua this week.
The safety council, jointly funded by industry and the government, will have triple the resources that were previously deployed by ACC through their injury prevention programme, says Ian Jackson, president of the NZ Farm Forestry Association.
“Its first priority will be to agree on a work plan for its first 12 months. But its focus will be on practical tools and systems for improving safety in forest workplaces, including farm woodlots,” says Jackson.
“Many farmers and farm staff are handy with a chainsaw. But harvesting forestry blocks, especially on steep hillsides, is specialised work that must be carried out by people with appropriate skills and safety credentials.”
Forest Industry Contractors Association (FICA) director John Stulen says both corporate and farm forest owners have worked closely with contractors to improve safety for all workers on the forest floor.
“Several years ago, forest managers recognised that manual tree felling was becoming too risky in steep country. A steep land harvesting research programme was set up with a vision for ‘no worker on the slope, no hand on the chainsaw’,” Stulen says. “This work, supported by innovative engineering firms and contractors in Nelson and Rotorua, has borne fruit, with the development of a new generation of harvesting technologies.
NZ export log prices rise to 9-month highNew Zealand export log prices rose to a nine-month high in February as local returns were bolstered by a decline in the kiwi dollar and lower shipping costs.
The average wharf gate price for New Zealand A-grade logs rose to NZ$110 a tonne, from NZ$103 a tonne in January, according to AgriHQ's monthly survey of exporters, forest owners and sawmillers.
New Zealand log returns are benefiting from a decline in shipping costs, as the price of oil has slumped from a peak in June last year, and as this year's 3.5 percent decline in the New Zealand dollar makes the nation's exports more competitive. The New Zealand dollar returns aren't reflecting demand in China where log inventories have been climbing after sawmills closed for the Chinese New Year and as log buyers face difficulties getting access to credit.
"New Zealand dollar returns have moved in the opposite direction to prices for logs delivered to China," said AgriHQ forestry analyst Ivan Luketina. "Although there has been a reduction in US dollar payments to exporters, the continued changes in exchange rates and shipping prices have meant that it is more than offset in terms of returns for New Zealand exporters."
Luketina said the availability of Russian logs at cheap prices had weighed on prices for New Zealand logs. Still, he said Russian production was constrained by difficult harvesting conditions and high transport costs.
In the New Zealand domestic market, the average log price has risen to the highest in more than a decade on demand for finished products in Australia and the US, as well as demand for pruned logs for the export market. That is especially true in the Central North Island, where low supply is forcing mills to pay higher prices, Luketina said.
February's average domestic log price of NZ$154 a tonne is the highest since April 2003, according to AgriHQ data.
Forest safety paradigm shift happeningAfter a horror year of workplace fatalities in 2013, New Zealand’s forest industry performed superbly in 2014, both in terms of safety and wood production. The credit for the dramatic turnaround in safety performance has to go to the people on the forest floor. These hard-working people were the same ones who made their voice heard at the Independent Forest Safety Review. They did it to ensure workplaces in forestry could be safer for everyone.
As part of the sweeping safety reform in forestry workplaces, the Forest Industry Engineering Association (FIEA) is bringing international safety experts to New Zealand next week for an industry-wide summit. At this event, forest safety leaders and forest company CEOs will have access to the best safety thinkers in the business globally.
Summit spokesman John Stulen says, “Using international thought leaders in forest safety is vital for bringing change to our local forestry workplaces. Locally, industry leaders have been well connected to them. So a number of significant changes are set to be announced beginning next week at our summit.”
“Major safety interventions are set to be launched for forestry in coming days and weeks”, he added.
“The Independent Forest Safety Review set the stage for a huge ‘Agenda for Change’ and it is set to be announced at the Summit.”
On 3-4th March, the FIEA Forest Industry Safety Summit for Rotorua brings three big safety leaders for forestry. Every single one of them has a reputation for being respected change agents in safety in forestry in North America:
Steven Falk from Switchback Systems in Canada on the British Columbia coast has earned a practical reputation for identifying how tree-fallers and others in high-risk workplace situations can improve their safety performance. Steven’s teams believe people can change, and that true, sustainable success is found in the power of team. Switchback’s seminars lead participants through the fascinating process of understanding how our stored memories form our core values. It also leads to showing how our core values direct our thoughts, which ultimately produce the actions by which we are judged.
Ivan Pupulidy of the US Forest Service directs their office for learning nationally and is an expert in fire-fighting safety behaviour – acknowledged everywhere as a very high-risk occupation – especially in Australia and to a lesser degree, in New Zealand. Ivan’s explanation of concepts of risk in frontline worker roles is well respected internationally. Ivan will be speaking on safety system analysis, risk assessment process and operational risk management. These principles apply to lots of related outdoor occupations but of course most directly to forestry and fire-fighting work.
Reynold Hert chairs the British Columbia Forest Safety Council in Canada and has a track record of implementing change in safety records of forest companies there. Prior to his safety council role, Reynold led Western Forest Products (WFP) as president and CEO for four years ending in late 2008. In that time, he oversaw a significant improvement in its safety record. Reynold brings to his role and his industry a firm belief that safe businesses are the best businesses. He believes forestry operations that integrate safety as a way of doing business can see improved results including fewer injuries, lower costs, higher productivity and better worker morale.
All three keynote speakers bring great reputations from bringing practical change to workplaces and workers everywhere. They will be well supported by local practitioners in safe practices at the FIEA Forest Industry Safety Summit 2015. Over 400 delegates have already registered to attend the conference series running in Rotorua on 3-4th March and Melbourne on 10-11th March. For more information or to register directly online, go to http://forestsafety2015.com
Tethered harvesting on steep slopesCheck out the attached video. Lars Rosewarne is a renowned steep hill harvester in Northland, New Zealand. He’s being visited on a weekly basis from overseas visitors interested in his machines and operations on steeper slopes. Currently they’re cutting 600,000 tonnes per year. The remote tethering operation in the video can work in slopes up to 50 degrees and is being promoted for its safety, production and environmental benefits.
This operation, along with a number of others will be profiled by harvesting planners, harvest contractors and leading equipment suppliers from New Zealand, North America and Europe as part of this year’s HarvestTECH 2015 event being run in Rotorua, New Zealand on 24-35 June. Full details on the programme can now be viewed on the event website, www.harvesttech.events
Russian wood upsetting export market pricesWith crumbling oil prices and a very weak currency, the Russian domestic macro-economic situation is getting shaky according to a recent report by WOOD MARKETS. Russia is experiencing an overall cash crunch due to below break-even oil prices and tight financial sanctions being imposed by Western countries (limiting the flow of money in and out of the country), so bank credit has become extremely constrained — a mirror of the EU sanctions on Russia is now limiting access to affordable lending from abroad.
Although Russia’s commercial banks do lend billions of dollars to companies in the country, bank loans are now being set up with interest rates of 25%–30% for small- to medium-sized firms. In addition, some banks are requiring 100% of funds to be secured against the business as a condition of obtaining a credit line. This means that doing business in Russia currently can only be described as rather crazy. The irony is that, with banks imposing stringent restrictions and access to credit so limited, many companies will find themselves unable to stay in business, further dampening the economy’s ability to recover!
Russian banks are seeing their sources of capital dry up, so lending to the forest industry may be overshadowed by some institutions’ objectives around their own survival. However, some Chinese traders have indicated that if financing gets too tough for companies in Russia, they are willing to loan some funds provided they have first right of refusal on much of the lumber produced. As well, a number of Chinese companies have indicated that if Russian lumber stays at low prices, they will build more kilns in China to allow for increased volumes of kiln-dried lumber (as a means to meet the needs of furniture factories and other end users).
With the ruble devaluing from around 33 to the U.S. dollar in mid-2014 to a low of 70 at the end of January (now 65 in mid-February), Russian exporters have been able to lower their U.S. prices to key markets (such as China) while increasing their net returns. Since December, Russian log and lumber volume offerings have been rising, and lower prices have been offered to attract more business/customers. However, it should be noted that actual increases in Russian log and lumber volumes delivered to China were relatively small — reported at 10%–20% higher than normal. However, with the important export market of Egypt very slow, Russian exporters are reportedly diverting more lumber shipments into China to take advantage of better returns and higher volumes.
Lower Russian log prices first showed up at land ports at the China–Russia border, where the local sawmilling industry was able to offer cheaper, green lumber into the northern China market. Now, logs shipped in January and early February from Russian ocean ports to northeastern China ports are being offered at reduced prices, e.g., Russian larch logs (22–30 cm) peaked at US$165/m3 in 2013 and at US$155/m3 in early 2014, and were being offered in January at US$130/m3.
Similarly, Russian lumber from both western and eastern Russia is now available at lower price levels. Russian log prices are down by US$25–$35/m3 since mid-Q4/2014. This situation has caused softwood lumber exporters from other countries to reduce their prices to China as well. For example, spruce lumber prices from Finland and Sweden — as high as US$295/m3 at the end of Q3/2014 — are now are being seen as low as US$250/m3 C&F Chinese port (although most is in the US$255–$260/m3 range); this is considered near break-even for some European exporters.
The current market situation for the main export markets for Russian red pine (which represents about 60% of Siberian mills’ production) is marked by exceptionally low prices in Egypt and the Middle East. The price of IV grade red pine for MENA markets is now some US$90–$100/m3 below its peak in June 2014. What this means is that returns for Russian red pine in these traditional export markets are — for now, at least — US$30–$40/m3 lower (on an FOB mill basis) than for the same wood being sold to China.
Some traders predict that prices of spruce lumber in China could remain more stable (based on stable European demand, as well as break-even price thresholds for European mills), but the price of Russian red pine could fall even further before a bottom is found for this surplus volume. These two species usually trade in a similar range. It is thought that a few companies in Russia could be able to use this “arbitrage” situation, but most lack representatives and contacts in China and will be price-takers. Consequently, it is thought that a further downward trend in red pine lumber prices will occur in China until markets balance out in the late first quarter or early second quarter.
The full picture for many sawmills in Russia requires considering more than just the impact of currency exchange rates. While a halving of the Russian ruble to the U.S. dollar since the summer sounds like a potential windfall in export markets, the price of Russian red pine lumber has fallen in a number of key export markets, with any potential bonus from currency gains having been eroded significantly. For example, Russian sawmill economics are being impacted poorly by railroad service prices (which are in U.S. dollars) that are being raised aggressively, e.g, Russian Railways announced a 10% increase to the export transportation tariff on all cargoes effective in mid-January, and another 13.4% hike took place in mid-February.
Add in the higher costs of imported parts and equipment, as well as steeper financing charges, and some of the currency gain evaporates immediately. Therefore, further declines in Russian lumber prices in China are expected to be limited, especially as larger exporting companies begin to dig in on prices in an effort to hold their bottom lines.
Source: International WOOD MARKETS Group, www.woodmarkets.com
Expressions of Interest - WoodTECH 2015Mill Scanning - Sawing – Optimisation
This region’s inaugural WoodEXPO ran in both New Zealand and Australia in September 2013. It was the last major event that’s been run showcasing new innovations, new products and the very latest equipment for improving local sawmilling and wood manufacturing company’s operating efficiencies – and profitability. Over 1100 turned up for the technology series.
WoodTECH 2015 will join together previous SawTECH and Wood Manufacturing events run in the past by the Forest Industry Engineering Association. The technology series this year is planned to run on 16-17 September 2015, Melbourne, Australia and then again for New Zealand companies on 22-23 September 2015, Rotorua, New Zealand.
The event being planned will provide an essential global update on an array of exciting new wood scanning, sawing and mill optimisation technologies best suited to local operations that have recently been developed.
Interest has already been made by key providers of equipment to these industries. The programmes for both countries are shortly to be developed. At this early stage, if interested in presenting or exhibiting at WoodTECH 2015, please get back to firstname.lastname@example.org by Wednesday 18 March.
US FAA proposes new rules for small UAVsThe U.S. Department of Transportation’s Federal Aviation Administration (FAA) has proposed a framework of regulations last week that would allow routine use of certain small unmanned aircraft systems (UAS) in the country’s aviation system, while maintaining flexibility to accommodate future technological innovations.
The FAA proposal offers safety rules for small UAS (under 25 kg) conducting non-recreational operations. The rule would limit flights to daylight and visual-line-of-sight operations. It also addresses height restrictions, operator certification, optional use of a visual observer, aircraft registration and marking, and operational limits.
The proposed rule would require an operator to maintain visual line of sight of a small UAS. The rule would allow, but not require, an operator to work with a visual observer who would maintain constant visual contact with the aircraft. The operator would still need to be able to see the UAS with unaided vision (except for glasses). The FAA is asking for comments on whether the rules should permit operations beyond line of sight, and if so, what the appropriate limits should be.
Under the proposed rule, the person actually flying a small UAS would be an “operator.” An operator would have to be at least 17 years old, pass an aeronautical knowledge test and obtain an FAA UAS operator certificate. To maintain certification, the operator would have to pass the FAA knowledge tests every 24 months. A small UAS operator would not need any further private pilot certifications (i.e., a private pilot license or medical rating).
The new rule also proposes operating limitations designed to minimise risks to other aircraft and people and property on the ground. Further details can be found on: The current unmanned aircraft rules remain in place until the FAA implements a final new rule. Further details and links on the proposals can be found by clicking here.
Source: Spatial Source
Google’s Boston Dynamics speaking at MobileTECH 2015Boston Dynamics is an engineering and robotics design company that is best known for the development of BigDog, a quadruped robot designed for the U.S. military with funding from Defense Advanced Research Projects Agency and DI-Guy, software for realistic human simulation.
Early in the company's history, it worked with the American Systems Corporation under a contract from the Naval Air Warfare Center Training Systems Division (NAWCTSD) to replace naval training videos for aircraft launch operations with interactive 3D computer simulations featuring DI-Guy characters.
On 13 December 2013, the company was acquired by Google. As part of the upcoming MobileTECH 2015 event for companies in this region’s major primary industries, Sangbae Kim, Associate Professor of Mechanical Engineering, MIT Biomimetic Robotics Lab, USA on “Robotics and What this means for the Future of Off-road Transportation & Applications”.
Check out a recent clip of the Robotic Dog. Full details for MobileTECH 2015 can be found on the event website, www.mobiletech.events.
Campbell Global grows presence in AustralasiaCampbell Global, a full-service timberland investment firm, has added two senior positions to focus on its global business strategy. Mauricio Penteado joins Campbell Global as Head of Latin America, based in Brazil; Rob van Rossen comes to the company as Director of Acquisitions, Australasia, a position located in New Zealand.
The new positions represent a strategic focus on the firm’s global business initiatives, led by Angie Davis, Managing Director Investor Relations & Business Development, and Steven King, Director of Global Business Strategy.
Recently van Rossen owned and operated Rob van Rossen Consulting Ltd, and has experience in forest management and production, logistics and domestic and export log sales. He has over 15 years of experience in executive leadership and has held an array of leadership roles in numerous industry organizations including Chair for the Forest Growers Interim R&D Committee in New Zealand in 2013.
Campbell Global currently manages more than 3.1 million acres (1.3 million hectares) worldwide, representing approximately $6.7 billion in assets. Campbell Global has been active in international timberland markets for many years including acquisitions, management and dispositions in Canada and more recently the purchase of three forward rotations on approximately 94,000 hectares (232,000 acres) of the South Australia Government’s Green Triangle Plantation Estate and the establishment of OneFortyOne Plantations Pty Ltd.
Measurement errors using smartphones as forestry hypsometersVarious applications currently available for Android allow the estimation of tree heights by using the 3D accelerometer on smartphones. Some make the estimation using the image on the screen, while in others, by pointing with the edges of the terminal. A recent study looked at the measurement errors obtained with HTC Desire and Samsung Galaxy Note compared to those from Blume Leiss and Vertex IV. Six series of 12 measurements each were made with each hypsometer (for heights of 6 m, 8 m, 10 m and 12 m).
The results indicate that the errors of the un-calibrated smartphones significantly exceed those of traditional forestry apparatus. However, calibration is a very easy procedure that can be done by means of a linear regression line between real angles (obtained with a Digital Angle Finder or with a series of measurements taken independently of the experiment), and the angles of the accelerometer.
With this adjustment, the smartphones achieved adequate quality levels although the bias was not totally eliminated. The relative errors when pointing with the edges of the terminal show no significant differences compared to Blume Leiss. Applications that use the screen image give better results (no significant differences were detected with Vertex). There is currently no application that offers calibration of the linear regression slope, which is an essential requirement for ensuring the accuracy of height measurements obtained with smartphones.
For more information on this study, check out the latest issue of R&D Works.
NZ building boom to last at least 5 more yearsThe current boom in the building and construction sector in New Zealand is set to continue amid healthy levels of economic and population growth, according to the latest forecasts, with the housing sector particularly in Auckland and the Christchurch rebuild to continue to drive momentum going forward.
In its latest forecasts covering the five years to 2020, industry research firm BIS Shrapnel says it expects the overall dollar value of building work put in place throughout the country to peak at around current levels of around NZ$14 billion and before easing back to around NZ$12-$13 billion in over the remainder of the forecast period.
By comparison, the industry failed to reach even NZ$10 billion worth of activity as recently as calendar 2011 before the Christchurch rebuild kicked into gear. BIS Shrapnel Senior Project Manager Adeline Wong said strong conditions will be primarily underpinned by strong activity in new housing construction and renovations – especially in Auckland amid strong growth there but also in Christchurch.
“This boost in activity will help drive total dwelling authorisation value to record highs of an estimated annual average of NZ$8.4 billion in real terms, compared to the previous high of NZ$6.1 billion over the period from 2000 to 2005,” Ms. Wong said, according to The Urban Developer.
Aside from the Christchurch rebuild – which by itself has accounted for more almost NZ$2.5 billion worth of building consents issued across 8,575 residential and non-residential buildings since September 2010 – the current boom in the New Zealand building sector is being helped along by a reasonably strong economy as well as high levels of migration.
A publication released last week from the country’s national statistics agency shows that at 1.52 percent per annum, the country’s rate of population growth is faster by a long shot compared with peers such as Australia, China, the United States, the United Kingdom and Germany.
ABARES Outlook 2015 conference runs next weekNext week the ABARES Outlook 2015 conference runs. The focus for this year’s event is on the key issues that will drive the profitability of the Australian agriculture sector, including opportunities from increasing global food demand, access to international markets, trends in productivity and technology, and improving the business environment for agricultural producers through innovative financing solutions and reductions in regulatory burdens.
Industry and government will be meeting in Canberra on 3-4 March to discuss key domestic and global issues affecting Australia’s rural industries at Australia’s leading forum for decision-makers in the agriculture, fisheries and forestry sectors. Further details on next week’s event and last minute registrations can be found by clicking here
Australian Paper mill to closePassports and birth certificates will no longer be printed on Australian-made paper following the Australian Paper's decision to close its Shoalhaven mill. Australian Paper's chief operating officer, Peter Williams, said despite the company's best efforts and ongoing support from the local community, the market for specialty and security papers, including cheque and watermark papers, had continued to decline over recent years.
"Unfortunately, this has made the ongoing operation of the site progressively unviable," Mr Williams said. "This situation has left us with no choice but to close the Shoalhaven facility which will result in the loss of 75 jobs. The timing of the closure is yet to be finalised, but production will stop sometime this year, taking customer needs into consideration.
Wooden bricks by Breathe ArchitectureStonewood is a house located in a tree-lined Melbourne street that had been given heritage status by the local council. It’s one of Breathe Architecture’s more outwardly clever designs, not least because of its operable timber ‘block’ cladding façade.
Stonewood was originally a dilapidated early twentieth century home that council had at first resisted demolishing. But while the architects recognised that the original building was not worth restoring, they worked to ensure the new build remained site specific and sensitive to its surrounds.
Their main point of reference was a neighbouring bluestone cottage – a point of pride for the street’s heritage – which informed the scale and form of the new two-storey home. Stonewood’s ventilated timber cladding façade was also designed as a modernised alternative to the stretcher-course bluestone, with the Class 1 Victorian sugar gum cladding cut into the same dimensions as the bluestone instead of being laid in planks.
Apart from being used as cladding on the façade, wood is a dominant material within the home. All new timber was sourced from Australian State-managed forests, and class 1 timbers were selected for their robustness and durability; according to the architects they can last over 50 years above ground with no maintenance required.
Recycled timber boards were also used for the flooring, joinery, wall and door linings, as well as for the timber staircase and balustrades. “Although the project is designed for longevity and durability, future disassembly and reuse was also considered,” says the design team. “Top-nailed floorboards without adhesives ensure that the timbers used can be repurposed.”
Source: Architecture & Design
Buy and Sell
...and one to end the week on ... golfing in Scotland
John, who lived in the north of England, decided to go golfing in Scotland with his buddy, Chris.
And on that note, have a great weekend. And, GO THE BLACKCAPS!!!!! Cheers.
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