Friday Offcuts 27 April 2012
Amidst the rubble and devastation of bricks and mortar around the city, light weight timber construction came through the quakes remarkably well. In a story this week we’ve attached a paper that reviews just how engineered timber structures using glue laminated (glulam) and laminated veneer lumber along with engineered timber tanks from the two major earthquakes stood up.
The case for wood as the building material of choice is pretty compelling. On top of all the environmental advantages of using wood in the city’s rebuild, past performance and more importantly, safety are the prime reasons why the industry is continuing to push its case to the relevant authorities, commercial and residential property developers, investors and homeowners in Christchurch.
In Australia, the CRC for Forestry has just produced a bulletin for the industry that assesses the performance of different feller buncher heads from harvesting operations in eucalypt pulpwood plantations. Check out the results – and grab yourself a copy of the report.
On the international stage, our monthly log price information points to an increase in NZ log exports in February to all major destinations, China, South Korea, India and Japan, with a big jump recorded into India. As well as logs, the growth of India as a wood market destination - for logs and softwood lumber - is also covered in another story this week.
Finally, Wood Preservation 2012 is shaping up to be another major gathering for all those involved in wood treatment about Australasia. Starting in three weeks’ time in New Zealand - and the following week for Australian companies - we've already have 170 registered for this latest in the FIEA technology series. If planning to attend (the last event was three years ago), remember to register on www.woodpreservationevents.com
This week we have for you:
Elder’s pulpwood forestry assets soldElders has announced that it has signed agreements for the divestment of the large majority of its pulpwood forestry assets in the Albany, Bunbury and Green Triangle regions to investment funds managed by Global Forest Partners (GFP).
The agreements, which are subject to a number of conditions, provide for the sale of approximately 12,400 ha of land as well as Elders-owned standing timber in those regions and its woodchip export facility at Albany. The agreements also provide for the conditional sale of some MIS grower-owned standing timber in those regions.
Net cash proceeds to Elders are expected to be realised progressively and, subject to completion, to exceed AU$45 million. The gross sales value is undisclosed, but is expected to approximate book value.
Elders Chief Executive Officer Malcolm Jackman said that agreements with GFP represented a substantial advance in the Company’s program to release capital from its forestry operations. “Today’s announcement, which encompasses some 12,000 ha of forestry land and the Albany port facility, represents the cornerstone transaction in the staged divestment of the Forestry business we announced in October. We now have sales or sales agreements in place for nearly two-thirds by area of the freehold land that we have targeted for divestment.”
GFP, a US Securities and Exchange Commission registered investment advisor specializing in the structuring and management of sustainable forestry investments, has been actively investing in Australia on behalf of its investor clients since 1999 and currently has over AUD 3 billion in forestry assets under management worldwide.
From Elders’ perspective, completion is targeted to occur, subject to satisfaction of a number of conditions precedent, by the conclusion of the June quarter 2012. The agreements signed with GFP will bring the total amount of forestry land that Elders has sold or contracted for sale since it announced its intention to withdraw from Forestry to a total of 32,000 ha.
New Zealand Log Prices - April 2012New Zealand’s total log exports to the world in February were up for the first time in three months. Exports to all our major destinations, China, South Korea, India and Japan, were up in February. With an almost 100% increase in exports to India on the month before.
The market is in a reasonable state of balance with China softwood inventory on the ports at around 2.9Mm3, or around 60 day’s supply at current off-take levels. This level of inventory is still too high to create upward pressure on CFR pricing in the short term, but any further significant fall in inventory will push US$CFR higher.
Export volumes from New Zealand are being maintained, so less supply from North America is required to see the price move up. North American volumes are similar to 2011, but increased domestic demand and pricing combined with lower export prices versus 2011 should combine to reduce North American supply to lower levels than 2011 and provide for a mild market recovery over the balance of 2012. Prices are not forecast to move up quickly, as should they do so then additional volume can quickly be motivated.
There is still too much volume on wharves in China. Until stocks reach 2 months usage the price will be under pressure. However, there is news that stocks are falling. Adding to this are reports that volumes to China from the Pacific Northwest could be falling significantly.
It is expected that export log prices may improve later in April. Demand for volume in China and India is still at reasonable levels. If the dollar continues around 0.82, export market volumes stay down and log sellers refuse to move from Chinese prices expect a lot more sawmills and processing operations to struggle.
The Agrifax Log Price Indicator is again down this month. All North Island regions showed either a drop or no change in log prices. While in the south there was more of a mix with some gains across both export and domestic grades. The combined grades and regions indicator drop this month was again a subtle shift and not a dramatic shift that rocked the boat as it did late last year.
Even the rapid rise in shipping cost was expected by most exporters this month. Although any further lowering of export prices coupled with any further gain in shipping will be hard to swallow. Low prices with low cost shipping is bearable but not low prices and high shipping costs.
The Agrifax log price data is a weighted average of prices collected each month from a range of New Zealand log buyers and sellers. Log prices shown in the table will vary regionally and by supplier and should only be used to provide a broad trend of log price movements.
Timber structures in the Canterbury earthquakesThe September 2010 and February 2011 earthquakes in Canterbury, New Zealand resulted in significant ground excitations that caused severe geotechnical effects and widespread structural damage. A new paper outlines the various forms of damage to different types of engineered timber structures, including timber water tanks.
Details of the earthquakes including severity and seismological aspects are described by others. This paper includes engineered timber buildings using glue laminated (glulam) and laminated veneer lumber (LVL), and engineered timber tanks. Domestic house construction is only included to show some unique performance characteristic of timber building components used in residential applications. A full evaluation of the performance of houses during the 2010 earthquake and the 2011 earthquake are provided in other publications.
Most of the damage resulted from lateral spreading and high levels of horizontal and vertical ground acceleration. The response of these building types is discussed. Engineered timber structures generally performed well both for life safety and serviceability, with most buildings ready for occupation within a short time following the events. The full paper can be viewed here.
For full details on this and other stories, check out the latest R&D Works Newsletter
Farming group highlights overseas forestry investmentThe NZ Federated Farmers has used the Crafar Farm sale to highlight the loss of productive agricultural land in New Zealand. President Bruce Wills says the sale causes a minimal threat to New Zealand agriculture, when compared with the expansion of forestry.
He says 13,000 hectares of dairy land have been sold to foreign buyers since 2002, but in the same period, 1.78 million hectares of forestry have been sold to overseas investors.
Mr Wills says the debate about foreign investment in farm land needs to be extended to all land types. He says more than 70% of New Zealand's forests are now owned offshore.
Source: Radio New Zealand
Indian imports show early stages of rapid growthTrade data from the U.S. for 2011 show an exciting trend: the value of softwood lumber exports to India grew eightfold over 2010. This leads to the question: Will India become the next China?
The simple answer: not yet. While North American exports to India spiked in 2011, the overall Indian import trend (multi-year and multi-country) has been slower. In addition, 2011 growth was from a very low level, both compared to softwood exports to other Asian countries and compared to other wood products exported to India. Even if a high level of growth is sustained (and it is not yet certain that it will be), it could take many years of rapid growth before Indian softwood imports are comparable to those of other countries in Asia.
India imported about 60,000 m3 (approximately 40 million bf nominal) of softwood lumber in 2009 and 2010, and is projected to more than double its imports to about 130,000 m3 (80 million bf nominal) in 2011. However, according to Indian government statistics, softwood lumber accounted for slightly less than 1% of the total value of Indian solid wood imports in 2010. Additionally, the level of Indian softwood imports is still orders of magnitude lower than softwood imports into other Asian countries, e.g., China, Japan, South Korea and Taiwan. Indeed, Japanese softwood lumber imports for 2011 are on track to be fifty times those of Indian import levels, and Chinese softwood lumber imports are over one hundred times greater.
There are many reasons why India imports less softwood lumber than other parts of the world. First, wood-frame housing is uncommon in India, as in most Asian countries. Second, India traditionally uses much more hardwood than softwood in construction and industry. Hardwoods make up the majority of domestic and regional commercial tree species, with the preferred species being teak because it stands up well to termites and is preferred in furniture. Temperate softwood species are less familiar to Indian builders and furniture makers, and as such are much less popular at this time. Third, India imports about 84% of its wood volume as logs, due both to the competitive advantage of manufacturing in India (similar to China) and the structure of its import tariffs. Finished products have higher rates than raw materials; for example, total lumber tariff rates are currently 14.712%, while log tariffs are 9.356%.
Softwoods have made inroads into the Indian market in low-value applications such as concrete formwork (known as “shuttering”; figure 2). New Zealand holds about 90% of this market by volume, shipping an estimated 1.4 million m3 of logs and 34,000 m3 of lumber in 2011. As for softwood lumber, other notable exporters include Germany, Brazil, the U.S. and Canada. According to Indian statistics, Tanzania (traditionally known as a hardwood exporter) has also begun exporting softwood lumber to India. FAO statistics illustrate a similar trend.
When examining Indian softwood lumber imports, wide swings can be seen between exporting countries from one year to the next. New Zealand had the lion’s share in 2009–10 (April 2009–March 2010), passing the baton to Germany in 2010–11 and then to the U.S. by mid-2011. With the relatively small import volumes at stake, one could (cautiously) surmise that Indian exporters are “bargain shopping,” and that exporters are also constantly shifting their low-value products to the most profitable markets.
Indian imports are expected to grow steadily in 2012 and beyond, but probably not at the frenetic pace observed at the beginning of 2011. The Q2/2011 Indian housing surge cooled in Q3 when the Reserve Bank of India (RBI) increased interest rates. The Indian rupee declined by 7% against the U.S. dollar in November, and by a total of 14% for 2011. If the currency remains low (as it has so far this year), the decline will act to slow imports.
Looking farther ahead, there are good reasons to watch for market growth in India: its GDP is expanding at a rate of about 8% annually (although it slowed in 2011); and the country has a young and rising population. Like China, India is also short of domestic timber. Softwood lumber imports have grown by over 50% per year (on average) for the last five years.
Even with such a rapid growth rate, however, India still has a long way to go before it catches up with China in terms of softwood lumber imports. Currently, 72% of India’s population lives in rural areas; urban housing starts are 1.23 million units per year on average (as compared to about 15 million in China). Starting from current import levels, if India’s rate of growth were to continue at a pace of 50% per year, by 2020 it would reach approximately five million m3, around the level China reached in mid-2009. This estimate is likely too aggressive, as growth has not been consistent and much is still unknown.
Source: International Wood Markets Group, www.woodmarkets.com
Wooden you like a wooden Merc?In some ways, it must be nice being rich. You can afford luxury travel, holidays, and the little things that make life worth living — like this full-scale replica of a 1955 Mercedes 300SL Gullwing carved out of teakwood. What… what was that again?
For only 5,850 Euros (at the time of writing) — or roughly $7,500 — you too could own this rather unique hand carved effort. The doors work, the wheels roll, but I’ve got little doubt that this wouldn’t be road legal. For more photos check out www.gizmodo.com.au
China to increase pulp, paper manufacturing by 30%China is renewing its pulp and paper manufacturing and will increase production by 30% over the next five years. Finpro is cooperating with the Federation of Finnish Technology Industries on a project to bring Finnish pulp and paper expertise together and take it to the Chinese market.
"The Chinese Paper Association has proposed that we bring Finnish pulp and paper technology expertise together into a single entity. Investments of up to EUR 40 billion will be made to acquire an estimated 30-50 new paper machines and modernize dozens more," says Hannu Kivelä, Finpro's Head of Industry, Forest Industry and Bioenergy.
China will be renewing its paper manufacturing over the next five years and will increase paper production capacity by approximately 20-30 million tons. Total paper production in China was about 93 million tons in 2011 compared to Finland's annual production of 12–15 tons.
Changes due to increasing demand and environmental requirements. "Investments have been accelerated by stricter requirements concerning energy efficiency, emissions reduction, and water consumption combined with quality and efficiency targets. Rather than building new factories, China is modernizing old production lines and building new ones in conjunction with existing factories," explains Kivelä.
"Large Finnish forest industry companies already have a presence in China, but now we're opening the door for small and medium-sized companies to enter the Chinese market. Although paper and pulp production is growing primarily in Asia and South America, technology export is a chance for Finnish companies to turn the market change to their advantage," states Kivelä.
Greenheart steps up China effortGreenheart Group Limited has appointed Green Timberland, a New Zealand incorporated company specialising in softwood sales in China, as its non-exclusive sales agent for the sales and marketing of New Zealand softwood for Greenheart in China. Mr Matthew Kim, Managing Director of Green Timberland, will work closely with Greenheart’s softwood sales team to further strengthen Greenheart’s sales efforts, local market presence and manage the customer relationships in China.
Mr Kim is a New Zealand national with over 10 years of experience in softwood sales in the Asia-Pacific region. He will initially focus on Shanghai, where he has been developing his softwood sales network since 2006, managing the sale and marketing of Greenheart’s radiata pine and collecting key market intelligence. Mr Kim graduated from the University of Auckland and speaks fluent English, Mandarin and Korean.
Mr Andrew Fyfe, Chief Operating Officer for Greenheart said, “China is a key market for our radiata pine from New Zealand where we are continuing to grow our operations and harvesting volumes. With Matthew now as our sales agent in China, we can leverage on his unrivalled knowledge of the China softwood market to grow and create new sales opportunities of our New Zealand radiate pine as well as increase our global sales capacity to penetrate other new markets.”
US WoodWorks program moves to next levelThe Wood Products Council (WPC) has announced that Adrian Blocker has been appointed President and Chief Executive Officer of the U.S. WoodWorks initiative—a program aimed at encouraging architects, engineers and others to use more wood in non-residential and multi-family buildings and making it easier for them to do so.
“The creation of a full-time President and CEO position reflects the transition of WoodWorks from a pilot to mature national program,” said Christopher McIver, Chair of the WPC board and VP West Fraser. “The pilot demonstrated that success is achievable; now it’s time to take the program to the next level. Adrian has a long history as a leader in the forest products industry and we’re excited that his experience and vision will be brought to bear on WoodWorks during its next critical phase.”
Volume losses from different feller buncher headsThe CRC for Forestry in Australia has produced a bulletin examining volume losses when using different feller buncher heads. Bulletin 22 of March 2012 was compiled by Martin Strandgard (University of Melbourne) and Rick Mitchell (CRC for Forestry).
The bulletin compared shear, hotsaw (continuous disc saw) and chainsaw felling heads operating in Eucalyptus nitens and globulus pulpwood plantations. The research compared the heads in terms of estimated volume and value lost in stumps and saw kerf during harvesting. Other aspects such as productivity, site impacts and fire risk were also considered.
The results showed that using shear heads can recover more volume and value per hectare than the other feller buncher heads due to lower stump heights and a lack of saw kerf. Chainsaw heads were better suited to larger trees and stands producing sawlogs. The value lost (in Australian dollars) per hectare due to stumps and saw kerf, assuming a yield of 230 m3 per ha and stumpage of $30 per m3, was $251 for the chainsaw, $203 for the hotsaw and $16 for the shear.
The bulletin also discusses the disadvantages and advantages of using the three types of feller buncher heads. Please contact Mark Brown at email@example.com for a copy of the bulletin. Source: Logging On
Another extension of Gunns tradingGunns managing director Greg L'Estrange told the Australian Securities Exchange on Monday that the company wanted a further suspension of trading to finalise the detail of its proposed equity raising and the documents to go with it. It has been the same reason given for recent market updates after the company successfully sought a trading halt late last month. The company will provide a further update to the market on 30 April and it's expected that this update will provide information regarding the timing of the equity raising he said.
Laser un-printers could help save the treesHere’s some interesting research. If you're concerned about deforestation, you likely blue-bin the no-longer-needed sheets of paper that have been run through your printer. You should keep in mind, however, that even though the recycling of that paper saves trees, the process still requires considerable energy, and most recycled paper still contains some virgin wood pulp.
What would be better is if there were an "un-printer" that took the toner off of the used paper, so you would be left with a blank sheet that you could reuse. Well, thanks to research being conducted at the University of Cambridge, there soon may be. The research was conducted by Dr. Julian Allwood, Leader of the university's Low Carbon Materials Processing Group, and PhD student David Leal-Ayala.
The pair started with regular Canon copy paper, which had text printed on it in HP Laserjet black toner. With assistance from The Bavarian Laser Centre, they then used a total of ten experimental set-ups, to see if lasers could be used to vaporize toner print from paper. Various intensities and pulse durations of laser light were tried, with spectra including ultraviolet, visible and infrared.
They concluded that lasers can be used for toner removal, without causing significant damage to the underlying paper - after the process has been repeated several times on the same sheet, however, some deterioration does occur.
Additionally, they estimated that if toner removal was commonly carried out in most workplaces, the emissions produced by the pulp and paper recycling industry could be reduced by at least 50 percent. The need for paper production processes including forestry, pulping, paper-making and paper disposal would also be greatly reduced.
"What we need to do now is find someone to build a prototype," said Allwood. "Thanks to low-energy laser scanners and laser-jet printers, the feasibility for reusing paper in the office is there."
Source: University of Cambridge via New Scientist
Support for Australian certification event
The first Certification: Growing demand. Increasing confidence. National Wood Products Forum & Workshop 2012 planned for Sydney on 31 May 2012 aims to look beyond systems to promote the future of certification in Australia.
The effects of environmental concerns are changing the way Australians do business and this is especially evident in the built environment. Green Star ratings and other systems are becoming increasingly important to everyone from merchants and purchasing officers to architects and developers. Similarly, in the wood-based products sector, paper goods brands are demonstrating a growing awareness of the source of materials.
This event presented by Planet Ark’s Make It Wood campaign will explore strategies to increase the awareness and uptake of certification and identify impediments to its adoption. For further information visit
Buy and Sell
...and one to end the week on...senile seniors?
Couple of quick ones to end the week on.
And on that note, have a great weekend. Cheers.
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