Friday Offcuts – 31 May 2013
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This week we have a number of new technology related articles for you. Google Glass - go on you’ve read or heard about it or seen it displayed.
It’s a wearable computer and looks just like a pair of eye or sun glasses. It's designed to display information in a smartphone-like hands-free format and you’ll be able to interact with the internet via natural language voice commands. In a story this week about this new hi-tech head-set, it’s said to show real promise for those working out in industrial environments such as in construction or engineering. 2013 is the year that Google Glass is expected to be launched to the consumer so watch this space. Check out what it is and how it's going to operate .
Details on this regions own tech-fix, MobileTECH Summit 2013, for those working in our primary industries are also now out. You can check out the two-day programme running in Wellington on 7-8 August by clicking here. By the way, news out this week that the GALAXY S4 smart phone has surpassed 10 million units sold in less than one month after its commercial debut. Launched globally on 27 April, the phone is estimated to be selling now at a rate of four units per second. The other innovation covered this week is a new board product unveiled at LIGNA earlier in the month. Constructed from wood chips and a foamed polymer, it’s claimed to be 30% lighter than conventional particle board.
Finally, we have an update for you this week on the upswing in North American housing markets - and exactly what this will mean to those supplying wood products. For wood mouldings, the International WOOD MARKETS Group report that after 5 years of declining consumption, 2012 was a turnaround year for the US market. Moulding demand this year is expected to benefit from the continuing recovery in US housing starts with forecasters predicting repair and remodelling expenditures to expand by more than 10%. The challenge though for the US over the next couple of years is going to be rebuilding moulding capacity to keep pace with demand. In the down times of 2006-2011, many of the offshore moulding producers including New Zealand, had by necessity reduced their operations and/or redirected production to other markets.
In an update to the NZX this week, Tenon, the New Zealand based wood products manufacturer and distributor also reported that they were expecting a significant turnaround in earnings as the US housing recovery picks up. The story is the same for engineered wood products (I-joists, glulam and LVL) with a projected boost in wood production - including a significant 17 percent jump in I-joist manufacturing.
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This week we have for you:
Timber engineer wins NZ Architects President's Award
University of Canterbury (UC) civil engineering professor Andy Buchanan has received the New Zealand Institute of Architects (NZIA) President’s Award in Auckland. Professor Buchanan is at the international forefront of research into new methods of constructing multi-story timber buildings.
The President’s Award recognizes a significant contribution to architecture or the built environment in New Zealand. A citation for Professor Buchanan’s award says that in the course of his distinguished career he has undertaken work in the fields of structural, earthquake and environmental engineering, as well as fire safety, and in his current research he is drawing upon his experience in all of these disciplines to develop new timber technologies.
Professor Andy Buchanan, along with Associate Professor Stefano Pampanin and Dr Alessandro Palermo, has developed a completely new system of earthquake-resistant buildings using post-tensioned structural timber. Their work has resulted in a step-change in the use of timber as a structural material, allowing direct competition with concrete and steel for many multi-story buildings. New buildings of up to 10 story’s are being built in Europe, North America and Australia, with proposals for a 30 story timber building on the drawing board in Canada,’’ Professor Evans-Freeman says.
Professor Buchanan received the Hideo Sugiyama Memorial Award for timber engineering from the Japan Timber Engineering Society in 2008; the Sjölin Award from the International Forum of Fire Research the same year; and the Queens Service Medal for public services in 2002.
Improving efficiencies through the wood supply chain
Better management of wood flows within the wood supply chain has been a clear priority for the majority of forest products companies over the last couple of years. The pressure’s been on to squeeze as much out of each segment – and across the entire wood supply chain – from harvesting and transport operations through to market. With a big jump in both the quality and type of data available that’s now being made available, significant inroads have been made in the last 12 months into capturing some of these inefficiencies.
For the first time in the Pacific North West, a one-day conference, ForestTECH 2013 – Improving Wood Transport & Logistics, has been set up for forest managers, technical foresters, forestry consultants, forest logistics and supply chain managers, harvest planners and transport operators. It’s based on the very successful series run for Australasian forestry companies by the Forest Industry Engineering Association (FIEA) late last year.
Australasia’s leading provider of forest products technology programs, FIEA will be linking up with the well-known US forestry association, the Western Forestry and Conservation Association (WFCA). This inaugural event has been set up specifically for forestry, wood products and transport companies in California, Oregon, Washington, Idaho, Montana, Alberta and B.C.
The innovative program will provide a long overdue insight into some very clever technologies being used by forest products companies in the US – and internationally - to improve local company’s planning, logistics and operations within the wood supply chain.
ForestTECH 2013 runs in Portland, OR, USA on Wednesday 9 October 2013. Full details can be found on www.westernforestry.org
New Zealand Log Prices - June 2013
Log prices have moved up 2% during June after a steady month in May. KS grade logs are now at the highest level in two years. A-grade logs have reached an average of US$150/JAS and KS grades are at US$145/JAS. This has resulted in massive volumes being exported from New Zealand at these high prices, which is putting pressure on the market in China. It is widely expected that the next price movement in China will be down, though this is not expected to be a large drop. The wet season in China usually leads to lower demand and prices as construction slows, and over the last five years the third quarter average for in-market log prices has been 3% lower than the other three quarters.
The market in China has followed the high construction material prices in the United States, and in cases buying has been in order to increase production to be competitive rather than to fulfil demand. However, production is still continuing at a rapid rate which is resulting in low on-port stocks despite the large exports from NZ. The low stocks will keep a floor on any price drops as importers will buy to keep at least a baseline level on inventory.
The Agrifax Log Price Indicator rose by 1 point this month, after remaining steady last month. It is currently at 95, being pushed up by export price rises for unpruned logs in both the North and South Islands. There was also a rise in the pruned log prices in the North Island. This is the highest it has been for two years, which reflects the current strength of exports and will likely move up again in the next quarter as domestic prices are pushed up to parity with exports. Export prices may, however, drop slightly though the effect of this could be tempered by the drop in the exchange rate.
When export prices were last this high in early 2011, there were slightly different demand pressures on the prices. The pulp price indicator was 15% higher than it is currently. This is much more than the difference in the unpruned log price indicator, which is now just 4% lower than it was in April 2011. The pruned log indicator, however, shows the difference made by the relatively new advent of high pruned log demand in China. It is now at its highest point since October 2004.
North Island-
Domestic: Steady
- Export: Up
South Island
- Domestic: Steady to up for pruned logs
- Export: Up
For more detailed reports contact NZX Agrifax at www.nzxagri.com/agrifax
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.
Steady as she goes forecast for Australian housing
The housing construction industry in Australia will experience no growth in the volume of new work coming in this year, a leading industry lobby group says.
In the Autumn 2013 edition of its National Outlook report, the Housing Industry Association (HIA) says it expects the number of new starts in residential construction to contract from an estimated 147,610 in 2012 to 147,390 in 2013 – the second lowest level on record in the past decade.
While the HIA expects activity to bottom out this year, it expects only modest growth of 2.5 per cent and 2.8 per cent in 2014 and 2015 respectively meaning activity is expected to remain at historically low levels for some time.
Housing Industry Association chief economist Harley Dale says the sector is being held back by a combination of consumer caution and tight household credit on the demand side and tight credit conditions for residential development as well as ‘disproportionately high and inefficient taxation’ and ‘excessive regulation on new housing’ on the supply side.
Outside of new housing, levels of investment in renovations of existing homes are expected to remain subdued by historic standards after dropping to ten year lows last year following several years of above normal activity levels. The negative housing outlook comes in spite of recent positive data regarding both new home sales and new housing finance – both of which have been trending upward in recent months.
Source: DesignBuildSource
Google Glass could revolutionize work on construction
A new breed of hi-tech headsets are to set hit construction sites and other industrial environments in the very near future, providing workers with capabilities which were once the exclusive preserve of speculative science fiction.
Companies such as Google and New York’s Vuzic are engaged in the aggressive development of head-worn portable computers, which they believe will be the next generation of hi-tech devices to follow in the wake of the paradigm-changing smart phone.
Google plans to launch the Google Glass by the end of 2013, while Vuzic will release its M100 to consumers as early as the summer in North America. While developers have high hopes for the devices as the next must-have hi-tech consumer product, many are already pointing to the revolutionary potential of such portable computing power in the areas of construction and engineering.
Sydney-based architect Rana Abboud has previously pointed out that the use of Augmented Reality (AR) in conjunction with devices such as the Google Glass could have radical implications for the building process, by enabling workers to superimpose BIM files and other computer-generated images over their real-world views of a construction site.
“What [AR] would do is allow you to overlay the computer data directly onto the site and walk around. So it’s not a static, one perspective view,” Ms. Abboud says. The Google Glass and its peers have the potential to optimize the practical application of both BIM and AR, by providing builders with the most effective tool for bringing the advantages of such software to real world environments.
Source: designbuildsource
US wood moulding market update
For the U.S. moulding market, 2012 was the turnaround year after five consecutive years of declining moulding consumption. With the improvement in new residential construction, and steady growth in repair and remodelling activity, U.S. moulding consumption saw an appreciable lift in 2012. For the first time since 2009, moulding consumption trended higher in 2012, recovering to a level equivalent to 54% of the size of the market in 2006.
The effect of over 50% of demand disappearing from 2006 to 2010 had an obvious decimating impact on domestic and offshore moulding producers. However, offshore producers took the bigger hit during this time frame as U.S. producers actually saw their share of a shrinking market improve from below 40% in 2006 to 47% in 2008. Low prices and unfavourable exchange rates forced many offshore producers to curtail operations and/or redirect production to other markets.
U.S. producers, on the other hand, stayed focused on their domestic market, taking advantage of their closer proximity to the market. In comparison to offshore producers, U.S. producers could offer faster cycle times, supply smaller order quantities in a broad array of product offerings, and deliver highly mixed loads to multiple locations per truck.
Demand has been building since late 2011, yet U.S. producers have found their ability to grow with the market restricted by a lack of affordable fibre. Volumes of imported blocks, blanks and shop lumber have been kept tight as offshore producers have developed alternative export markets in Asia, Europe, the Middle East/North Africa, and Latin America. As a result, U.S. moulding producers have had to pay global prices for their fibre despite moulding prices not always keeping pace.
With domestic moulding supply constrained by a shortage of affordable raw material, moulding prices trended higher in 2012. Attracted by higher prices, offshore suppliers cautiously increased their moulding shipments in 2012 by 12%, lifting total imports to 2.5 billion lineal feet. Two-thirds of this increase came from Brazil, the largest supplier to the U.S. (+185 million lineal feet to 1.0 billion).
Second-place Chile’s volumes were essentially unchanged at 850 million lineal feet, and third-place Mexico increased its shipments by 86 million lineal feet to 300 million. In fourth spot was Argentina, which saw its volumes decline by roughly 25 million lineal feet to 100 million. The other noticeable event among imports was that China grew its moulding shipments to the U.S. by 22 million lineal feet, giving it a fifth-spot tie with New Zealand at 80 million lineal feet.
Moulding demand in 2013 will benefit from the continuing recovery in housing starts: forecasters are calling for starts to grow by more than 20% (to +/- 950,000 units), and for repair and remodelling expenditures to expand by more than 10% in 2013. The challenge over the next few years will be to rebuild moulding capacity to keep pace with demand.
In April, International WOOD MARKETS Group released the eighth edition of its annual multi-client report titled U.S. Moulding Market & Supply Options Outlook: 2013–2017, from which some of the report's findings are covered in this article.
Source: International WOOD MARKETS Group, www.woodmarkets.com
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2013 North American Market Outlook for EWP
Growth in wood production, including a 17 percent boost in I-joist manufacturing is expected as the North American economy and housing continue to improve.
The small but positive uptick in the economy and residential construction closed 2012 on an optimistic note for the first time since the recession began, and that slow-but-steady growth is expected to continue through 2013. With indicators pointing to rising housing starts through the year and into 2014, APA-The Engineered Wood Association predicts a second straight year of growth in all four of the wood product sectors it represents.
“Last year saw across-the-board increases in structural panels, I-joists, glulam, and LVL. In 2013, not only will that trend continue, but at a slightly faster pace in most cases,” said Craig Adair, APA’s market research director. “Residential construction will drive much of that growth, with pent-up demand for housing, moderately rising house prices, and growing consumer confidence having the most influence.”
Wood products demand is expected to accelerate as rapid housing growth is followed by renewed repair and remodelling energy, an upturn in the non-residential construction cycle, and industrial demand that increases with consumer spending and higher GDP growth.
Domestic (U.S. and Canada) production of OSB and plywood is expected to reach 30.5 billion square feet in 2013, a 10 percent rise over 2012. Glulam is predicted to see a 10 percent increase over 2012, reaching 248 million board feet. The growth is due entirely to housing, with little support from non-residential.
Growth in the I-joist market is forecast around 17 percent in 2013 to 651 million linear feet, slightly slower than 2012’s 22 percent increase. Most of the gains will come from housing, with raised-floor construction continuing to provide a notable boost.
Increased housing starts also will drive demand for LVL, the majority of which is used for beams, headers, and rimboard. LVL production should reach 54.9 million cubic feet in 2013, a 10 percent growth over 2012. More >>.
Gunns investors back bank takeover
A plan by Gunns' liquidator to sell the failed timber company's plantation schemes has been rejected by investors reports ABC News this week. Liquidator PPB Advisory wants to include Gunns' managed investment schemes in a sell-off of the company's assets. The Macquarie Group is trying to take control of nine schemes, worth AU$500 million. Investors, or growers, have voted overwhelmingly in favour of the bank's takeover. Macquarie still needs to convince the Victorian Supreme Court the deal is in the best interests of growers. If approved, it means six of the schemes will continue and PPB Advisory will not be able to include them in a sell-off of the company's assets.
Mangakahia Forest lifts harvest by 60%
Greenheart NZ Forestry, the Northland forester whose ultimate owner shifted from failed
Sino-Forest Corp to a Cayman Islands based company this year, has lifted its annual harvest
by 60 percent and sales by 35 percent, its 2012 accounts show.
Greenheart
operates the 13,000 hectare Mangakahia Forest, which it acquired from former parent Sino-
Forest in 2011 for US$73 million in shares and debt. It was among assets transferred from
Sino-Forest to Cayman Islands incorporated Emerald Plantation Holdings as part of a
Canadian deal with Sino-Forest’s creditors in January.
Greenheart NZ’s accounts show the group harvested about 558,550 cubic metres of wood in
calendar 2012, up from 348,620 cu m in 2011. Total revenue climbed 35 percent to US$37.7
million, of which about US$34 million was in export sales. More >>
Tenon upbeat as US housing gains momentum
New Zealand based wood products manufacturer and distributor, Tenon, confirmed in an announcement to the New Zealand Stock Exchange this week that it expected a significant turnaround in earnings as the US housing recovery gains further momentum.
US building permits in April exceeded 1 million new homes, the highest level recorded since June 2008, signalling a much stronger level of new building activity than the fewer than 500,000 houses built at the cycle low. Over the past 12 months US home prices have, on average, increased 11% (the largest annual gain recorded since April 2006), and the National Association of Realtors predicts further rises of 13% cumulatively in calendars 2013 and 2014.
If such further increases were to occur, they would imply an increase of over US$2 trillion in US household wealth, giving further confidence to homeowners to spend on home improvement activities. It is the remodelling segment in the US housing market that drives Tenon’s large home centre store sales.
Harvard’s Housing Studies Leading Indicator of Remodelling Activity (LIRA) projects much higher activity level in US remodelling in the second half of the current calendar year. This projected is also supported by the strong rise in house prices recorded over the past year. US home prices have now recovered to the level they were at in 2007, and more than US$1.6 trillion has been added to homeowners’ equity over the past 12 months.
The place of forests in collaborative land use decisions
The NZIF conference in Taranaki may seem unusual considering the region contains only just over 1% of the nation’s productive plantation resource. This resource is largely situated in the eastern hill country and southern reaches of the province and supports a timber processing industry of a couple of medium size sawmills and a smattering of smaller wood users. The Port of Taranaki has been a periodic exporter of logs over the past 20 years or so.
Why then Taranaki? Taranaki is predominantly a patchwork of intensively farmed dairying land that surrounds the prominent mountain, Mt Taranaki, which lies within the Egmont National park. To the east, the hill country consists of a mix of productive and marginal hill farming country, modified and virgin indigenous forest and a smattering of production plantation forestry. Approximately 300 rivers and streams drain from the mountain to the sea which in combination with the intensively farmed ring plain creates significant challenges for the control of diffuse pollution. The local response to this is Taranaki Regional Council’s riparian management programme.
This conference however is not just about riparian’s and water quality; it will explore the ecological changes that have taken place over 200 years of agricultural development. There is acute awareness in this region that problems and land use decision making to protect and enhance this environment require multidisciplinary resources. The need for economic, social and environmental values to be the responsibility of all land users will be a core component of the conference. The fact that these decisions are increasingly made in a collaborative manner to ensure all interests are considered is a feature of the Taranaki approach.
Key presenters at the conference include: Minister Jo Goodhew, Associate Minister for Primary Industries, Guy Salmon, Executive director of the Ecologic, Basil Chamberlain, Chief Executive of the Taranaki Regional Council and Al Morrison Chief Executive and Director General of Department of Conservation. Further details on the 30 June -3 July conference can be found on www.nzifconference.org.nz
New lightweight board unveiled at Ligna
A versatile and sturdy lightweight board was launched by BASF, the world’s leading chemical company, and Swiss Krono Group, a leading European wood-based material manufacturer, at Ligna 2013. The jointly developed lightweight solution is up to 30% lighter than conventional particle board. Under a top layer of fine wood chips is a lightweight middle layer consisting of larger wood chips and a binder made of a foamed polymer.
In its raw form the particle board can be used as a basic material for furniture production and can be processed with a range of finishes. The boards can be recycled or incinerated just like conventional particle board. In fact for recycling purposes, the boards can be mixed with conventional particle board for the manufacture of standard or lightweight chipboard.
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...and one to end the week on...a few more to ponder
For those who were faced with snow this week in NZ.
Since the snow came all the wife has done is look through the window. If it gets any worse, I'll have to let her in.
A few more for you.
Paddy says "Mick, I'm thinking of buying a Labrador. "Bugger that" says Mick "have you seen how many of their owners go blind?"
My girlfriend thinks that I'm a stalker. Well, she's not exactly my girlfriend yet.
A wife says to her husband you're always pushing me around and talking behind my back. He says what do you expect? You're in a wheelchair.
I was explaining to my wife last night that when you die you get reincarnated but must come back as a different creature. She said I would like to come back as a cow. I said you're obviously not listening.
OK - pretty weak then. One more for you to finish your week on. If this doesn't make you laugh, you are truly humour impaired!
The Navy found they had too many officers and decided to offer an early retirement bonus. They promised any officer who volunteered for Retirement a bonus of $1,000 for every inch measured in a straight line between any Two points in his body.. The officer got to choose what those two points would be.
The first officer who accepted asked that he be measured from the top of his head to the tip of his toes. He was measured at six feet and walked out with a bonus of $72,000.
The second officer who accepted was a little smarter and asked to be measured from the tip of his outstretched hands to his toes. He walked Out with $96,000.
The third one was a non-commissioned officer, a grizzly old Chief who, when asked where he would like to be measured replied,
'From the tip of my weenie to my testicles.'
It was suggested by the pension man that he might want to reconsider, explaining about the nice big checks the previous two Officers had received. But the old Chief insisted and they decided to go along with him providing the measurement was taken by a Medical Officer.
The Medical Officer arrived and instructed the Chief to 'drop 'em,' which he did. The medical officer placed the tape measure on the tip of the Chief's weenie and began to work back. "Dear Lord!", he suddenly exclaimed, "Where are your testicles?"
The old Chief calmly replied, "Vietnam".
And on that note, have a great weekend. For the Kiwis - its an extended three day weekend with Queens Birthday so have a good one. 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: www.fridayoffcuts.com
This week's extended issue, along with back issues, can be viewed at www.fridayoffcuts.com
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