Friday Offcuts – 15 June 2012
Rather than examining tools that can be used by local companies to improve their operating efficiencies, this innovative new programme will be showcasing some of the very latest product innovations from around the world. The focus will be on new products that have been commercialised and could be adopted by forestry and wood products companies in Australasia – from solid wood – through to panel products. In addition to profiling new opportunities for local companies to fine tune and diversify their own operations, the two-day programme will be highlighting R&D organisations around the world that are undertaking research of direct relevance to local companies. Further details on the new Wood Innovations event can be found in the story below – and programmes for both New Zealand and Australia can now be downloaded directly from the event website, www.woodinnovationsevents.com This week in New Zealand the not-for-profit organisation, Pure Advantage released their eagerly awaited report, ‘New Zealand’s Position in the Green Race’, that ranks the country’s position in the global green economy. In short it says New Zealand needs to improve its act but it does put forward a number of ideas for encouraging green economic growth. Of immediate interest to those in the forestry industry is the highlighting of renewable energy – and in particular bioenergy – to New Zealand's future energy mix. Pure Advantage's belief is that while the optimal situation to encourage green economic growth should be government and the private sector working together, in the absence of government leadership, it recommends that industry needs to take the lead. The report is a pre-cursor to a macroeconomic review that Pure Advantage has commissioned, the first of its kind in New Zealand, to identify New Zealand’s key high value green growth opportunities which is due to be released in the third quarter of 2012. Details of the report – including a link to the full report can be found in the "Global Green Race" story below.
This week we have for you:
New Russia-China fund eyes forestry dealA multibillion-dollar investment fund set up by Russia and China is expected to make its first investment, into a Russian forestry company, as economic ties between the neighbouring countries grow closer reports Reuters.Plans for the fund - a venture between sovereign wealth fund China Investment Corp and the state-backed Russian Direct Investment Fund - were announced in October. The fund was unveiled during a visit by Vladimir Putin, who is making his first trip to Beijing since his return to the Russian presidency. The first investment is expected in the next month and is likely to be into one of Russia's largest forestry firms, which exports a substantial amount of wood to China, Kirill Dmitriev, CEO of the Russian Direct Investment said. It will aim to allow the forestry company to make higher-margin processed wood products in Russia, which it can export. Dmitriev declined to name the company. A source close to the deal said that an initial investment could be around $200 million for a minority stake. The RDIF was created to give major foreign investors greater comfort in Russia's uncertain business environment and is investing with private equity, strategic investors and sovereign wealth funds. It is separately investing alongside China. Source: Reuters NZ’s position in global green race highlightedPure Advantage, the not-for-profit organisation developing a green growth strategy for New Zealand, this week released a significant report into New Zealand's position in the global green economy. It details how New Zealand is currently lagging behind the rest of the world and how industry can encourage green economic growth to ensure a greener, wealthier future for all New Zealanders.Entitled ‘New Zealand’s Position in the Green Race’, the report examines the global green race and provides an appraisal of New Zealand’s environmental performance across a range of parameters. This report is the first step in Pure Advantage's process and is designed to be a conversation starter about the potential opportunities for New Zealand in energy efficiency, renewable energy, and the broader green economy. The report explains how green growth is a path to improved economic performance, better paying jobs, the protection of our environment, and improved health outcomes for New Zealand. Interested parties can find out more by downloading the full report at www.pureadvantage.org. More >> Carbon offset market hits 3-year high
The market for voluntary carbon offsetting hit a three-year high in 2011, transacting more than $576 million of offsets, second only to 2008’s record $776 million. This finding comes from the latest “State of the Voluntary Carbon Markets” report, released last week by the Forest Trends’ Ecosystem Marketplace initiative in partnership with Bloomberg New Energy Finance. Among the report's most surprising findings are a significant increase in demand from buyers in the US and major changes in the mix of offsets capturing market share, such as record sales of offsets from Asian wind farms and the coming-of-age of clean development projects in Africa. In 2011, corporate buyers continued to dominate the market, contributing $368 million – or nearly 65% – of the market’s total value, with European corporate buyers remaining the largest source of voluntary offset demand. Many corporate buyers used offsets to meet sustainability targets and “green” their supply chains, while others used them to connect with consumers and employees. “The markets’ increase in value points to a continued demand, especially on the corporate front, for voluntarily offsetting emissions,” said Katherine Hamilton, Director of Forest Trends’ Ecosystem Marketplace initiative. “Some of our more interesting findings, however, are in the composition of the market, which continues to develop new dimensions on both the supply and demand fronts.” One of those surprises came from the United States, which emerged as the world’s largest single-country buyer of voluntary offsets despite the lack of impending regulations that had previously sparked demand from companies looking to get a leg up on the law. “Price sensitivities drew some buyers away from the more expensive forestry sector – which nonetheless contributed the highest value to the marketplace because their projects held their own in terms of price,” said Carbon Program Manager Molly Peters-Stanley. The very latest on carbon trading and options for forestry will be the focus for forestry and investment companies at Australasia’s Carbon Forestry 2012 event planned for Auckland on 22-23 August 2012. Programmes were direct mailed this week and a copy of the Carbon Forestry 2012 programme can be viewed here. Source: Click Green Gunns looks to complete woodchip facility saleGunns is in discussions with the preferred bidder for the sale of its Port of Portland woodchip facilities as the troubled timber company races to finalise a deal ahead of a June 30 deadline, the Australian Financial Review reports. Sources suggest Port of Portland will be sold to a Global Forest Partners (GFP) subsidiary, Australian Blue Gums, and may fetch two to three times the AU$25 million Gunns spent to construct the facility in 2009-10.This implies a sale price of up to AU$75 million, delivering much needed cash for the company. About AU$25 million in capital expenditure is also required to expand capacity. Its location is attractive to buyers because Port of Portland is ideally positioned for export to Asia. GrainCorp and South West Fibre (a joint venture between Midway of Geelong and Japan's Mitsui) operate the other woodchip facility at the port. The Australian Competition and Consumer Commission's informal review into its desired purchase was recently terminated. Source: Queensland Country Life
Top Australians in Queens Honour’s ListCongratulations go this week to two outstanding Australian forestry leaders, both who have had links in their distinguished careers to Forest and Wood Products Australia as well as numerous Forest Industry related Boards and Councils. Glen Kile (previous MD in 2007-2008 and a Director for five years) and Ian Fergusson (FWPRDC Director) were both awarded AM's in this year's Queens Honour's List. Citations on their long careers and service to the forestry industry and wider community are attached here.Wood innovations to improve international competitiveness
Globally, manufacturing is the largest investor in applied research and innovation. It’s also a key driver of productivity improvement. The spill over effect is also critical for the remainder of the economy. Each job in manufacturing generates on average between 2 and 5 additional jobs. Processing or manufacturing in the forest products sector though is increasingly coming under pressure. Traditionally local companies have been very good at process innovation. How to squeeze as much as possible out of existing manufacturing operations is second nature to most companies. The focus has been on improving product recovery from fibre inputs in order to lower operational costs, reduce delivery time or increase flexibility. To improve competitive advantage against competing non-wood products, the industry is looking more closely at its product innovations and business systems. Our capacity to create and capture high value and niche manufacturing is essential to the future well-being of the sector. Science, research and technology are central to this. Wood Innovations 2012 is a new technology programme being set up with a wide cross section of Australian and New Zealand companies to address some of these concerns. “It’s a new initiative and it’s been a long time coming” says Brent Apthorp, Director of the industry grouping, the Forest Industry Engineering Association (FIEA). For over 13 years FIEA has been working with wood producers to design and run a wide range of technology events for the sector, both in Australia and New Zealand. “The focus has been more on step change – in profiling new tools and technologies that can be adopted by local companies to improve their processing and manufacturing operations”. Wood Innovations 2012 has quite a different focus. “It’s designed to provide a global insight into new innovations, new wood products and new business systems that can be employed to attract future investment and to increase their international competitiveness” says Mr Apthorp. “The very latest in new and emerging technologies in: - solid wood - panel products - bio-materials - wood finishing systems - wood modification technologies - building materials and construction systems that potentially can be picked up by local companies – will be the event’s focus. We’ve also identified leading R&D organisations undertaking ground breaking research in each of these areas – who have or are in the process of commercialising these new products”. To date, presentations at Wood Innovations 2012 are planned from leading researchers or technology providers from Australia, New Zealand, the UK, Germany, Finland, Austria, the USA and Canada. Further details will follow shortly in this newsletter. The programme runs in Melbourne, Australia on 10-11 October and again in New Zealand on 16-17 October 2012. Programmes for both venues have now been uploaded onto the event website www.woodinnovationsevents.com. Softwood sawn timber imports into Australia drop 23%URS has just released the March quarter 2012 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 weak conditions in the Australian housing market continued over the March quarter 2012. New dwelling construction approvals fell by approximately 0.9% over the quarter, to be around 14.7% lower over the 12 months to March 2012. Any influence of lower interest rates on new dwelling approvals are not yet apparent and may not be realised until the second half of 2012. The number of finance approvals for dwelling construction increased by around 4.6% over the March quarter, indicating some potential for an improvement in the housing market later in the year. Imports of softwood sawn timber, which had previously remained at relatively high levels during the housing downturn, fell by around 23.0% over the quarter to approximately 120,000 cubic metres. This fall in imports occurred while the AUD remained strong against the USD, which indicates softening demand for structural timber products. The quarterly decline in softwood timber imports was derived from a large fall in European (-45%) and New Zealand (-17%) imports. Imports of plywood and veneer remain at high levels, despite a fall by around 6.1% over the quarter. Chile, New Zealand and China were the most significant sources of imported plywood and veneer over the March quarter. Declining structural timber prices have coincided with the downturn in housing construction activity. Softwood structural MGP10 and MGP12 timber products experienced price falls over the March quarter, which ranged from around 0.7% to 3.9%. Softwood price trends for structural and outdoor products have diverged over the last 18 to 24 months, with outdoor product prices remaining stronger than structural prices during the downturn in the housing construction market. Prices for outdoor softwood timber products remained flat over the quarter. Price movements for plywood products were relatively flat and prices for LVL engineered wood products fell by around 1.2% to 1.3%. Weaker prices for plywood and LVL products are likely related to competition from cheaper imports, as plywood imports remained at high levels over the March quarter 2012. TMS participants mentioned the high level of competition from cheaper imports of timber products, which has been placing downward pressure on prices for domestically produced products. To view the latest report Click here
NSW package for housingThe NSW Budget for 2012-13 was delivered this week and includes a package to stimulate the housing sector recognising that over the last five years housing approvals averaged below 30,000 each year.Called the Building the State package, the NSW Government will provide half a billion dollars for additional infrastructure that accelerates the delivery of up to 76 000 new housing lots and removes blockages in the development approval process. The First Home Owners Grant will increase from AU$7000 to AU$15,000 for new properties, before dropping to AU$10,000 from 2014. The budget also introduces the New Home Grant of AU$5,000 to all non-first home buyers buying a new property up to AU$650 000, while existing first home buyer stamp duty concessions will apply on new properties up to that amount - an increase of AU$50,000. Source: AFPA Canopy Tasmanian forest peace deal in sightFederal Environment Minister Tony Burke says he expects a final forest peace deal between the timber industry, forestry unions and environmental groups will be reached before the end of the month, in time for legislation to reach Parliament. In a bid to buy more time for negotiations to reach a lasting agreement, the Government plans to table Bills without nominating the size of new reserves or timber volume targets in the House of Assembly by 30 June. Mr Burke also said that complete legislation needed to be tabled before AU$100 million in federal regional development funding could flow. Source: The MercuryChilean firm buys into North American panelsA Chilean wood products firm is buying Flakeboard, a Canadian panel maker with seven plants in the United States and Canada for US$242.5 million. Mark Young, a spokesman for Santiago-based ARAUCO, said that the Chilean firm intends to continue operating all seven former Flakeboard plants.ARAUCO earlier this year acquired a fiberboard and particleboard factory in North Carolina that will be folded into the former Flakeboard operations, which ARAUCO said will continue to operate under the Flakeboard name. “This (Flakeboard) acquisition further highlights ARAUCO’s intent to grow our composite panel business and solidifies our commitment to be a leading supplier of sustainable, high-quality forest products to the North American market,” Francisco Figueroa, ARAUCO-USA General Manager, said in a written statement. ARAUCO said it expects the sale to close in the second half of the year. Getting the public onside
We regularly comment on the absolute need of painting the industry in a positive light – particularly to the wider community. The downside of not communicating the significant benefits of forestry and wood products – both financially and environmentally - is significant. There is general agreement, head nodding and then the questions start to arise – what are the messages the wider sector wishes to communicate, who's going to take the lead and then the major issue, how's it going to be funded and who should be contributing to any wider campaign.In Dunedin this week forestry or wood transport has taken a battering. Yet another logging truck was involved in an accident – this time the trailer loaded with logs detached itself from the front unit and ended up in the ocean. Luckily no one was hurt but the aftermath to the industry has been significant. As well as photos front page of local newspapers of logs strewn around a section of the harbour, a cartoon - see over - was placed in the region’s main newspaper. So the main question is still there – can the forestry industry continue to sit on its hands and not dedicate adequate resources to communicate all of the benefits of our industry to the wider public? We’d be interested in your comments. Smart timber monitor could save millionsResearchers at the University of Melbourne are reporting the success of a remote monitoring device that can accurately measure decay and insect infestations in construction timber over vast distances – and could save Australia’s building and electrical distribution industries, millions of dollars.The wireless device, which will eventually fit into the palm of a hand, can be attached to timber beams, joists or power poles, where it monitors at predetermined intervals their structural integrity, moisture content, and – through an ingenious ‘listening device’ – the movement of termites and other wood-boring insects. The device is the brainchild of Dr Berhan Ahmed, a senior research fellow at the University’s Department of Forest and Ecosystem Science and a 2009 Victorian of the Year, who has been developing the technology over the past four years with distinguished radar technology expert, Associate Professor Peter Farrell and senior engineering lecturer, Dr Graham Brodie. The researchers believe their system, which delivers its findings in real-time through a dedicated online program, will provide significant savings in building inspections, transport and labour costs – and, ultimately, in the amount of timber consumed by the construction and electrical industries. More >> 20 years service to the rural fire sector celebrated
NZ Crown Research Institute Scion is celebrating the 20th anniversary of its fire research programme at the 4th Fire Research Workshop that is running in Rotorua at the moment. Two decades of data collection from experimental burns and wildfires have gone into building tools that enable fire managers to make better decisions in fire-fighting operations. These tools are designed to indicate how fast, and how severely, a fire is likely to burn in different vegetation types. Senior fire researcher, Grant Pearce says that rural fire-fighters no longer have to rely solely on experience, gut-feeling and prayer. For every wildfire that breaks out in New Zealand there is a fire manager reaching straight for field manuals or calculators produced by Scion. “We have come a long way in 20 years. Forest and rural fire agencies now have access to a range of fire behaviour models specifically for New Zealand vegetation types,” he explains. “These tools started out as paper-based lookup tables and field manuals. Over time, we evolved these into software applications, which are now being designed to run on smartphones.” Scion established the fire research group 20 years ago when forest and rural stakeholders recognised the need for improved knowledge of New Zealand fire conditions. National Rural Fire Officer Murray Dudfield from the New Zealand National Rural Fire Authority says end users are pleased with progress made by the forest and rural fire research programme over the past 20 years. “In the late 1980s, the school of hard knocks could only take us to a certain point. With the help of science, we have taken forward steps in the effective management of fire in our forest and rural landscape.” Paperlinx announces cost cuttingPaperlinx has extended its cost-cutting drive but two prominent critics have dismissed them as insufficient and called for savings of $100 million and 1,200 job cuts. Paperlinx announced it would be closing its global headquarters in Milton Keynes, UK, and disbanding its global marketing and global human resources departments. The company also promised a 35% year-on-year reduction in corporate costs for the 2012-13 financial year. Chief executive Toby Marchant said "minimising corporate overheads" was "a key element" of the paper giant's on-going strategic review. Source: ProPrintJobs
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...and one to end the week on...the Christmas lights
Hi Sweetheart,
Her response Hi Honey, Thank you for that heart-felt apology. I don't often get an apology from you, and I truly appreciate it. I, too, felt bad about the argument and wanted to apologize. I realize that I can sometimes be a little pushy. I will try to respect your feelings from now on. Thank you for taking the time to hang the Christmas lights for me. It really means a lot. In the spirit of giving, I washed your truck for you and now I am off to the mall. I love you too!
 And on that note, have a great weekend. Cheers. We welcome comments and contributions on Friday Offcuts. For details on advertising for positions within the forest products industry or for products and services, either within the weekly newsletter or on this web page, please contact us.
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