Friday Offcuts – 20 April 2012
Click to Subscribe - It's FREE! This issue of Offcuts is largely made up of good news stories to end the week on. A relatively young high tech New Zealand company announced this week that they’ve joined forces with a US company to offer a world-leading multi-biomass to biofuels capability and technology for converting biomass, including wood waste, into renewable transport fuels.The Japanese trading company, Itochu Corp. announced that they’ve just invested US$617.5 million for a 24.9% stake in a Finnish pulp company cementing the company’s position as the world’s biggest pulp trader and Christchurch is at last replacing the iconic cathedral that was destroyed in the recent earthquakes and its to be constructed out of amongst other materials, cardboard tubes. Battling Australian timber giant Gunns, although extending its five week trading halt this week is reported to be close to sealing the sale of their Heyfield native sawmill for AU$35 million. They’ve also just put their woodchip facility at the Port of Portland up for sale with analysts valuing the asset at around AU$75 million. To counter the positive, we've included a just a small dose of the negative. We've got one mill in the lower South Island of NZ likely to close. We also have a couple of stories relating to activists and their recent actions. We don’t normally give this too much coverage as they get more than their fair share from the mainstream media. These stories though will I think be of interest to our readers. The first is a new tactic being used in Australia where phony store tags are placed on furniture in stores. Unwitting customers are being urged to use their smartphones to scan a bar-code and then they’re directed to a YouTube video containing the anti-forestry or anti-native timber message. The second is an interesting turn in the US where environmentalists who up until recently were putting all of their support behind bioenergy projects. They’ve now done a U-turn and are opposing biomass projects suggesting that microscopic nanoparticulates created by incinerating wood waste are now a health hazard to the community. The industry is of course putting up all the same arguments that were used by the environmentalists six years ago. Biomass projects are an opportunity to recycle dangerous timber debris that have in the past caused wild fires, they create renewable energy, produce electricity for homes and businesses, and create much-needed jobs in struggling rural communities.
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Aquaflow ready for next generation biofuels refiningKiwi clean energy company Aquaflow Bionomic Corporation believes it is poised to make refining next generation biofuels a commercial reality in New Zealand and in overseas projects within three years.Aquaflow announced this week that it has executed a technology cooperation agreement with CRI Catalyst Company (CRI). CRI has exclusive global sublicensing rights to IH2 technology, a commercially viable renewable fuel process developed by Gas Technology Institute (GTI), which is ready for infrastructure investment. The companies had been working together previously under a Joint Testing and Evaluation Agreement to bring together Aquaflow’s unique capability with algae, mixed and varied feedstocks, and CRI’s license to IH2 technology, to prove their commercial effectiveness in producing hydrocarbon fuel. Aquaflow director Nick Gerritsen explains “Aquaflow believes it now has a world-leading multi-biomass to biofuels capability and technology offering. This is a robust and highly integrated technology package which can leapfrog other biomass to biofuel technologies because it goes straight to blended fuel stock and avoids intermediate pathways. “We believe this is a game changer. The current estimation of the IH2 process economics suggests it to be among the most economical for renewable hydrocarbon fuel production. The combination of Aquaflow multi-biomass feed and CRI IH2 technologies means that any biomass – algae, wood waste, agricultural waste such as vine prunings, invasive weeds like gorse or broom and solid waste, can be turned into renewable transport fuels.” More >> Gunns wood chip facility to be soldGunns is looking for a buyer for its export woodchip facility at the Port of Portland between Melbourne and Adelaide, pledging to use the proceeds to repay loans. The timber company is under increasing pressure to pay off some of its AU$580 million debt burden. Its shares remain suspended while it finalises a planned AU$400 million capital raising.'There's an orderly (sales) process happening,' a Gunns spokesperson said on Friday. The spokesperson said Gunns had originally expected that the Portland facility would be used as a transit point for woodchips from the 'green triangle' in Victoria and South Australia to be sent to feed the pulp mill in Tasmania. However, Gunns now believed that there was a sufficient source of woodchips available in Tasmania. 'So the strategic benefit of the port is now less,' the spokesperson said. Sources suggest Port of Portland will fetch at least two to three times the AU$25 million Gunns spent to construct the facility in 2009-10, implying a sale price of up to AU$75 million. About $25 million in capital expenditure is also required to expand capacity. Its location is attractive because Port of Portland is ideally positioned for export to Asia. Itochu indulges its appetite for pulp In the latest foreign investment by Japan’s voracious trading companies, Itochu Corp. has announced that it has paid US$617.5 million for a 24.9% stake in a Finnish pulp company reports The Wall Street Journal. The move will boost by nearly 50% Itochu’s shipments of pulp, which is used in making paper products, and solidifies the company’s position as the world’s biggest pulp trader.The deal will make the Japanese trading house the second-largest shareholder in Finnish pulp maker Metsa Fibre, the world’s fifth-largest pulp producer. Parent company Metsa Group of Finland will retain 50.2% while board maker M-real and Itochu will have equal stakes of 24.9%. The agreement needs to be approved by European antitrust authorities and is expected to close by the end of June, according to a statement released by Metsa Fibre. With the agreement, the Japanese trading house will be able to move an additional 1 million tons of pulp, boosting its global market share two percentage points to 6%, according to a company spokesman. Itochu, which boasts the top share in the world’s pulp market, handled 2.15 million tons last year. Japan’s seven major trading houses spent a total US$37.08 billion last year on investments and acquisitions – much of it overseas. Itochu spent the most, putting down $11.58 billion on 57 deals, according to research firm Dealogic. $5 million cardboard cathedral for Christchurch
The Anglican Church this week revealed plans for a cardboard cathedral in Christchurch. A $5 million cardboard cathedral designed by a top Japanese "paper architect' will be built as a temporary replacement for the quake-demolished Christ Church Cathedral.While debate rages over the decision by the Anglican Diocese of Christchurch to demolish the crippled city centre landmark, work will start on the temporary A-frame building in nearby Latimer Square next week. Constructed with cardboard tubes, timber beams, structural steel, and concrete, it is expected to last 20 years and will become the new place of worship for the city's St John's parish, whose church, vicarage and hall had to be demolished after the February 22 shake. The church said that the capital cost for the new cathedral, as well as supporting buildings, has been estimated at $4m to $5m. Completion of the build is expected to be sometime in November. Source: ODT North American wood pellet exports reach record highExports of wood pellets from North America to Europe reached a record of over two million tons in 2011, according to analysis reported in the North American Wood Fibre Review. Pellet exports from North America to Europe reached a new record high in the 4Q/11. Shipments have increased practically every quarter for four years, up from 130,000 tons in the 1Q/08 to almost 600,000 ton in the 4Q/12, according to the North American Wood Fibre Review (NAWFR).Export data collected by NAWFR from exporters and customs information in both North America and Europe show that wood pellet shipments reached just over two million tons in 2011, up almost 300% from 2008. Pellet producers in British Columbia have been the major exporters since the first shipments 12 years ago but this changed in the second half of 2011 when expanded investments in new capacity in the US South put US shipments on par with Canada. Six pellet export plants, widely varying in capacity, are now operating in the U.S. South. Four others have shipped trial shipments the past six months and six additional export oriented pellet plants have been announced, making it highly likely that there will be significant export growth over the next 24 months. In 2012, small increases in volumes from both the U.S. and Canada will likely occur, with more significant export growth due in 2013. At that time, new export-oriented pellet plants now being constructed are scheduled to begin operations. On the receiving end of pellet exports to Europe, utilities in the Netherlands, the UK, and Belgium continue to be the largest consuming destinations of North American pellets with the UK showing the steadiest and most vigorous growth. Source: Wood Resources International LLC, www.woodprices.com
Strength and stiffness assessments to improve lumber gradingSome recent research has just been completed which was designed to provide the Australian structural Radiata pine processing industry with some indications for improving stress grading methods and/or technologies. The aim was to give an increase in structural grade yields, and significantly reduce processing costs without compromising product quality.To achieve this, advanced statistical techniques were used in conjunction with state-of-the-art property measurement systems applied to the same sample of sawn timber. Acoustic vibration analyses were conducted on green and dry boards. Raw data from existing in-line systems was captured on the same boards. The Metriguard HCLT stress rating system was used as the “reference” machine grading because of its current common use in the industry. A WoodEye® optical scanning system and an X-ray LHG scanner were also able to provide relevant information on knots. Reductions in non-structural dry volumes can be achieved from this research. Details and the full report can be viewed here.
Hart’s CHH netted US$38.6M in forestry saleCarter Holt Harvey, which reportedly refinanced $1.45 billion of debt last year, sold forestry assets near Tokoroa for some US$38.6 million, according to the purchasing company’s financial statements.Te Waihou Plantations, a subsidiary of GTI 9 Investment Acquisition Co which is managed by US-based Global Forest Partners, purchased US$38.6 million of forestry assets in the 14 months ended Dec. 31, according to statements filed with the Companies Office. The company was incorporated on Nov. 15, 2010, and had no forest assets at the start of its balance date. During that period, it bought some 17,300 hectares of land, made up of 18 blocks near Tokoroa, from Carter Holt Harvey HBU for an undisclosed sum. Te Waihou will acquire the land progressively as the existing trees were harvested under forestry rights held by a third party, according to the Overseas Investment Office consent for the purchase in February last year. More >> State of Origin extra for Wood Preservation 2012
It looks like Wood Preservation 2012 running in both New Zealand and Australia in mid-May is drawing in most wood treaters from both countries. Last run in 2009, this independent technology programme will be outlining new tools, new technologies, new formulations and some of the trends being seen outside of this region that will have an impact on the future operations of local wood treatment companies.In Australia, we have had an increased interest by those attending. Why? The 2012 Harvey Norman State of Origin Rugby League Series will kick off at Melbourne's Etihad Stadium on 23rd May. Coincidentally, this coincides with Wood Preservation 2012. Instead of a conference dinner on the first night of the Melbourne event, Wood Preservation 2012 delegates will instead be going to the game. “From all our programmes that we run for Australasian wood products companies we’re told that networking is an essential part of events like this” says FIEA Director, Brent Apthorp. “What better way is there for those involved in wood treatment about Australia to get-together after a full day of technology updates?” Block bookings of 70 seats have been made and a large chunk of these have already been taken. If wanting to secure the last few remaining tickets, please look at registrations ASAP to avoid missing out. Programme details and registrations details can be found on www.woodpreservationevents.com and remember, TPAA along with all FIEA members receive special discounts off all conference registration rates in Australia. FIEA, WPA and PMA members can also access discounts to the NZ leg of this technology series. Activists use new timber protest toolEnvironmental activists are targeting retail giant Harvey Norman with phoney store tags on furniture items to trick customers into watching anti-logging messages reports the Mercury this week. The "Aussie Furniture Blitz" tags urge customers to scan a barcode-like panel, called a QR code, with their smartphones "to find out how you can win".Once the tag is scanned, customers are directed to a YouTube video, which claims furniture from Harvey Norman stores is built using timber from high conservation value forests in Tasmania, New South Wales, Victoria and Western Australia. Environmental group Last Stand is behind the campaign. Source: themecury.com.au Nelson Pine shortlisted for energy awards
The awards are run annually by the Energy Efficiency and Conservation Authority, which works to implement government strategies for energy efficiency, conservation and renewable energy in both the private and public sectors within New Zealand.Nelson Pine Industries processes 40% of the Nelson harvest of radiata pine into GoldenEdge MDF (Medium Density Fibreboard) and NelsonPine LVL (Laminated Veneer Lumber). The company is on the shortlist for the large business and energy management category. EECA reports there were around 90 entries this year, which judges said were of an extremely high standard overall. NPIL CEO Chris Turner says the company has worked with Electricity Commission support to make the savings. “The Commission brought in the concept of working alongside companies like NPIL after research showed it would cost government half as much to help industry to introduce energy efficiencies, as it would to build new power stations,” he explains. “We started with an EECA Energy Audit in 2009 that was the basis for a site wide energy reduction project. By optimizing both the motor system and heat system we have reduced electricity and wood fuel through measures such as encouraging staff to be more aware of turning systems off when not in use, through to capital investment in Variable Speed Drives as an energy saver on our drier fans and pumps, and other measures such as modifications to the compressed air system.” Mr Turner estimates NPIL is now saving $500k annually on its electricity account. More >> Police turn to wood carvingKevin McCardell used to be a NZ policeman, now he is a wood sculptor carving out commissions. Check out the interview and some of the pieces he has worked on by clicking here.Gunns closing AU$35m deal for Heyfield millGunns Ltd. is about to close the sale of its Heyfield native timber sawmill in Victoria, Australia, to a national timber wholesaler for AU$35 million according to the Australian Financial Review.Mortim (Australia) Pty. Ltd. has agreed to buy the sawmill, according to sources, but the sale is not yet final, although it had been due to close in December 2011, reported the article, summarized by Stock Journal on 17 April. Based in the Melbourne, family-owned Mortim Australia is a national wholesale distributor of softwood and hardwood building and manufacturing products with distribution outlets in Melbourne and Adelaide, its website states. Now biomass is the environment's enemy? When environmental organizations pushed Washington voters to approve their renewable energy Initiative 937, they touted biomass energy — incinerated wood waste — as one of their preferred alternatives to fossil fuel.They reasoned that biomass energy plants would help clear forests of flammable wood debris from dead and diseased timber, put idled loggers and millworkers back to work and produce cleaner, more affordable energy. But since voters narrowly approved the initiative in 2006, many of those same activists are battling against biomass projects. They now claim that microscopic nanoparticulates created by incinerating wood waste are a health hazard, even though those plants have been approved by government agencies. They want to block all proposed biomass projects until nanoparticulates are fully investigated and the EPA can promulgate regulations. That could take years, but that’s OK with opponents because by then the plants will have been cancelled because of indecision and delay. Source: Courier Herald Southern forestry company mothballing manufacturingCity Forests in the lower South Island, New Zealand announced yesterday that they’ll be considering mothballing their Milburn wood processing operation just north of Milton. Established in early 2006, the operation was set up principally to supply high quality clear boards from the company’s pruned forests to the US housing market. Since that time there has been a significant and well documented decline in both house building and general economic activity in America, Australia and New Zealand.In addition, returns from exports to Asia, particularly China, have been impacted by competition from North American mills and the high value of the NZ dollar. Thirty one staff are employed at the Milburn plant. The proposal to mothball the processing operation doesn’t impact substantially on the management of the company’s significant forest estate. Jobs
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...and one to end the week on...older age
Perks of reaching 50 or being over 60 and heading towards 70 : And on that note, have a great and safe weekend. For those who follow league, remember the trans-Tasman test between the Kiwis and Kangaroos plays out at Eden Park this evening. The last time the Kiwi's won the Anzac test was back in 1998. It's being a while so go the Kiwis. Brand PartnersOur Partners & Sponsors Friday Offcuts is made possible through the generous support of the following companies.
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