Friday Offcuts – 7 June 2013
Click to Subscribe - It's FREE! This week we lead with an opinion piece from Ross Hampton, CEO of the Australian Forest Products Association on the current state and future of the Australian forest products industry. It’s titled “What are we doing to ensure forestry doesn’t follow Ford?” With the issues currently being faced – and fought - by the industry, the downside of not doing something to spark renewed growth is clearly spelled out. Ross rightly points out that the industry is now at a “key moment in time”.Right now Government policy settings may need to be tweaked to encourage plantation and processing investment, the low carbon footprint of wood compared with many other building materials needs to be better recognised and help may be needed in the short term to transition this – and other industries - to a new operating environment. The full piece can be read in the lead story this week. The Australian forest products industry should though welcome the findings of a new report by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), Preliminary Long Term Forecast of Wood Products Demand in Australia. It indicates encouraging growth in wood and paper products – albeit, looking 40 years out. The report forecasts sawn wood consumption to increase from about 5 million cubic metres to 6.5 million cubic metres per year, wood-based panel consumption climbing from about 2 million cubic metres to 4.3 million cubic metres and paper and paperboard consumption to rise from 4 million tonnes to 7.1 million tonnes per year between now and 2049-50. For the New Zealand industry, the WoodScape study commissioned by the Wood Council of New Zealand this week was released publicly. The study results including regional wood processing options and a review of technologies and markets for the sector are now available on-line. The study reinforces the importance of solid wood processing to the wider processing sector and the absolute requirement to improve the international competitiveness of existing sawmilling operations. Investment in new processing technologies to process the ever increasing volumes of lower grade saw logs, the need to develop new higher-value products such as engineered wood products and fuel and chemical extractives to add more value to current log inputs and of course, strong partnerships between research and industry and the need to open up new markets are all recommendations drawn from the study. So, how do we get there? The WoodScape study was always intended to be a “higher-level” planning exercise. It was an excellent start for planning on how to reinvigorate and reposition the country's wood processing sector. The question on the real value of this study has to be; "has it now provided the long awaited spark or platform for WoodCo, Government, industry associations, regional councils or regional groupings, investors or individual companies - or a mix of these interest groups - to pursue the findings and recommendations further?" Maybe in six – twelve months’ time we’ll be in a better position to judge this latest exercise by the action's resulting from WoodScape's findings.
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What are we doing to ensure forestry doesn’t follow Ford?An opinion piece from Ross Hampton, CEO, Australian Forest Products Assocation."The Government moved quickly to offer financial support to our fellow Australians after Ford’s announcement last week. It might do equally well to consider some calibrated and creative intervention at the top of other cliffs rather than awaiting other trade exposed industries to fall off. The forest products industry is a profound case in point, where a sensible dose of prevention can, and should, easily outweigh the costly cure. This is not to advocate anything like tariff barriers or other simplistic devices - which kill innovation. But even some of the driest economic purists acknowledge it is sensible for a nation to tweak policy settings to help their industries transition to a new operating environment. The long term cost to the economy of losing whole sectors, or capacity, is far greater than the short term cost of straying from the purely rational script. Forestry and forest products need that sort of thinking now. The comment I heard recently on radio that forestry is a ‘sunset industry’, is rubbish. But I do have to admit it could be true in years to come if we continue to ignore our local businesses whilst our competitors, with all sorts of assistance, vacuum up our markets." More >> Solid growth predicted in Australian wood productsThe consumption and import of major wood products in Australia is forecast to increase solidly out to 2050, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). Executive Director of ABARES, Paul Morris, said the models and forecasts developed in Preliminary long-term forecasts of wood product demand in Australia provided a timely outlook for long-term demand of major wood products in Australia."The report forecasts sawnwood consumption to increase from about 5 million cubic metres in 2010-11 to 6.5 million cubic metres in 2049-50," Mr Morris said. "These trends in demand for sawnwood are influenced by housing activity - particularly by the number of dwelling commencements which is driven principally by population increases." Wood-based panel consumption is forecast to increase from about 2 million cubic metres in 2010-11 to 4.3 million cubic metres in 2049-50. The demand for wood-based panels shows a strong relationship with the value of renovations and the number of new multi-dwellings commenced in Australia. Paper and paperboard consumption is forecast to increase from around 4 million tonnes in 2010-11 to 7.1 million tonnes in 2049-50. This forecast is influenced, in part, by increased demand by the manufacturing sector as well as some growth in demand for other uses, such as printing and writing paper. Increased use of electronic information sources may have some moderating effect on demand for paper in some uses, such as newsprint. The report, Preliminary long-term forecasts of wood product demand in Australia is available on the ABARES website. New Zealand WoodScape study releasedA major study report released by the Wood Council in New Zealand highlights the need for by-products from established industries like sawmilling if the country is to develop profitable businesses based on emerging technologies, like bio-fuels and bio-chemicals.The WoodScape study is the result of collaboration between the forest and wood products industry, the NZ Ministry for Primary Industries and NZ Trade and Enterprise, which together funded the project. Crown Research Institute Scion, in partnership with FP Innovations and the Wood Council, evaluated wood processing investment opportunities in a New Zealand setting. The study developed a NZ-specific model that can be used to evaluate potential opportunities for investment in traditional and emerging wood processing technologies that have the potential to generate more jobs and increase export earnings from New Zealand’s timber harvest. Council chairman Doug Ducker says the study has highlighted a single key imperative – viable primary wood processing industries like sawmilling are vital to investment in further downstream secondary processing. “If sawmillers on-sell wood residues to supplement their income this will in turn enable many new and emerging technologies like bio-fuels and bio-chemicals to generate acceptable positive returns on investment. Without the primary wood processing sector, these new opportunities will be less viable.” “We are on an exciting journey,” Mr Ducker says. “But it is important to understand that the WoodScape study has been conducted at a very high level and further analysis will need to be undertaken at a regional and individual company level to identify specific investment opportunities.” The role of the WoodScape study was to analyse future investment options to grow wood processing and manufacturing in New Zealand. A summary of findings of the WoodScape report as well as the detailed study reports can be found on the Wood Council’s website: www.woodco.org.nz  Wood costs for the pulp & paper industry declineThe costs of wood fibre for the world’s pulp mills have trended downward the past two years because of reduced pulp and paper production, and in some regions, as a result of higher supply of lower-cost fibre. This trend continued in the 1Q/13 when the Hardwood Wood Fibre Price Index (HFPI) fell by 1.1 percent to $103.66 per oven-dry metric ton (odmt), which was 12 percent below the all-time high in the 3Q/11, as reported by the Wood Resource Quarterly.However, the price trends were mixed in the 1Q/13, with hardwood fibre prices lower in Asia and Eastern Canada and slightly higher in Europe and Latin America as compared to the 4Q/12. Eucalyptus pulpwood prices in Brazil have fallen more than in most other regions the past two years, with 1Q/13 prices being down over 30 percent since 2011. This dramatic decline has resulted in Brazilian pulp mills now enjoying the fourth lowest wood fibre costs in the world, behind Russia, the US South and Chile, respectively. The Softwood Wood Fibre Price Index (SFPI) in the 1Q/13 was practically unchanged from the 4Q/12 at $99.90/odmt. The SFPI has inched downward for seven consecutive quarters and is currently down 8.8 percent from the most recent peak in 2Q/11, according to the WRQ. The biggest changes in the 1Q/13 in US dollar terms were the declines in chip prices in Eastern Canada, Japan, Western Canada and the US Northwest. The biggest increases occurred in France and Germany. There has been an increased supply of residual chips from the sawmilling sector that has turned up the production levels over the past six months. This is the major reason for the declining prices in Canada and the US. Prices for wood chips in Canada have fallen more than 15 percent in just over a year. With improved markets for softwood lumber in the US, it is likely that the availability of lower-cost wood fibre for the pulp industry throughout North America will continue through the rest of 2013 and into 2014. Source: Wood Resources International LLC, www.woodprices.com  Mobile Technology Summit attracting primary industry specialists
For the first time in New Zealand, a mobile communications event is being run specifically for primary industries. MobileTECH Summit 2013 runs in Wellington on 7-8 August. An exciting two-day programme bringing together this country’s leading communications specialists, technology providers and those working in the primary industries, has just been released. Details can be found on the event website, www.mobiletechevents.com.A wave of innovations and productivity gains for businesses are being offered through new mobile communications technologies. Significant advancements in the day-to-day business environment have meant that many of the traditional operations within our primary industries have changed – and for some it seems, almost overnight. Improving communication networks, the use of cloud computing, better harnessing of machine to machine systems, wireless monitoring, enhanced quality satellite imagery and the integration of smart phones are continuing to reshape business. The speed of change is only going to increase and the opportunities are immense. As primary industries come to grips with just what the technology is, how it can be used, adopted and integrated into your existing operations and what’s being rolled out in the next 12 months, there are huge benefits in the country’s land and water based industries learning from each other. In agriculture, water access and irrigation issues have been a major driver of technology development within the industry. New tools like smart metering, crop sensing, spatial data and automated application systems has led to better water use and optimisation for our farmers throughout the country. For forestry, harvesting machines are being sent to specific forest stands to cut to order – and the order file is being changed by using satellite and mobile communications - in real time. This technology is a world first – and of course can be applied to other harvesting operations for land-based industries. Handheld devices, including smartphones, tablets and GPS devices have already become a crucial part of life for transport and logistics operators. These businesses are harnessing mobile technologies to improve their fleet management, scheduling and safety. The technologies being employed in the dairy, meat and wool or forestry industries again are world class and can be applied to most primary industries transporting goods or products to market. "We’re delighted with the calibre of presenters that have come on board for this year’s MobileTECH Summit 2013 says Ken Wilson, Connex Programme Manager, the organiser of the inaugural event. "Innovative companies including; Mobile Mentor, Alcatel-Laurent, GPS-iT, Hawkeye UAV, GeoSystems, Aerial Surveys, TreeMetrics, Lindsay International, IrrigationNZ, ECONZ, SST Software Australia, FarmIQ, NZ RFID Pathfinder Group and HitLabNZ will be discussing the very latest tools, platforms and technologies that can be used to improve the productivity and financial performance of local companies." Input to the programme design and support has also been given by major food and fibre industry associations, mobile communications providers, Government Departments and research institutes. These partnerships help to ensure that MobileTECH Summit 2013 will be a successful platform for disseminating new information and encouraging innovation and technology by New Zealand’s primary industries. Further details including the full programme and registration details can now be found on the event website, www.mobiletechevents.com Top New Zealand forest industry scholarship for 2013
The Southern Wood Council Forest Products Scholarship for 2013 has been awarded to a first year student, Cameron Alderton who is starting his first professional year at the University of Canterbury. From a sheep and beef farm in West Otago, Cameron, after completing a building apprenticeship five years ago is pursuing his keen interests in timber products and design and wood harvesting operations by studying for the four year Bachelor of Forest Engineering course at the School of Forestry. The annual scholarship awarded by the Southern Wood Council (SWC) is one of the most prestigious and valuable awarded to forestry students in New Zealand. In any one year, three SWC scholarships are together valued at $13,500. “The Annual Scholarship is an opportunity for forestry and wood products companies in the lower South Island to put back something into the industry and to support outstanding students studying towards either the Forestry Science or Forest Engineering courses at the School of Forestry” says SWC Chairman, Grant Dodson. “The SWC is delighted to award this year’s scholarship to Cameron and the industry is keen to continue to support all of the current scholarship recipients, both in their study – and in their future employment” says Mr Dodson. “In addition to this scholarship, the SWC also provides an annual award for the most promising modern apprentice employed in the forestry and wood products industry in the Otago/Southland region. This year’s award winner is to be announced at the 2013 Southern Wood Council Regional Graduation which runs in conjunction with Competenz in Balclutha on Friday 14 June”. (Photo: L-R: SWC Forest Products Scholarship Award winners, Sarah Naylor (2011), Cameron Alderton (2013) and George Ferguson (2012) JNL gets visible on NZ roads
Juken New Zealand Ltd (JNL) is the latest in a number of NZ Wood stakeholders to place the Put a Little Heart in It campaign visuals on one of its truck and trailer units.In addition to managing plantation forests in the Northland, East Coast and Wairarapa regions of NZ’s North Island, JNL manufactures a wide range of engineered wood (LVL, Plywood, Panels) and solid wood products – for structural and non-structural purposes, for external or internal uses, and for appearance or non-appearance finishes. The company operates four modern, efficient and environmentally clean wood processing mills and employs nearly 900 people. The "Put a Little Heart In It" campaign was originally launched in Dunedin last October, 2012 with the unveiling of a City Forests truck and trailer unit (see photo). The campaign has worked to lift the profile of wood and wood products across residential and commercial construction in New Zealand. The McAuleys transport truck which carries JNL products will further reinforce the benefits of timber as it travels across significant tracts of New Zealand on state Highway 1 and 2 from Kaitaia down to Cromwell in Central Otago. Source: NZWood.co.nz Forest industry to benefit from tree genome sequencing
Canadian and Swedish scientists have decoded the genome sequences of two of the world’s most economically important forest trees, a development that could sharply reduce the time required to grow the trees and help them resist pest infestation reports The Vancouver Sun.The two studies, which looked at the white spruce and Norway spruce genomes, will help develop innovative tools for tree breeding, and address economically and ecologically important targets such as insect resistance, wood quality, growth rates and adaptation to changing climate, said University of B.C. Prof. Joerg Bohlmann, a co-author of the two studies. “Scientists in B.C. and Quebec are already starting to use the genetic code of these trees to accelerate their programs, because of these studies,” Prof. Steven Jones, senior author of the white spruce genome study. According to co-author Prof. John Mackay of Université Laval, a genome-based marker system could reduce the time of the spruce breeding cycle from today’s 25 years to as little as five years, and “thus contribute directly to the competitiveness of the Canadian and Scandinavian forest industry.” Hungarian man builds wooden carIstvan Puskas is marking a mark with a car created almost entirely out of wood, built it over four months in his workshop in Tiszaors, Hungary. The fuel tank is an old beer barrel and even the suspension and gearbox are made out of wood. The car is powered by an engine from a Polish-made Fiat 126, while the steering wheel came from an old Mercedes Benz vehicle."I love to work with wood. And I like to create unique things which attract interest from people," says Mr Puskas. Mr Puskas, a 51-year old agricultural worker, was encouraged by his wife -- Iron -- to build the wooden wonder. Long winter breaks from farm work on the flat Great Hungarian Plains also gave him plenty of time to design and create the car. Amazon deforestation rate up 88 percentFor the last several years, deforestation rates in the Brazilian Amazon have been in steady decline, reaching its lowest point on record just last year. But despite this progress the latest figures show that we are not out of the woods yet - in a literal sense of that phrase, however, we are a little closer.According to the Brazilian forest monitoring agency, IMAZON, which uses satellite imagery to track deforestation in near real-time, the world's largest rainforest lost 606 square miles of rainforest between August 2012 and April 2013 - an area equivalent to nearly 300,000 football fields. All told, this latest figure represents an increase of 88 percent over the previous year in which 322 square miles was cleared. While a troubling turn in light of the steady decline of recent years, the rate recorded in this uptick still pales in comparison to record highs. At its peak in 1995, a total of 9,675 square miles of forest was lost in Brazil, though stepped-up enforcement and improved land management has led to a decline every year since 2004. Source: treehugger NZ building consents on the riseApprovals for 1755 new houses and apartments were issued last month in New Zealand, the highest monthly number for five years and 43 per cent higher than a year ago. Registered Master Builders' Federation chief executive Warwick Quinn said it was good to see consents on the rise, "but if you take away the growth in Auckland and Canterbury, it's still a reasonably flat environment, really". Economists said the jump in consents was partly due to the timing of Easter, which meant March's figures were probably understated. Even so, "underlying consent activity is strengthening", said Benjamin Patterson, of Infometrics. Source: Stuff.co.nz
Silvicultural options for high risk areasAn e-workshop in Scion’s Forests and Climate Change series is being held on Tuesday 11 June in Rotorua, New Zealand. The theme for this workshop is " Silvicultural Options for High Risk Areas". For more information click here.Brightwater reviewing Christchurch operationEngineering company Brightwater, which employs over 230 people throughout New Zealand and Australia, advised staff last week at its Christchurch manufacturing branch that it was commencing consultation over a proposal to close the branch, potentially affecting up to 25 jobs.Brightwater CEO David McGregor said the reason behind the proposal was due to the inability of the Christchurch operation to achieve profitability. “Despite the recent success within our Australasian engineering projects business, profitability in our manufacturing business has remained a challenge and we simply must take steps to address this.” Brightwater’s Christchurch branch currently manufactures the company’s range of mobile Forestry Cable Logging machines. Under the proposed change Brightwater would manufacture all future machines through its Nelson branch in order to reduce costs, making the manufacturing business more viable. More >> Jobs
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...and one to end the week on...Smokey Macgregor
There was a Scottish painter named Smokey Macgregor who was very interested in making a penny where he could, so he often thinned down his paint to make it go a wee bit further. And on that note, have a great weekend. Cheers. Brand PartnersOur Partners & Sponsors Friday Offcuts is made possible through the generous support of the following companies.
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