Friday Offcuts – 23 March 2012

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Troubled timber company, Gunns was finally able to announce a bit of good news this week. They’ve finalised the first stage of the 46,000 ha Green Triangle forest estate sale (see story below). Funds managed by New Forests, which have now more than AU$1.25 billion in assets under management in Australasia, the U.S. and the Asia Pacific have taken a controlling interest in the forests around the Victorian South Australian border. New Forests is the company that bought most of Great Southern's timber land for AU$415 million last year. Gunns’ equity interest following the sale is valued around AU$120 million the company said in a statement this week.

The second stage of the sale will involve the sale of Gunns’ equity interest to new investors. For Gunns shareholders, suspension in trading continued this week as the company worked with its financial advisers to develop a potential package to raise equity following the surprise withdrawal last week by the Richard Chandler Capital Corporation from their proposed AU$150m investment in Gunns. A further market update is expected to be provided by the company on Monday next week.

This week we have several uplifting stories relating to innovative wood buildings and structures; the release of a detailed 240 page report commissioned by the Canadian Wood Council looking at options for using cross-laminated timber (CLT) and other engineered wood in buildings ranging from 10-30 storeys high, a story of a French architect sheathing a building in wooden shipping pallets and for something completely different, a Russian artist who’s patented a unique technique of creating sculptures out of cedar wood-chips.

Finally, foresters around the world will have celebrated World Forestry Day this week, on 21 March. For the NZ forestry industry, industry leaders met in Wellington on the 21st at the ForestWood conference. An innovative vision for a new sector strategy (see story below) aimed at driving the industry forward was outlined to a wide cross section of forestry companies, wood processors and forestry contractors. One of the key issues identified for the strategy to be successful was that behavioural change from within the sector was required. The gathering was committed to work together to make a longer term pan-industry strategy work - which certainly bodes well for the industry's future.

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Sale of 46,000 ha Green Triangle Forest Estate

Funds managed by New Forests have taken a controlling interest in the 46,000 hectare Auspine estate. New Forests' Australia New Zealand Forest Fund is the lead investor in the transaction, which includes the land and trees of the 64-property estate, formerly owned and managed by Gunns Limited. The plantation estate will be managed by Sydney-based New Forests, an investment manager specializing in sustainable forestry and associated environmental markets.

Auspine is the second largest softwood plantation asset in the Green Triangle, one of Australia’s premier timber producing regions, spanning the border of Victoria and South Australia. "This investment will deliver stable long-term ownership of the estate and reflects the potential for institutional capital to support Australia’s forest sector,” noted David Brand, Managing Director. “Institutional investors are increasingly seeking real assets such as timberland – particularly opportunities like the Auspine assets that offer a steady cash yield from sustainable timber harvest – as part of their investment programs."

Under New Forests’ management, the estate will continue to supply local processing mills for domestic structural timbers through long-term agreements, as well as support local businesses providing property management, harvest, and transport activities.

“The Auspine estate is a great addition to New Forests’ growing Australian timberlands portfolio and will enable us to seek improved efficiencies and added value from managing a comprehensive portfolio of properties across the productive Green Triangle region,” commented Mr. Brand. New Forests manages approximately 375,000 hectares of plantation land and timber plantations across Australia, and the company has over $1.25 billion in assets under management in Australasia, tropical Asia Pacific, and the United States.

For more information on the sale by Gunns, click here

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NZ Forest products strategy released this week

The NZ forestry industry is projecting an extra NZ$5.9 billion annually could be earnt to already rising export returns by 2022 if it follows a cross-sector strategy released on Wednesday. The plan, pulled together by the Wood Council of New Zealand or Woodco, was outlined at the pan-industry Forestwood conference in Wellington this week.

On its current path, the report estimates New Zealand's log and wood product exports will rise in value from $4.6b last March to $6.1b in 10 years’ time. But those earnings could be closer to $12b if the industry embraces a plan to grow domestic capacity, diversify its export base and concentrate on high-value wood-based manufacturing. Bill McCallum, president of the NZ Forest Owners Association, acknowledged the plan was ambitious. "It's a vision but it's an achievable vision." He said the need for collaboration in many areas was not a matter of companies making sacrifices for New Zealand Inc, "but rather a strategy that will add value to all participants".

Woodco plans on developing a delivery mechanism including appointing a Strategic Action Plan manager and setting aside funding to help the industry implement this new joint strategy.

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The case for tall wood buildings

“The Case for Tall Wood Buildings”, a new 240-page report, examines the possibilities for multi-storey engineered wood structures in buildings up to 30 storeys. Commissioned by the Canadian Wood Council, the report looks at the possibilities of using cross-laminated timber (CLT) and other engineered wood in buildings ranging from 10-30 storeys high.

It introduces a new construction model for tall buildings using mass timber panels – called Finding the Forest Through the Trees (FFTT). FFTT is defined as a strong column weak beam balloon-frame approach using large format mass timber panels – either CLT, LSL or LVL – as the vertical structure, lateral shear walls and floor slabs. The “weak beam” component is made of steel beams bolted to the mass timber panels to provide ductility in the system.

The study encourages architects, engineers and designers to push the envelope of conventional thinking about wood construction and inspires them to expand the discussion so wood is positioned as the driving force behind a systematic change for the building industry.

The full report can be downloaded here.

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Wood pallets like you’ve never seen before

Christopher Nolan’s 2010 film Inception may have left many with stitched brows and confused looks. Few though could forget the scenes of Paris dissolving, rebuilding, and folding in on itself. French architect Stephane Malka has imagined a similar vision of architectural flux, but one brought to life through the pragmatic re-appropriation of wooden shipping pallets.

For a recently completed study for a student residence in Paris, Malka has envisioned a building sheathed in a skin composed of modular wooden pallets. According to Domus, Malka’s proposed façade is a lattice of wooden pallets connected with horizontal hinges, which allow for the extension and contraction of the pallets.

The pallets function like large shutters, opening and closing for privacy, but arranged to inform the overall geometry of the exterior, which becomes charged with a dramatic sense of movement.

Source: Architizer News

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Improving wood production of subtropical pines

Australia’s sub-tropical plantations of slash pine (Pinus elliottii), Caribbean pine (P. caribaea), and their hybrids—the preferred tree species over the last decade—are important sources of high quality timber, but which of these species have the best wood properties that will help growers get the best financial returns?

A new project has analysed growth and wood property data across two sub-tropical plantation sites. Trees were managed under a number of different commercial thinning regimes and were assessed for the wood properties of density, stiffness and spiral grain.

Findings show slash pine has a higher density than Caribbean pine, and the hybrid has densities between the two parents. Slash pine also increases in density at a faster rate. Spiral grain comparisons showed slash pine had the least desirable grain angle values, while the hybrid angles were between their parents or similar to Caribbean pine. The hybrids tended to have wood stiffness values similar to slash pine. Acoustic velocity measurements show slash pine values are not changed much by stocking rate, whereas hybrid and Caribbean pine velocities reduce when grown at high stocking rates. This suggests they may be more affected by site conditions.

For full details on the story and link to the study, check out the latest R&D Works Newsletter

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Objectives of Tasmanian forests deal can’t be met

A leaked forestry report late last week according to a number of media sources confirmed Tasmania's forest peace deal cannot deliver both promised reserves and wood supplies. The Review of Tasmania's Forest Estates is one of the confidential reports which will help determine how much forest will be protected from logging under the peace deal.

The federal-state agreement nominates 572,000 hectares for forest reserves. The deal also guarantees wood supply for saw log contracts and for timber veneer company Ta Ann. But the leaked report says "the joint objectives articulated ... cannot be accommodated in Tasmania's native forest". It says that even if no new reserves are established, there are not enough native forests to fulfil contracted wood supplies into the future.

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Chips start moving in Tasmania

Tasmania's forest industry this week welcomed news that woodchip exporter Artec will start shifting stockpiles from its Bell Bay mill. Artec has secured a 100,000 tonne order from an Asian customer. The woodchip mill temporarily closed last month, blaming a downturn in export demand and the high Australian dollar. The order will require more supplies from local sawmiller’s and private growers to meet the demand.

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Unique wood-chip sculptures of Sergei Bobkov

Fifty three year old Sergei Bobkov has patented a unique technique of creating amazing sculptures out of Siberian cedar wood-chips. It’s not very interesting to do what others can. To create something out of nothing in a completely new way is far more inspiring. This is how Sergei Bobkov explains the unique form of art that he created.

He says many people compare his artworks to taxidermy, because they both look so much like the animals they replicate, but Sergei believes they are as different as light and darkness. Whereas taxidermy is all about death, his wood-chip art symbolizes life. This resident of Kozhany, Russia, has developed his very own technique, that prevents wood-chips from falling apart in time.

After creating about 100-150 chips, from 2-3 inch long cedar stick, he puts them in water for several days. Then, making use of his surgical precision, he carves the chips into any shape he needs. Sergey has been doing this for some time now, but he has only created 11 wood-chip sculptures. That’s because just one of these incredible artworks takes around six months to complete, at a work rate of 10 to 12 hours a day, with no days off.

Sergei Bobkov focuses on wildlife creatures, and he studies their anatomy for months, before starting work on a sculpture. Even though he was offered $17,000 for his wood-chip eagle, Sergeis Bobkov declined, saying his art is not for sale.

Check out these amazing sculptures by clicking here

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Using precision technology to increase profitability

The AUSTimber2012 Forestworks’ Conference 29th March 2012 has a theme ‘precision forestry in action’. Organisers have secured speakers from around the world prepared to share their experiences applying precision technology to businesses and forestry agencies in a variety of different countries.

Canada is a world leader in using advanced technology to maximise log recovery and Mr Jean Plamondon of FPInnovations, will share their experience in maximising log value recovery and integrating new inventory methods, harvester data and sales data. Jean’s acknowledged expertise in forest harvesting efficiency and the use of on-board computers will open doors for similar applications in Australia. Jean works to improve forest harvesting efficiency and the use of on-board computers and will give examples from the North American experience

Treemetrics CEO and co-founder, Enda Keane will present on the role of decision support systems and pre-harvest data in increasing produce and value recovery at harvest. TreeMetrics has pioneered a unique cloud-based platform that also harnesses Google Earth, using cloud computing. Treemetrics announced it has indexed more than 11 million trees worldwide, which it says gives it “the largest forestry analytics database in the world”.They have most recently worked with the European Space Agency. The company’s use of 3D laser scanners and innovative analytics to provide the commercial forestry industry with accurate and cost-effective measurement of trees before harvesting has won them the Schweighofer Prize, a prestigious EU forest innovation award, and the Society of Irish Foresters Innovation award.

Presentations from technology leaders from New Zealand, South Africa and Sweden will also be given as part of the conference. Full details on the programme can be found on the Austimber 2012 website.

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ArborGen faces faster route to commercialisation

Forestry biotech company ArborGen, which counts NZX-listed Rubicon as a major shareholder, may be on a quicker route to taking one of its products to market after US officials trimmed the timeline in the approval process of biotechnology products.

The US Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) has outlined new processes to determine whether biotech products should be approved for commercial use, cutting the time to 13 to 16 months from an average three years per petition previously.

That means ArborGen could get its cold-tolerant eucalyptus product to market sooner than previously expected, provided it secures all the appropriate approvals.

ArborGen wants to bring genetically-modified eucalyptus trees to market to enable production of the hardwood for pulp and biofuel in managed plantations in the south-eastern United States. The company has been selling varietal pine seedlings since 2006. More >>

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Australian Timber Market Survey results out

URS has released the December quarter 2011 edition of the Australian Timber Market Survey (TMS) report. The TMS reports on timber price movements collected through a quarterly survey of the buying price of timber products by timber wholesalers and merchants in eastern Australia.

The Australian housing market continued to soften over the December quarter 2011. There were approximately 33,500 new dwelling approvals, a fall of around 12.8% from the September quarter. Any influence of lower interest rates on new dwelling approvals are likely to be realised over the first half of 2012. The value of alterations and additions, which relate to the home renovation market, remained steady at around AU$1.6 billion over the December quarter (an increase of around 1.1%).

Weaker conditions in the housing market have contributed to lower prices for timber products used in housing construction. This quarter’s TMS results showed prices for MGP10 and MGP12 structural softwood products falling by around 0.4% to 1.0%. MGP10 and MGP12 product prices showed varying trends at the state level. In contrast to structural product prices, outdoor timber product prices have been relatively steady over 2011, particularly for treated sleepers.

Imports of softwood sawn timber rose to around 158,000 cubic metres over the December quarter, a moderate increase of around 1.1% since the previous quarter. This continues a period of relative steadiness for softwood timber imports, despite a downturn in the housing construction market. Imports of softwood plywood and veneer timber products rose to around 82,400 cubic metres over the December quarter, an increase of around 7.7% from the previous quarter. This continues a general upward trend for plywood and veneer imports that started over the second half of 2009. Over this same period, the TMS has recorded a downward trend in the price of Plywood C/D grade products.

Prices for kiln dried hardwood structural products F17 and F27 increased by around 0.7% and 1.2%, respectively, over the six months to December 2011. Meanwhile, price movements were mixed for hardwood flooring and joinery appearance grade products. Prices for Victorian Ash and Tasmanian Oak flooring products continued on a general upward trend, while price movements for some Spotted Gum and Blackbutt flooring products showed moderate price falls.

Unlike recent trends in softwood timber imports, hardwood timber imports have not experienced significant increases following the global financial crisis. Imports of hardwood sawn timber fell to approximately 20,500 cubic metres over the December quarter 2011, a decrease of around 9.5% from the September quarter. The majority of hardwood sawn timber imports were sourced from Malaysia (35%) and Indonesia (33%).

To access tyhe full report, click here

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World Forestry Day celebrated

The day, World Forestry Day, originated in 1971. The 23rd General Assembly of the European Confederation of Agriculture came up with the idea that one day should be set aside each year to celebrate the world’s forests and all that they offer for protection, production, and recreation. To celebrate the day in the US this year, a number of industry associations put together a list of 24 ways that forestry can improve our lives. Click here to check them out. You may well have a few more to add to the 24 listed.

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Advanced Biofuels Investment Readiness Program

The Australian Government is calling for applications under the Advanced Biofuels Investment Readiness (ABIR) Program. The ABIR Program is a competitive one-stage, merit-based program that will offer grant funding to selected projects undertaking activities that build the investment case for significant and scalable pre-commercial demonstration projects for the production of high energy, drop-in advanced biofuels in Australia.

The Government announced a AU$5 million grant to James Cook University to develop a macro-algae to biofuels project and the opening of applications under the new AU$15 million Advanced Biofuels Investment Readiness (ABIR) Program. Globally attention is turning to advanced biofuels as they offer an alternative to traditional transport fuels and have the benefit of not impacting on food security as they are derived from non-food feedstocks, such as algae and wood waste.

Applications under the program close at 5pm, 30 April 2012 AEST. For further details click here

Source:BANZ BioFlash

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Buy and Sell

...and one to end the week on...the sentence

A woman awakes during the night to find that her husband was not in their bed. She puts on her robe and goes downstairs to look for him. She finds him sitting at the kitchen table with a hot cup of coffee in front of him. He appears to be in deep thought, just staring at the wall.

She watches as he wiped a tear from his eye and takes a sip of his coffee. What's the matter, dear?", she whispers as she steps into the room, "Why are you down here at this time of night?". The husband looks up from his coffee, "Do you remember 20 years ago when we were dating, and you were only 16?" he asks solemnly.

The wife is touched to tears thinking that her husband is so caring sensitive. "Yes, I do" she replies. The husband paused. The words were not coming easily. "Do you remember when your father caught us in the back seat of my car?" "Yes, I remember" said the wife, lowering herself into a chair beside him.

The husband continued. "Do you remember when he shoved the shotgun in my face and said, either you marry my daughter, or I will send you to jail for 20 years?" "I remember that too" she replied softly. He wiped another tear from his cheek and said......"I would have gotten out today."

And on that note, have a great weekend. For those travelling to AusTimber in Mt Gambier next week, I hope to catch up with many of you over the next few days. Friday Offcuts will be covering the full week of activities being planned for the Australian forestry sector. 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:

This week's extended issue, along with back issues, can be viewed at

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