Friday Offcuts – 28 March 2013
Click to Subscribe - It's FREE! Friday Offcuts – this week brought to you on a Thursday – before the Easter break. It’s rare these days to see forestry being praised in the media. This week the media has nothing but good things to say about the sector’s contribution (yes - you've read this correctly) - well at least on the New Zealand side. Statistics NZ figures issued last week showed that New Zealand’s forestry and logging activity is now at its highest level since data was collected in 1987 with production up a whopping 9 percent in the December quarter. This is the strongest recorded growth since 1999.Forestry has also been credited as one of the major factors behind the better than expected growth of the New Zealand economy. It grew more rapidly in the December quarter than in any other quarter over the last three years. GDP for the country grew 1.5 percent to NZ$36.81 billion in the three months ended 31 December according to Statistics NZ. This is much better than the 0.2 percent increase for the September period and it's almost twice the 0.8 percent expansion predicted by the Reserve Bank in its recent forecasts. It appears wood production and export earnings at the moment aren't too bad and the sector, rightly so, is getting its just rewards in the media. Continuing with the positive news, voting closes today on New Zealand’s proposed forestry levy. The two main forest growing industry groups, NZFOA and NZFFA have been actively driving the referendum for the proposed compulsory levy. If passed, current R&D funding will be boosted to an estimated $6.75million based on last year’s harvest level – critical at this particular time when Government has made it plain that future research funding for forestry will be much reduced, and be highly contestable. The forestry industry, smaller forest owners as well as corporate owners, have a real chance of backing our R&D activities to grow the future of the industry. Let’s hope that the active canvassing around the country will get the proposal across the line. The Australian economy likewise seems to be doing pretty well at the moment although activity in the housing market is still at relatively low levels - even with interest rate reductions. In the Australian Timber Market update story this week the latest RBA forecast for the Australian economy shows gross domestic product (GDP) growth reaching 3.5% over the 2012 calendar year and then softening to 2.5% over 2013. Good news for the industry continues in North American markets. As reported in previous issues, the housing boom is going from strength to strength. US housing starts in February were reported to be up 27.2% from the previous year. With increased demand comes increasing pricing (the Random Length Lumber Price Index climbed over 60 percent from late 2011 to March 2013), increased investment in local production facilities (Georgia-Pacific last week announced that it's developing plans for nearly US$400 million of investments in its plywood and lumber operations) and increased opportunities for wood exporters into the US market.
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This week we have for you:
New Zealand’s National Training Awards for 2013 open
The 2013 Forest and Wood Industry National Training Awards programme have started
their search for the New Zealand forestry industry’s top performers. The best
trainees/apprentices and companies in the forest, furniture and wood manufacturing
industry can be nominated for the annual Awards through a nomination process which will
culminate in the top finalist being selected for each award.The Awards are a major annual event for the industry where people and businesses are recognised for their commitment to learning and the achievement of professional qualifications. The Awards programme is the initiative of FITEC, the industry training organisation for the forestry, wood, furniture and biosecurity industries. This year the National Awards ceremony and dinner have linked into the major WoodEXPO 2013 event that will be running for wood products companies in Rotorua between 11-13 September. The idea is that those who will be travelling in specifically to attend the awards ceremony and dinner will be able to take in the EXPO exhibitions and workshops earlier in the day. WoodEXPO 2013 delegates and exhibitors will also like to add the Training Awards dinner to their own schedule to finish off what is going to be a particularly busy week in Rotorua. Companies have until May 31 to submit a nomination form for their most talented apprentices/trainees for the awards which include in each sector Modern Apprentice of the Year, Trainee of the Year and Training Company of the Year. Other national awards include a general industry award for Outstanding Business Performance through People Development, FITEC Training Leader of the Year, a Health and Safety award and two education awards for top diploma student and top degree student. The nomination form, eligibility and criteria are available on here. NZ forestry production at record levelsForestry is going gangbusters, buoyed by the giant Chinese market, with production up 9 per cent in the December quarter, the strongest growth since 1999. Statistics NZ figures, issued last week, show New Zealand’s forestry and logging activity at the highest levels since the series began in 1987. And it is likely to get bigger in coming years.About half of present production, is exported each year. In the December quarter alone, exports of logs, lumber and other wood products were worth NZ$847m, up 13 per cent on the same period a year before. Total exports are worth more than NZ$3 billion a year, making forestry New Zealand's third largest export goods sector, behind dairy and meat. Chile 2013 forestry exports projected to rise US$5.75b Chile's forestry exports are expected to increase to US$5.75 billion
this year, up 6.8% from the US$5.39 billion exported in 2012, industry trade group Corma
said in a statement. An increase in pulp production would partly boost total forestry
exports. Pulp prices, however, could fall after new plants in Brazil and Uruguay increase
supply from South America, said Corma President Fernando Raga.In Chile, fuel and forestry conglomerate Empresas Copec SA (COPEC.SN) plans to start operations at its US$1.9 billion Montes del Plata mill in Uruguay during the first half of this year. Montes del Plata, a joint-venture between Copec and Finnish paper producer Stora Enso Oyj, expects to add 1.3 million metric tons of hardwood pulp a year. Chilean paper and wood-pulp producer Empresas CMPC SA, meanwhile, has a US$2.1 billion investment planned for the expansion of its Guaiba plant in Brazil. Once Guaiba is fully operational in 2015, CMPC will increase total pulp production by 46% to around 4.1 million metric tons a year. Faith in exterior wooden joinery For
over 20 years Renalldoors has been producing quality, custom made, solid wooden doors
using cutting-edge technology reports the NZ Herald. Despite the economic climate, the
New Zealand company has invested NZ$1.5 million in a state-of-the-art machine from
Germany. This machine is designed to manufacture European style double and triple glazed exterior wooden joinery. Renalldoors claims to be the first company in New Zealand, in fact the Southern Hemisphere, with the requisite engineering technology and capacity to manufacture exterior wooden products that are extremely detailed, airtight and unique to the market. Along with the considerable investment in technology, the company has introduced to New Zealand a product that not been introduced before - a standard window system with double or triple glazing. If you look overseas trends, exterior aluminum windows in Europe have disappeared. Every window in Europe today has to meet a thermal standard and has to be rated. If it doesn't meet the standard, it has to be replaced. We believe there is a high possibility that things will change here and standards will be raised and will have to be met - and nobody else in New Zealand has invested this kind of money into the technology to make windows to that standard. More >>. NZ farm forestry advocate passes awayLast week came the sad news of the passing of well known forestry researcher, Ian Nicholas. The funeral for Ian, formerly with Scion and an enthusiast for special purpose species in New Zealand was held on Tuesday in Rotorua.As well as being such an integral part of the alternative species research effort in New Zealand for so many years, Ian brought tremendous passion to this area, particularly when working with and alongside farm foresters throughout the country. Ian was at Scion for about 34 years and in that time he made an enormous contribution to forestry, forest farming and championed the causes of such species as eucalypts, acacias and many others. All his publications (and there were over 90) had two key themes – their instant usability by foresters, farmers and other tree growing enthusiasts and passion. We all acknowledge his contributions to forestry science and the forest industries but we must not forget his contributions to cricket, running, hunting, fishing and most importantly a very large international community of friends and collaborators. All his friends in the forest industries, in science and all other areas where he was active are very saddened by his passing and convey their deepest commiserations to his family. Te Radar speaking to wood products companies
Well-known and self-titled "Opinionist", Te Radar will be speaking to forestry and wood products companies in Auckland as part of the NZ leg of the upcoming Residues to Revenues series in Auckland in a couple of weeks.Te Radar is an award winning satirist, documentary maker, writer, stage and screen director, failed gardener, and amateur historian. He is also the star of six top rating TVNZ programmes, Radar Across the Pacific, Global Radar, Radar’s Patch, Off the Radar, Homegrown and Hidden In The Numbers. New series of both Global Radar and Radar Across the Pacific are currently in production. He has twice won the Qantas Media Award for Best Humour Column for his New Zealand Herald columns and he has published a book of his experiences with sustainable living, Off The Radar: A Man, A Plan, and a Paddock. In his role of After-dinner Speaker he is sure to be a captivating speaker and deliver a few laughs along the way. If not attending the Residues to Revenues event in Auckland on Wednesday 10 April and you are going to be in town you might like to register on line for the dinner and entertainment. If still looking to register for this country’s two-yearly update on technologies around wood residues utilisation, late registrations can still be made on the Residues to Revenues 2013 website. US lumber prices jump over 60 % since late 2011The lumber market in the US really took off in late 2012 and early 2013. Lumber prices in February were more than 60 percent higher than in late 2011. Increased lumber production has put upward pressure on sawlog prices and in the US Northwest, Douglas fir sawlog prices reached a five-year high in the 4Q/12, according to the North American Wood Fiber Review.Lumber production in the US and Canada improved during 2012, with total output in 2012 being eight percent and five percent higher, respectively, than in 2011, according to WWPA. Sawmills in the Western region have been more fortunate than mills in other regions in North America since they have been able to ship lumber both to markets in the US and to Asia. The US housing market is continuing to improve, with higher house prices, lower inventories and limited sales of foreclosure homes (increasingly turned into rental properties). These developments have resulted in an increased number of housing starts and higher demand for lumber. Canadian sawmills, which export a majority of their lumber to the US, have been ramping up production during 2012 to meet the higher demand for lumber. This has been particularly true for sawmills in the Eastern provinces where production in the 4Q/12 was up 16 percent year-over-year. The US lumber price developments during 2012 and into early 2013 have been quite remarkable with the Random Length Lumber Price Index increasing by over 60 percent from late 2011 to March 2013. This development has been drawing the attention from sawmills far away from the North American continent. With substantially higher prices and a predicted increase in the demand for lumber in 2013, many foreign companies hope to be able to increase shipments of lumber to the US shores in the coming year. Source: Wood Resources International LLC, www.woodprices.com. 76 ton truck weights would cut transport costs by €250M/year
The maximum weights of trucks will soon be increased to 76 tons in Finland. 90-ton trucks would require a different construction which can be constructed with new trucks only.Proposals to increase the maximum weight of heavy trucks were put forward by the forest sector long ago. The state-owned forestry company Metsähallitus proposed this in 2008, but the Government accepted the idea only last November, after a proposal by the Finnish Forest Industries Federation in 2010. According to the proposal by the ministerial group, the total weight of a truck with nine axles could increase up to 76 tons. With fewer axles, the total weight should be lower. The current maximum weight allowed in Finland and Sweden is 60 tons. The change in maximum weight could be approved for any truck at once after the Government decree is passed, if the technology in the truck is satisfactory. If not, the necessary modifications should be made and approved in connection with the next vehicle inspection. The maximum height of the vehicle would also go up from 4.2 to 4.4 metres, but this change has no large relevance for timber transportation. However, the Government cannot make this decision alone; it has to be approved by the Commission of the European Union. The plan at the moment is that, after approval by the Commission, the Finnish government could pass the final decision in early summer 2013. Further goals are actually even more ambitious. The forest sector plans to submit to the Finnish Transport Safety Agency an application for testing trucks weighing 90 tons on Finnish roads. The application is likely to apply to a total of seven routes in different regions around the country. The plans also include the testing of a special truck, which would carry forest chips in one direction and pick up a load of sawlogs when returning. In Sweden, 90-ton trucks have already been tested and an application to continue the tests has been submitted. Next tests are to start this year and continue for five years. A 90-ton truck would also be longer, up to 30 metres, while the present maximum length in both countries is 25.25 metres. A longer length would be advantageous, especially for timber transportation, because of more flexibility in how to place stem bundles of different lengths in the truck. Other things to examine would be vehicle manoeuvrability on narrow forest roads and the effect of different types of tyres on the road and on fuel consumption. The main reason to increase the truck weight is cost. The Government proposal would decrease the forest industry’s transportation costs by 15–20 per cent. For the forest sector this would mean tens of millions of euros annually. The total savings in Finland would rise up to 90–250 million euros per year. Traffic emissions would also decrease by 10–15 per cent, as fewer trucks and less movement would be needed. According to Swedish studies, increasing the truck weight from 60 to 74 tons would decrease the need for movement by a quarter, but if the maximum weight were 90 tons, the decrease would be 40 per cent. Source: Finnish Forest Association Boosting biosecurity for Australia’s plantation forestsThe Australian Forest Products Association (AFPA) has boosted biosecurity for plantation forests with two new steps: launching a new biosecurity plan and becoming a signatory to the Emergency Plant Pest Response Deed (EPPRD).The Plantation Forest Biosecurity Plan was released last Friday at the AFPA Board meeting, revising and updating an earlier plan. The new plan provides the plantation forest industry with a framework for increasing biosecurity preparedness that includes reducing risks from potential pest incursions. It was produced by Plant Health Australia (PHA), the coordinators of plant biosecurity in Australia, in collaboration with AFPA and with financial support from Forest and Wood Products Australia. PHA brought together experts from industry, research organisations and governments across Australia, to assess the pests that pose the biggest threat to the industry and to devise ways to reduce the risk. More detail is available on the AFPA website. An FWPA funding proposal is being prepared to develop the Forest Plantation Biosecurity Manual. The Manual is to be a subordinate document to the Plan and will be designed to provide operational guidance to managers in order to minimise risks. It is also proposed to contain fact sheets identifying high risk pests, symptoms of an infestation and control measures. Source: AFPA Canopy US plywood producers scramble to increase productionPlywood producers in the U.S. are scrambling to return plywood production to pre-recession levels as prices reach levels 45% higher than a year ago, the Wall Street Journal reported on March 21. The Random Lengths structural panel composite price reached US$511 per thousand sq. ft. (msf) on March 15, up $150 (45.58%) over the price reported in the corresponding week of 2012 of $351/msf.The nation's largest plywood producer, Atlanta-based Georgia-Pacific (GP), announced on March 22 that it plans to invest around US$400 million over the next three years to increase its softwood plywood and lumber capacity by 20%. The investment will be focused on revamping and expanding GP's lumber and plywood plants in the southeastern U.S. Latest Australian Timber Market Survey results out URS has released the December quarter 2012 edition of the Australian Timber Market Survey (TMS) report. The TMS reports timber price movements collected through a quarterly survey of the buying prices of timber products by timber wholesalers and merchants in eastern Australia.Prices for major structural softwood timber products MGP10 and MGP12 changed only marginally in the December quarter 2012, with movements ranging from -0.3% to 0.7%. Over the 2012 calendar year, prices for MGP10 products fell by around 5.4% to 5.9% and prices for MGP12 products fell by around 3.9% to 7.0%. Meanwhile, prices for outdoor softwood timber products, panel products and engineered wood products remained relatively stable. TMS results showed mixed price movements for hardwood flooring and joinery appearance grade products over the six months to December 2012, which may reflect relatively subdued spending on home renovations. Price movements for structural hardwood products varied over the second half of 2012. Structural F17 prices ranged from 0.4% to 2.3% across the dimensions surveyed, reflecting mixed results within each of the eastern states. Meanwhile, structural F27 prices recorded an increase of 0.5%. Australia’s economic growth remains relatively strong compared to other developed countries. The latest RBA forecast for the domestic economy shows gross domestic product (GDP) growth reaching 3.5% over the 2012 calendar year and then softening to 2.5% over 2013. However the strong Australian dollar continues to affect the competitiveness of the manufacturing sector. Over the 2012 calendar year, the Reserve Bank of Australia reduced the Official Cash Rate (OCR) by a total of 1.25%, taking the OCR down to 3% which matches the lowest rate that was implemented following the global financial crisis (GFC) in 2009. Activity in the housing market remains at relatively low levels and is yet to show any significant response to interest rate reductions. The number of new dwelling construction approvals increased by around 3.8% over the December quarter to be relatively stable for the 12 months to December 2012. Growth in dwelling construction approvals was driven by a 9.9% increase in private sector non-house approvals. The number of private sector house construction approvals fell by around 1.3% over the quarter, to be around 4.4% lower for the year. The latest available data on spending on housing alterations and additions, which gives an indication of the performance of the home renovation and hardwood timber markets, shows Victoria as the only state with stable spending on alterations and additions over the 12 months to September 2012. Spending on alterations and additions declined in NSW (-12.3%), Queensland (-3.2%), South Australia (-1.5%), Western Australia (-15.5%) and Tasmania (-3.9%). For more information, a copy of the Timber Market Survey report is available for download from the URS Asia-Pacific website by clicking here. New Forests announces 32,000 ha purchaseNew Forests announced on Tuesday the completion of the purchase of approximately 32,000 hectares of Eucalyptus globulus (Blue Gum) plantations from APT Projects Limited, a subsidiary of Elders Limited. The plantations are being acquired by the Forestry Investment Trust, which already owns the land on which the trees are located. FIT was formed in the 2011 acquisition of 270,000 hectares of land from Great Southern Plantations and is managed by Sydney-based New Forests.The plantations are being managed for pulpwood production and were established between 2000 and 2002 under managed investment schemes. The plantations are spread across a number of properties in the Green Triangle and the South West of Western Australia. "New Forests can now manage these former MIS trees as an integrated asset with the land on which they were planted,” said David Brand, Managing Director of New Forests. “This transaction represents another step in rationalising the hardwood plantation sector and establishing a more sustainable basis for forestry investment in Australia." New Forests Pty Limited manages investments in sustainable forestry for institutional and other qualified wholesale investors. The company has offices in Sydney, Singapore, and San Francisco and currently manages more than AU$1.3 billion in assets and over 400,000 hectares of land in Australia, the United States, and Asia.  New Zealand Log Prices - March 2013In-market log prices have remained at elevated levels this month though have not moved up as steadily as in the months previous. This is unsurprising given the three week break over Chinese New Year. As usual port stocks have built up over the three week break, though they were building from a very low basis. Reports are that activity post-break has been good and off-take from the ports has been high. This activity has yet to settle down into a steady work rate, so it is still too early to tell whether the log consumption in China will be elevated this year.In terms of the demand for New Zealand logs the basis level of consumption is virtually unchanged though New Zealand is benefitting from a larger market share. Prices this month are above US$140/JAS for A-grade logs destined for China and have ranged as high as US$145/JAS. Prices this high are usually enough to attract wood from the Pacific North West which would often be given preference over New Zealand Radiata pine. However, in current market conditions this price may not move a significant higher volume of wood from Canada as the US housing recovery will provide strong competition. North Island
For more detailed reports contact NZX Agrifax at www.nzxagri.com/agrifax
You know Easter is upon us when... Jobs
Buy and Sell
...and one to end the week on...old age at its best
And on that note, enjoy your short holiday with family and friends over the Easter break. Go easy on the chocolate though. Cheers. Brand PartnersOur Partners & Sponsors Friday Offcuts is made possible through the generous support of the following companies.
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Russ and Sam, two friends, met in the park every day to feed the pigeons, watch the squirrels and discuss world problems. One day Russ didn't show up. Sam didn't think much about it and figured maybe he had a cold or something.