Friday Offcuts – 3 May 2013
Click to Subscribe - It's FREE! On Tuesday evening, Tasmania's Parliament finally passed crucial legislation for the forestry peace deal. Thirty years of conflict in the State and more than three years of heated negotiations between industry and environmental groups passed the final hurdle. Earlier this month, the Upper House supported the legislation but had made significant amendments and to its credit, the State Government had offered a range of sweeteners to help get the deal across the line. It was only on Tuesday morning that the signatories announced that they’d be backing the amendments. As a compromise to all involved in getting the deal done, it’s an excellent outcome for the forestry industry, environmental groups and for Tasmania. Further coverage through links supplied in this week’s lead story have been supplied.We reported last week on the sale of 11 North Island forestry blocks by the New Zealand Superannuation Fund to a Chinese company. The fund wanted to focus on other investment opportunities. For the Chinese company, already one of the country’s largest wood buyers (around 75,000m3 of logs per month which are being used in the company’s own processing, manufacturing and distribution operations) it was an opportunity of securing part of its future wood supply from its own forests. China Forestry Group NZ, a wholly owned subsidiary of China Forest Group Corporation, said it was a "first step in their strategy to invest in the NZ forestry industry and in time, to explore other profitable opportunities to add value to its NZ forest assets". Forestry for New Zealand is already the second largest export earner to China behind the dairy industry. Although purchasing forests rather than investing in wood processing within New Zealand is more appealing to Chinese investors right now, it appears that mounting environmental and cost issues (rising energy, land and labour costs) are increasingly motivating Chinese businesses to look more closely at processing in New Zealand. The Chinese are looking to move intensive energy industries offshore – which will fundamentally change how they’ll be investing in forestry and wood products businesses in future. With the investment theme this week, New Forests has just released its new publication, Timberland Investment Outlook, 2013-2018. As reported, Timberland has been growing in favour among institutional investors due to the attractive characteristics of the asset class. It’s grown substantially in size, from about US$20 billion in 2000 to approximately US$80-90 billion of timberland assets under management today. Over the past decade approximately US$7 billion of institutional timberland investment has flowed into Australia and New Zealand. Over the next five years, New Forests see about one-half of timberland transactions occurring in the extensive US timberland market, with another 25% of transactions in Australia and New Zealand, and about 25% of transactions in the rest of the world. As covered in the lead story this week, it’s likely we’re going to see a resurgence of investment, particularly from Asia, as they look to secure strategic access to raw material and reduce timber price volatility by going upstream and acquiring assets. In some regions like Australia, Latin America, and Asia, timberland investment may also increasingly be linked with ownership of processing facilities as part of managing market risk. The new 32 page report can be downloaded from this week’s story.
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Tasmanian Parliament backs forest peace dealTasmania's Lower House has passed historic legislation designed to end 30 years of conflict over logging in the state's native forests. Tasmania's Parliament passed the crucial legislation on Tuesday evening, 13 votes to 11. The final deal will bring almost AU$400 million worth of state and federal funds to Tasmania to restructure the industry and create new reserves.Key environmental groups were upset at the changes made by the Tasmanian Upper House and only decided to support the deal at the last minute. Resources Minister Bryan Green now has 30 days to table an order to start the process of reserving the forests. The legislation does not need to go back to the Upper House. Chinese company keen on additional NZ forestsAs reported last week, the New Zealand Superannuation Fund announced last week that they had sold the bulk of 11 forestry blocks in the North Island to China National Forest Products Trading Corp for an undisclosed sum, with the remaining going to local investors.The forestry estate comprises some 13,600 hectares of which around 10,400 are productive. The two largest blocks are Rototuna Forest on the Kaipara Habour’s Kauri Coast and Coroglen on the Coromandel Peninsula. Smaller blocks are located around Raglan; Rotorua; Waimata, Gisborne and Wainuioru in the Wairarapa. China Forestry Group New Zealand, a subsidiary of state-owned China Forest Group Corp, is reported to be keen on purchasing more local forests after buying the forestry blocks from the New Zealand Superannuation Fund. The North Island forest estates are the first step in the Chinese company's strategy to invest in the local industry and look at other opportunities, it said in a statement. "China Forestry Group NZ will establish a permanent base in New Zealand in order to manage the newly acquired forest estate," Lin said. China Forestry Group NZ director Graeme Wong said it sees the acquisition as a long term investment to retain continuity of supply. China Forestry Group NZ have appointed two New Zealanders as directors; professional company director Graeme Wong and Mark Chennells, who has been involved in the investment industry in New Zealand and China for over 25 years. New Forests issues new Timberland Investment Outlook
New Forests has released its new publication, Timberland Investment Outlook, 2013-2018.
Timberland, along with farmland, infrastructure, and other real assets, has been growing in
favour among institutional investors due to the attractive characteristics of the asset class.
The publication focuses on key trends in institutional investment into timberland and provides recommendations on the development of internationally diversified timberland portfolios. The report also explores key trends in the forest sector, including the international supply-demand picture, potential for new markets for biomass from forests, and the growing role of sustainability in forest management. The report is a follow-up to New Forests’ first Timberland Investment Outlook, released in 2011. New Forests research suggests that US$50-60 billion dollars has now been invested worldwide in unlisted timberland vehicles, and the asset class is set to grow by US$6-7 billion per annum over the next five years. While much of the investment to date has been in US timberland, the next five years will likely see half of new investment flowing outside the US, principally in Australia, New Zealand, Latin America, Europe, and Asia. At the same time, the global forestry sector is expanding and restructuring to accommodate growing demand from Asia for a range of wood products, as well as a rebound in US housing. The next five years may also see the steady growth in a range of new markets for bioenergy, biofuels, and bio-materials. New Forests’ Outlook suggests that timberland investors will need to navigate a maturing asset class and position their timberland portfolio to gain from shifts in market conditions and competitive dynamics to be successful. “There are a number of trends taking place in timberland investment, the forest sector, and in regional markets that make it clear that the timberland asset class is and will remain a dynamic marketplace with plenty of opportunities,” said David Brand, Managing Director. “Our Timberland Investment Outlook discusses the key issues and opportunities that investors face in building a timberland portfolio. Ultimately, we believe investors must seek out local expertise and take account of risk factors including currency risk, physical risk, business and political environment, and market conditions.” The full report can be downloaded by clicking here New forestry board to form SA strategic blueprintA new state forestry board will provide advice and recommendations to the South Australian Government about future strategic needs. The Minister for Forests, Gail Gago, has appointed a seven-member South Australian Forest Industry Advisory Board, which includes south-east representative Ian McDonnell. It replaces the Roundtable and the Development Industry Board. Ms Gago says the board will look at developing a strategic blueprint for the future of the south-east industry. She says the board will be responsible for providing advice and recommendations to the Government.BC’s BID Group acquires controlling interest of COMACT
The BID Group of Companies, based in BC announced it has acquired controlling interest of Quebec-based COMACT. With the combined sawmill equipment design, manufacturing and delivery capabilities it is now one of the largest North American companies of its kind.Together, the companies will operate over 250,000 square feet of manufacturing plants and employ approximately 750 employees. COMACT will continue to be based out of Quebec and operate under the COMACT brand. All other operating divisions of the BID Group, including Nechako Construction, Nechako Mechanical, Sawmill Equipment Company (SEC) and Deltech Manufacturing will also continue business as usual under their respective operating names. Brian Fehr will continue on as CEO of the parent company BID Group. As part of the transition, Pierre Morency assumes the role of Chairman of the Board of BID Group. As well, Simon Potvin becomes Senior VP Manufacturing and Eric Michaud becomes Senior VP Sales & Marketing of BID Group, respectively. “We are very excited for COMACT to be part of the BID Group family,” said Simon Potvin. “Much like BID, COMACT now has greater flexibility for manufacturing and shipping on the other side of the continent, with the added benefit of expanding its business by leveraging BID’s extensive turn-key experience and capabilities,” Potvin explains. About BID Group With over 30 years of experience, the BID Group has established itself as a leader in a variety of value-added, turn-key solutions for the forestry industry. BID’s services include engineering, industrial fabrication, construction and maintenance as well as green energy systems and lumber remanufacturing. About COMACT With over 50 years of experience, Comact has established itself as a leader in a variety of equipment manufacturing, optimization and engineering solutions for the forest industry. Comact services include automated controls and optimization, engineering, fabrication and field crews. Changes in water use following pruningPruning of live branches is a management option to enhance wood quality in plantation trees. It may also alter whole-tree water use, but little is known about the extent and duration of changes in transpiration.In a recent study, sap flow sensors were used to measure transpiration for 14 days prior to, and 75 days following the removal, through pruning, of the lower 50% of the live-crown length of 10–11 m tall four-year old Eucalyptus pilularis Sm. and E. cloeziana F. Muell. trees. Pruning had no effect on stem growth, sapwood water content or radial pattern of sap velocity in either species. Pruning reduced mean daily water use by 39% in E. pilularis and 59% in E. cloeziana during the first eight days after pruning. Thirty six days after pruning there were no longer any significant differences in transpiration rates between pruned and unpruned trees in either species. Results show that pruning of live branches had only a short-term effect on whole-tree transpiration in these sub-tropical eucalypt species. For more information on this research, click here. Russia to invest US$13B to attract forestry investors
Russian president Vladimir Putin has pledged US$13 billion to make the country's forest sector attractive to investors, and to finance priority projects, RIA Novosti reported. Putin said the funding would be invested in 118 projects that had been given priority status in a plan to address the industry's long-term problems.Russia’s forestry industry has been negatively affected by poor governance, low investment potential and growing sales of illegally-felled timber, RIA Novosti reported. Data from WWF Russia and the World Bank estimates that up to 20% of logging, representing about 35 million m3 of timber is illegal, resulting in an annual loss to Russia's economy of US$420-$970 million. Putin said the existing system for forestry project selection favours large production facilities for timber processing, and should be revised to accommodate small and medium businesses. He also called for more severe punishments for illegal loggers. The first step, said Putin, would be to implement a system of accurate monitoring, then tougher measures would be defined for those who "barbarically destroy the forest.” He estimated that illegal felling had increased by 66% in the past five years, describing the level as "colossal". ,br> The president said more than 7,000 people were fined for illegal logging in 2012, but only 2% of the estimated 10 billion rubles in damage was recovered. Source: RIA-Novosti Wood pellet shipments reach record highs The wood pellet export industry in North America has grown exponentially in a relatively short period of time. The export value has increased from an estimated 40 million dollars in 2004 to almost 400 million dollars in 2012. This fairly new trade development is the result of Europe’s quest to reduce its dependence on fossil fuels and to reduce CO2 emissions. Energy generation from renewable resources has, with varying pace, gone up in all countries in the EU the past decade.Woody biomass, including wood pellets, is one energy source that has attracted both much attention and investments in a number of countries on the European continent. With limited domestic wood raw-material sources, countries such as the UK, Belgium and the Netherlands have increasingly relied on the importation of industrial wood pellets to reduce the usage of coal at some of their power utilities. The relatively high costs for wood pellets in Europe have resulted in increased interest in importing pellets from British Columbia and the southern states of the US where wood raw-material costs are lower than in Europe. A record volume of 3.2 million tons of pellets was exported from North America to Europe in 2012, according to the North American Wood Fiber Review (www.woodprices.com), which compiles and publishes pellet trade volumes based on surveys of pellet exporters and customs data in North America and Europe, each quarter. From the US South, shipments were up over hundred percent compared to 2011, while Canadian exports increased 25 percent year-over-year. The expansion of pellet production has been particularly noteworthy in the US South where there have been 14 new pellet plants that are either new or planning to expand production in the coming year. Source: Wood Resources International LLC, www.woodprices.com. MDF surges forward in global panel industryGlobal non-structural panel capacity has surged in recent years, led by new MDF capacity in China and South America. While MDF is still behind particleboard in terms of overall production capacity, it has been rapidly gaining on its more mature counterpart.In 2012, the estimated global production capacities of particleboard and MDF were 97.9 million m3 and 87.8 million m3 respectively. Particleboard, first manufactured during the Second World War and used commonly since the 1960s, is now a mature product whose growth has slowed in most world regions. From 2002 to 2012, global particleboard capacity expanded by about 22%. MDF, in contrast, entered large-scale production in the 1980s and is still on an upward trajectory globally. Its capacity has grown much more rapidly — +137% over the same period — and further growth is planned for the immediate future. In terms of regional capacity, Europe leads in particleboard while China leads in MDF. Growth-wise, China, South America and “other Asia” have been the fastest-growing regions for both non-structural panel products over the last decade. Europe has also seen capacity expansion, although most of this has been in Eastern Europe (including Turkey and Russia). OSB’s primary use is in wood-frame house construction, where it is most dominant in North America, and, to a lesser extent, Europe. Global capacities are smaller: about 30.3 million m3 (34.2 billion sf, 3/8" basis). Although OSB was developed at around the same time as MDF, its growth appears to have flattened. This difference is explained mainly by the fact that the bulk of global OSB use is in U.S. housing construction, a sector hard-hit since 2007. Going forward, the upgrading/restarting of current panel plants will take priority over new capacity additions in most producing regions. In Europe and North America, mills curtailments in recent years have left the industry operating well below capacity. As demand recovers (first in North America and eventually in Europe), unused capacity will be restarted before new capacity is built, and it will likely take several years before significant pressure is put on the supply/demand balance and prices. In particular, OSB capacity is forecast to remain flat as curtailed mills start up through 2017; although production has been soaring since 2011, capacity growth will not start rising until 2017–2018. Newly industrialized regions such as China, developing Asia, South America and Eastern Europe (the latter two enjoying the advantage of abundant raw materials) will continue to lead in panel capacity growth. However, given sluggish export markets and uncertainty within domestic economies, producers are more likely to focus on modernization and incremental investments, such as ones that improve product quality and mill efficiency. This year and next will see global panel producers proceeding cautiously. Source: International Wood Markets Group, www.woodmarkets.com NASA satellite launch planned to assess world’s ecosystems
To Robert Green, light contains more than meets the eye: It contains fingerprints of materials that can be detected by sensors that capture the unique set of reflected wavelengths. Scientists have used the technique, called imaging spectroscopy, to learn about water on the moon, minerals on Mars and the composition of exoplanets. Green's favorite place to apply the technique, however, is right here on the chemically rich Earth, which is just what he and colleagues achieved this spring during NASA's Hyperspectral Infrared Imager (HyspIRI) airborne campaign."We have ideas about what makes up Earth's ecosystems and how they function," said Green, of NASA's Jet Propulsion Laboratory in Pasadena, Calif., and principal investigator of the campaign's Airborne Visible/Infrared Imaging Spectrometer (AVIRIS) instrument. "But a comprehensive understanding requires us to directly measure these things and how they change over landscapes and from season to season." Toward that goal, scientists and engineers ultimately plan to launch the HyspIRI satellite - a mission recommended by the 2007 National Academy of Sciences Decadal Survey - to determine the spectral and thermal characteristics of the world's ecosystems, which are sensitive to changes in vegetation health, as well as detecting and understanding changes in other surface phenomena including volcanoes, wildfires and droughts. Prior to flying the sensors in space, however, preparatory science investigations are underway using similar sensor technology installed on NASA's ER-2, a high-altitude aircraft based at NASA's Dryden Aircraft Operations Facility in Palmdale, Calif. The first season of the HyspIRI airborne campaign concludes on April 25 after about a month of flights that spanned the state. Additional sets of California flights are planned for this summer and then this fall. More >>
NZ's Environmental Standard on forestry deferredAfter four years of work on the National Environmental Standard on Plantation Forestry (NES) cabinet has decided to defer further work on the proposed NES and review the need for it once the 2013 resource management and water reforms have been completed.Cabinet has asked the Ministry for Primary Industries to build on the NES work done to date with the forestry industry and stakeholders, and identify tools over the next year that can help ensure consistency in planning and environmental outcomes. There is more information about this on their website. The Minister will be reporting back to Cabinet on the NES work in June 2014. For information on the 2013 resource management reforms visit www.mfe.govt.nz/rma/reform/phase-two/2013-consultation.html and for information on the 2013 freshwater reforms please visit: www.mfe.govt.nz/issues/water/freshwater/freshwater-reform-2013/. Stradivarius trees - searching for perfect musical wood
Switzerland is home to some of the best violin makers in the world. But how do they know which tree will make a top quality violin? A wander through the forest with a master tree picker gives an idea of the enormous experience and instinct required.Just any tree will not do when combing a forest in Switzerland for the perfect musical wood - its age, the weather and even the position of the moon help to craft the warmest, fullest notes. More >> NSW manufacturers eligible for new fundingManufacturing firms will be eligible for a new round of funding under the AU$6.7 million Innovate NSW state government program. News Limited reports the new initiative will be considering funding applications from a range of small to medium companies, providing grants up to AU$15,000.The program will also contribute funding up to 25 per cent of project costs, to a maximum of AU$100,000, for companies looking to develop new technology. NSW Deputy Premier Andrew Stoner said the program was aimed at supporting new and innovative technology in the state's primary industries. It will also help companies collaborate with other researchers, larger corporations, and consumers to help lead the development of new products. “Local businesses will have access to world-leading knowledge and capabilities and will be provided with a low cost, low risk opportunity to trial and fine tune their solutions with major companies and government partners,” Stoner said. Jobs
Buy and Sell
...and one to end the week on...look at the labels
In case you needed further proof that the human race is doomed through stupidity,
"Do not turn upside down." (well...duh, a bit late, huh!) ========================== On Pick n' Pay's peanuts -- "Warning: contains nuts." (talk about a news flash) ===========================
"Do not drive a car or operate machinery after taking this medication." (We could do a lot to reduce the rate of construction accidents if we could just get those 5 year-olds with head-colds off those bulldozers.) ========================== On a Marks & Spencer Bread Pudding "Product will be hot after heating." (...and you thought????...) =================================
(That's the only time I have to work on my hair.) ====================================
You could be a winner! No purchase necessary! Details inside. (the shoplifter special?) ===========================
"Directions: Use like regular soap." (and that would be???....) ============================ On some Checkers frozen dinners - "Serving suggestion: Defrost." (please note that it's just a suggestion.) ========================
" Don't iron clothes on body." (but wouldn't this save me time?) ==============================
"Warning: May cause drowsiness." (..I'm taking this because???....) =============================== On some brands of Christmas lights of Eastern origin: "For indoor or outdoor use only." (As opposed to what?) ==========================
"Not to be used for the other use." (Now, somebody out there, please help me on this. I'm a bit curious.) ============================== Instructions on a SA Airways packet of peanuts - [1] Open packet; [2] Eat nuts. (Step 3: say what?) ===========================
"Wearing of this garment does not enable you to fly." (Don't blame the company. I blame the parents for this one.) ========================
"Do not attempt to stop chain with your hands or genitals." (Was there a lot of this happening somewhere?) ===========================  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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