Friday Offcuts – 4 May 2012
Click to Subscribe - It's FREE! In a story this week we report on some fatal sawmill explosions in B.C. This along with recent reports on future wood supplies has thrown the province's forestry industry into turmoil. The beetle killed wood has until now found a ready market. The industry’s had to adapt to the changed wood resource but has fared reasonably well through its export markets. However, a report released last week by Vancouver-based consultants International Wood Markets, shows the beetle has already killed 59 per cent of the Interior pine forests.Time’s now running out for many sawmills to economically process the wood into lumber. The remaining dead timber is becoming marginal for many sawmilling and plywood operations to process economically. On top of this, timber supply to remaining mills is coming under increasing pressure. Tensions are mounting with the Government proposing to free up protected forests to logging in order to assist the local industry and communities dependent on forestry for their livelihood. Adding to this the BC forestry industry has been rocked recently by two fatal explosions that have killed four men and injured dozens more in the province’s Northern and Interior sawmills. This isn’t the first instance. At least five explosions linked to wood dust have rocked B.C. wood manufacturing plants since 2009. The likely cause is the extremely fine dust resulting from milling the long standing dead timber. Concerns over respiratory issues have been raised in the past but now it’s been singled out as a possible high risk for combustion. Changes taking place in the quality of pine beetle wood available for processing as well as the future availability of the wood resource is now a source of real and growing concern by the B.C. forest products industry. Much closer to home, news came out mid-week that the New Zealand Superannuation Fund is joining forces with a global investment firm, GMO Renewable Resources, to bid for full ownership of the cutting rights to the country's largest commercial forestry estate, the 170,000ha Kaingaroa forest. In Australia, Gunns shares are still in a trading halt - more than seven weeks now - as it still works on a plan to negotiate a $400 million capital raising and in Tasmania, despite the June deadline, it was revealed this week that negotiations between forestry and environmental groups to finalise the boundaries of new native forest reserves under Tasmania's peace deal haven’t yet started.
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Beetle dust in BC a cause for industry concernSawmill explosions in the B.C. Interior have thrown the province’s forest industry into turmoil, raising concerns that the mountain pine beetle’s damage to the sector may be entering a new and more deadly phase. The potential for dry beetle-killed wood to pose a safety hazard comes at a time when the industry is struggling to cope with pine beetle impact.“We are in new territory,” said John Allan, president of the B.C. Council of Forest Industries. “These two mills blew up. They just didn’t catch fire. “The beetle has infected every aspect of the business,” Allan said Thursday. WorkSafeBC has issued an order that all B.C. sawmills conduct a complete inspection for dust buildup. The industry also commissioned new research to determine what is a safe level of dust in sawmills after the two explosions that killed four people. Up until now, the safety focus on sawdust has been only on the hazards of breathing it in. Forest industry officials have also asked researchers based at the University of British Columbia to determine what role aging pine beetle wood, and the fine dust it produces when milled, might have played in the two recent explosions at sawmills in northern B.C. For more information, click here Tasmanian forestry peace talks yet to startIt was reported this week that negotiations to finalise the boundaries of new native forest reserves under Tasmania's peace deal have not started yet, despite the June deadline. Forestry and environmental groups met earlier in the week for the second time since they received a comprehensive review of the forest industry. The West Report outlines the conservation value of 572,000 hectares of forest proposed for protection from logging. The parties say they have only been negotiating measures to ensure any agreement lasts.Jim Adams from Timber Communities Australia says "there will be no talk about those things until FIAT (Forest Industries Association of Tasmania) is back in the room." FIAT walked away from talks in protest against overseas campaigns by green groups targeting its customers and isn’t convinced at this time that the campaigns are going to stop anytime soon. MAF now Primary IndustriesA name that's been part of New Zealand forestry for a very long time, the Ministry of Agriculture & Forestry, is now officially consigned to the past. This week MAF became the Ministry for Primary Industries. It's the result of Food Safety and Fisheries merging into MAF, bringing all the Government primary industry bodies under one umbrella.Panel investments in the Asia Pacific regionAsia’s dominant position in the global panel demand and supply cannot be challenged, but in the future the real game changes will be raw material supply security, uncertain and high cost energy, access to the state-of-art technology and best-in-class industry practices.The demand for wood panels originating from Asia Pacific accounted for more than half of the global demand in 2010, by far overtaking Europe, the historical leader. 76% of the 2010 Asian Pacific demand came from China. Undoubtedly, China is set to experience the highest growth rates in the next decade making the gap between them and the Western world even more pronounced. At the same time, China has an insufficient domestic wood fibre supply, and massive new demand for energy, which create a huge challenge for local panel producers. In response, the renewable bioenergy appetite for woody biomass has started to add pressure to the already felt fibre supply imbalance. For a number of industry leaders Asia Pacific remains earmarked as the strategic direction, however the region continues to be both an opportunity and a huge challenge for investors. The new investment hot spots continue to emerge in Asia Pacific, although many investors either had their fingers burnt in the past or continue to wait for the return on investment. Nevertheless, the local producers are in acute need of the access to the state-of-art technologies as well as best-in-class management practices, especially supply chain management and sustainability. Against this background, Pöyry Management Consulting has decided that it is the right time to publish the new Pöyry Viewpoint report entitled ‘The Asia Pacific Panel and Surfacing Industry – Investment Hot Spots.’ The report will be ready in autumn this year and, based on an extensive programme of direct dialogue with key industry players, will provide an in-depth analysis of the fundamentals of the local market, industry and fibre supply dynamics. Dr George Goroyias, the newly appointed Head of Wood Products Asia Pacific at Pöyry Management Consulting said: "This industry Viewpoint report aims to address key questions for investors and to provide direction on where growth opportunities in the Asia Pacific region are. It also identifies challenges and how best to address them. It is a strategic analysis that every CEO who is planning investment in the Asia Pacific region should read and use to stress test their growth plans. China will continue to be a major industry paradigm shift, driven not only by its booming demand but also by re-examining the sustainability of traditional trade flows of raw, semi-finished and finished products to and within the APAC region." "The anticipated increase in China's panel production is going to put enormous pressure on regional resources and energy to satisfy this demand", said Rudolf van Rensburg, Head of Land and Forests Asia Pacific at Pöyry Management Consulting. "Commonly South East Asia is seen as the platform to grow incremental volumes but the reality is that land availability will seriously constrain possibilities. What we are seeing in the market at present is that CEOs are contending with diverse strategies to address sustainability and profitability concerns. The future of fibre supply security rests with those companies bold enough to take strategic supply chain and resource positions." For more information and report brochure, please contact Dr George Goroyias at www.poyry.com.au.
New veneer drying system from FinlandA new type of contact drying method has been developed at Aalto University in Finland. A new research paper outlines the method and presents experimental results from tests with the new drying method. The drying system consists of a hot upper plate, a cold bottom plate, a vacuum inside the drying chamber and a mechanical press. An experimental drying device was built and used in a study to compare the new method with the currently used drying methods. The study includes drying time experiments and tests on veneer quality.The results were compared to veneers which had been dried in a convective dryer. Compared to conventional convective drying, the new method decreased the total drying time significantly, by approximately 50%. The preliminary tests show that the quality of the veneer was not compromised in the drying process. The new method could be used in the plywood and LVL manufacturing process, as well as in special drying applications. The results showed that the new system was a viable drying method and there is potential for improvements in the veneer manufacturing process. For full details on the story and link to the study, check out the latest R&D Works Newsletter
Stunning wooden mountain bikes - made in NZ
New Zealand Pine is not something usually associated with mountain bikes – except as a forest venue for some of the country’s main trail networks. But now Red Stag Timber from Rotorua, home of one of the very best of those trail networks, has combined with Renovo in Oregon, USA, a world leader in wooden bike construction, to build two beautiful new bikes. “We heard about Renovo from one of our customers,” says Red Stag’s Marketing Manager, Phil Lindsay, “and it started us all thinking about how a wooden bike would be a great way to demonstrate that New Zealand Pine is a 21st century construction material that can match the performance of steel or carbon fibre in a demanding environment like mountain biking.” The process started over a year ago. Fifty pieces of one metre long timber were selected from standard New Zealand building grade, SG8, and sent to Renovo in November 2010. The plan was to construct three wooden mountain bike frames; a race bike, a training bike, and a test-to-destruction bike. “The test-to-destruction bike was to make sure the performance of New Zealand Pine was up to Renovo’s standard as they hadn’t worked with the species before,” says Lindsay. During the testing, the concept of a 100% New Zealand Bike had to conform to the realities of mountain biking. The frames take a bashing from general trail riding and especially when the rider crashes. New Zealand Pine has the stiffness and the strength to stand up to the rigors of mountain biking. However, it doesn’t have the surface hardness - which meant a fair number of dents during trials. “But Renovo know their stuff and had a solution that has really added to the final look and strength of the bikes.” Renovo laminated a layer of Walnut (for elegant good looks) and Hickory (for surface hardness) onto the outside of the main triangle of the frame. They also built the rear triangle entirely out of Hickory. This means the main triangle takes the key loads through the New Zealand Pine with the durability of Hickory taking the knocks. This clever and beautiful combination has resulted in one of the lightest frames Renovo have built - in spite of it being extra-large size. “If you are going to do this sort of thing you might as well do it right,” says Lindsay. “What better way to stress test a new frame than putting it in the hands of a test rider who is 6’5” (1.95m)?” That rider was Patrick Avery. Patrick used the training bike in the Whaka100 50km race in late October, placing 4th in his class. Not bad for a first outing. Over the summer, the bikes will be competing in a range of events with different riders to showcase their versatility and durability. “These events will all be a perfect testing ground for the Red Stag/Renovo bikes,” says Lindsay. “And you will see it on training rides in Rotorua’s Whakarewarewa Forest, near the Red Stag Mill at Waipa where the whole concept started 18 months ago.”
Improving Wood Transport & Logistics
The very popular independent ForestTECH technology series has been run annually for forest managers and technical foresters since 2007. After the inaugural events were run in New Zealand and Australia, the ForestTECH programme was split into two complementary components. The very latest field data capture tools, forest sampling and inventory systems, remote sensing technologies and forest management & estate planning provided the focus for the first year. The other looked at advancements and improved practices in genetics and tree breeding, nursery technologies, land preparation and plantation silviculture. Together, around 200 forest resource and inventory foresters attended ForestTECH 2011. The event ran in both countries with the focus on remote sensing for improving forest inventory and management planning. Feedback from both the 2010 and 2011 events suggested we combine the two streams back into a larger ForestTECH event looking at the full spectrum of innovative tools and technologies that have been developed to improve forest management operations. This combined technology event is scheduled to run in late 2013. ForestTECH 2012 will instead focus on improving transport and logistics in the forestry sector. It will build on the excellent wood supply chain technology events that were designed by the Forest Industry Engineering Association along with forestry companies and logistics specialists. The last independent wood supply chain event for forest products companies ran in May 2010. So, what is ForestTECH 2012? Like the Wood Supply Chain Optimisation technology series, ForestTECH 2012 will be targeting key decision makers from forestry and wood products companies. It will provide long overdue and practical updates on innovations, strategies and technologies that are being used by forest products companies to improve planning, logistics and operations within the wood supply chain. It will run in Australia on 28-29 November and again for NZ forest products companies on 4-5 December 2012. Further details can be found on www.foresttechevents.com. At this stage we are seeking EOI from interested companies, organisations and individuals who are this year keen to be involved – in presenting, in exhibiting or who have comments or suggestions on the programme design, to make contact with FIEA Director, Brent Apthorp at brent.apthorp@fiea.org.nz BEFORE Friday 1 June. Psssst...want some tickets to the State of Origin?
The 2012 Harvey Norman State of Origin Rugby League Series kicks off at Melbourne's Etihad Stadium on Wednesday 23rd May. The 2011 State of Origin series was apparently one of the best ever. The 2012 series is also expected to be fiercely contested. Coincidentally, this coincides with wood treatment companies from about Australia being in town for the three yearly event, Wood Preservation 2012. A large cross section of timber companies are going to be heading down to the game. A small number of tickets booked for the evening as part of Wood Preservation 2012 are still available to the wider industry. So, if you’re in town, you want to join others from within the industry and go watch a great game of footie, contact libby.stulen@fiea.org.nz. Tickets will be sold at face value - $50 each - and will only be allocated on a first come-first served basis. Better be in as these are likely to be snapped up quickly. Building activity update US building activityBuilding approvals in the US are, for the third month in row, trending upward. Approvals for March are up 4.5% on the month before and 30% year-on-year. March figures are the highest they have been since 2008 before the Global Financial Crisis. Approvals in the US have been trending upward since early 2011, following a small double dip in housing figures out of the US. Starts on new houses in the US were down in March on the previous month, 5.8%. This is the second consecutive month now that start figures were lower. However, the March figure was up 10.3% year-on-year, and the highest March figure since 2008. The US housing market is a little slower to recover from a bumpy bottom than many would like. With cheap existing housing available right now and record low interest rates to new home buyers many are feeling pressure to step onto the property ladder. Australian building activity Australian new dwelling approvals continue their downward trend that they have been on since early 2010. Despite a small lift in approvals in late 2009 after the 2008 dip when the Global Financial Crisis hit Australian building markets have been in a steady decline. As in every other market where we monitor building activity there is clear picture that shows a double dip recession having occurred in late 2008 and in 2010/2011. Here in New Zealand most market watchers have seen the Christchurch earthquake as a reason for slow building activity in early 2011, however this trend exists in the US and Australia also. Australia seems to be the last of the markets we monitor to climb out of the latest slowdown in activity. New Zealand building activity The New Zealand’s building industry remains very weak despite the market price for properties in some key regions lifting. There was a very small gain in new residential and non-residential figures for February, this was of course helped by a dip in December and January months that have fewer working weeks for consents to be lodged and or processed. A significant number of units were part of this number, mainly retirement villages that boost numbers. Floor area consents for residential dwellings were up in February on the previous month, as were non-residential consents. The combined figure for floor area was also up year-on-year. This was however the second lowest February figure in the past five years, second only to the 2011 February figure. Source: NZX Agrifax at www.nzxagri.com/agrifax NZ ETS consultation underwayIn NZ over the last couple of weeks, a series of regional meetings on the future of New Zealand's ETS were held by the Ministry for Agriculture and Forestry. The consultation period closes on 11 May. Click here to download the consultation document.Proposed changes include restricting the number of international credits that can be used in the scheme, allowing pre-1990 forest land to be cleared and replanted in other places without incurring a carbon liability, extending provisions like the allocation of free credits to industrial emitters and the $25-per-tonne price cap on carbon, and possibly further delaying the entry of agriculture into the scheme. One of the most controversial aspects in the consultation is the proposal by Government to reduce or cancel altogether the second tranche of compensatory NZUs that were to be allocated to owners of pre-1990 forests, which are now permanently locked into forest use, but which are not able to earn NZUs on an on-going basis. The rationale for the claw back is that because it looks likely that the Government will now introduce a pre-1990 forest "offsetting" option, land-use flexibility (and hence value) may not been affected to the same extent as originally anticipated. Under the new proposal owners of pre-1990 forests can change land-use and avoid the liability for carbon loss by planting out new forest elsewhere. However critics rightly note that this is not a costless exercise. For the New Zealand carbon industry, the biggest item on the agenda should be to get a clear signal from Government on the likely "cap" which will determine the supply to be auctioned, and what this will mean for demand for forest carbon abatement. Currently we're all working in a black hole. Source: Carbon Match, www.carbonmatch.co.nz
NZ Super Fund reviews Kaingaroa forestThe New Zealand Superannuation Fund, which was set up to pre-fund the pension liabilities of the baby boomer generation, is in talks with Harvard University's endowment fund manager to take full ownership of the Kaingaroa forest estate.The so-called 'Cullen' Fund, named for its architect Michael Cullen, and global investment firm GMO Renewable Resources are in discussion with Harvard Management Company "over the possible purchase of Harvard's majority stake" in the forestry assets, the pension fund said in a statement. The Harvard fund, with some US$32 billion of assets, owns 60 percent in the 170,000 hectare estate in the Central North Island, with the NZ Super Fund holding the remainder, which it bought in 2006 for $300 million. Kaingaroa is the super fund's biggest single investment, and part of its $1.26 billion timber investments, which include international timber holdings. The forest estate was singled out as one of the fund's best performing investments in the 2011 financial year, generating taking almost $3.5 million in its share of profits. More>>
NZ and Russian wood exports to China dropOver the past decade, China’s fast expanding economy and boom in housing starts lifted the country to being the world’s largest importer of sawlogs and the second largest importer of softwood lumber, after the US, as reported in the Wood Resource Quarterly (www.woodprices.com). China has increased the importation of logs and lumber practically every year for over ten years, with lumber imports in 2011 being 15 times higher than in 2001 and log imports being up three-fold from ten years ago.The total value of imported logs and lumber increased from 630 million dollars in 2001 to almost eight billion dollars last year. This constant upward trend in importation came to a halt in late 2011 when construction activities slowed and inventories of logs and lumber at many Chinese ports reached very high levels. As a result of lower demand for wood products, softwood log import volumes during the first three months of 2012 were down 11 percent from the same period last year. Log shipments from the two largest supplying countries, Russia and New Zealand, have declined by 16% and 17%, respectively, from a year ago. However, not all log suppliers to China have been hit by the reduced log demand in the country. Both Canada and the US have increased exports dramatically the past few years, and this trend continued into the first quarter of 2012, when exports from Western Canada were up 23% from 1Q/11 and the US shipments were two percent higher than in early 2011. Softwood lumber imports have shown a similar trend to that of logs, according to the Wood Resource Quarterly. In 1Q/12, North American softwood lumber accounted for as much as 55% of all imports, up from only 25% in 2007. China is likely to continue to rely heavily on North America for particularly lumber but also increasingly for logs over the next few years. When the US housing market, and as a consequence, lumber demand, eventually improve, available wood supply will tighten and costs for logs and lumber are likely to go up. This expected scenario may change how China sources logs and lumber in the future. Source: Wood Resources International LLC, www.woodprices.com Luxury tree houses selling for £250,000
Even for those already living the highlife, owning one of these luxury tree houses would be a real tree-t. At £250,000 each, these fairytale treetop palaces are the latest in a global trend for bespoke garden living, claims their English designer.They include a James Bond style safe-house with CCTV and biometric security systems, fairytale castles and forest-getaways for home county executives. Director Simon Payne, 33, of Tunbridge Wells-based luxury tree house company, Blue Forest, has helped both children and adults create their Robin Hood Prince of Thieves-style forest kingdoms. 'It’s been tough economically for the country,' said Simon. 'But we are finding that private clients at the top-end of the market can still afford luxury. 'Many of our clients are wealthy CEO’s and celebrities who want to make the most of their secluded gardens. At the other end of the market we do find that people want value in their design - which for us is part of the creative challenge. 'When we started our business seven years ago our work centered on tree houses designed for children to play in. 'Now we are increasingly finding that it’s big kids who want a place to retreat to and play in.' For more images click here Source: Mailonline  Jobs
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...and one to end the week...three wise women
And on that note, have a great weekend. For those Kiwi's out for the opening of duck shooting season tomorrow, lets be careful out there. Cheers. Brand PartnersOur Partners & Sponsors Friday Offcuts is made possible through the generous support of the following companies.
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