Friday Offcuts – 11 November 2022

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This week New Zealand’s 7th annual WoodWorks 2022 mass timber conference, exhibitions and Red Stag CLT site visits were run. Again, there was an excellent turnout with around 300 senior managers and leaders from across the mass timber design and construction sector attending. Architects, project managers, designers, quantity surveyors, BIM specialists, engineers and wood producers from across the country came into Rotorua to network and to learn from recent case studies, technology developments, including LVL, CLT and prefabrication and connection systems transforming commercial and multi-residential construction. Presentations given over the two days will be sent out shortly to event delegates.

From next week, record numbers of forest resource managers, inventory foresters, establishment, silvicultural and tree crop managers from across the region will also be meeting up for the annual forest technology event, ForestTECH 2022. The series, for the first time in three years, is being run in both New Zealand and Australia. Over 300 delegates have already registered (along with virtual registrations from outside Australasia). The first in the series runs in Rotorua next week and for the Australian industry, the following week in Melbourne on the 22-23 November. You can still register and virtual or remote registrations are still available for the NZ event and on-site registrations can be made for Melbourne here.

Electric, hydrogen and hybrid fuelled vehicles, trucks and more recently, log transport fleets are being converted (Note: regular updates are now being supplied to forestry and log transport operators via the new Wood transport.events website). Conversions are already well underway – and in this part of the world. We’re ramping up coverage of this trend as it’s going to dramatically change efficiencies through our own wood supply chains. As well as the raft of technology advancements, the pace of change is probably taking many of us by surprise. Just last week, the Volvo Group announced that they’re investing 75 million euro to develop their own battery module production at one of their truck manufacturing plants in Belgium. In the second half of 2023 the plant’s also going to be producing battery electric heavy-duty trucks.

As we’ve reported, the Volvo Group’s ambition is that at least 35% of the vehicles sold worldwide are going to be electric by 2030. The drive to electric also ramped up last week when they shocked the Australian motoring industry in Australia. Volvo announced that they planned to stop selling petrol vehicles in Australia by 2026. A top executive says that the older technology is a “shrinking business” and they can’t see a long-term future for vehicles with an internal combustion engine. Volvo’s Australian deadline comes four years before its worldwide target to transition to electric vehicles, and comes just one week after it launched its first electric car in Australia.

Finally today, “caution and concern” are two words being used around the future outlook for lumber markets from a recent softwood lumber conference held in Copenhagen. Europeans at the moment are struggling with exceedingly high log and energy costs with some sawmillers expecting losses – and increasing losses – for the rest of fourth quarter as well as first quarter in 2023. Soaring energy costs, rising inflation and interest rates caused by the Russia-Ukraine war are creating difficult conditions for consumers and producers alike. Aligned with increasing energy prices, demand for wood for heating has also been soaring. Already used by some 40 million people for heating, it’s quickly become a sought-after commodity and pellet prices in some countries have already doubled. As winter in the northern hemisphere starts to bite, the unfolding situation in Europe is covered in several stories this week. And that’s it for this week.

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State forests delivering higher net social benefits

The state body for the forest and timber industry in Queensland has welcomed a landmark study into the long-term benefits from state forests in South and Central Queensland as compared to if they were managed as national parks[1]. Timber Queensland Chief Executive Officer Mick Stephens said “The study conducted by Indufor and Natural Capital Economics is a best practice approach to comparing management outcomes in state forests and national parks using cost-benefit analysis.”

“By taking into account the broad range of goods and services provided from state forests in the region, it was found that they deliver higher net social benefits over the range of discount rates and time periods evaluated. The median net benefit from state forest management was equal to an extra AU$1.2 billion in social benefits over the next 100 years, or 30 per cent higher than if they were national park.”

“The result is significant and demonstrates the enormous value from the multiple-use management of state forests. These forests deliver a broad range of social outcomes, including the provision of biodiversity, recreation, timber production and lower emissions through the carbon captured in forests and in harvested wood products,” Mr Stephens said.

“Selective harvesting of timber is also undertaken in accordance with the Queensland Parks and Wildlife code of forest practice, which provides state revenue to help offset management costs and pay for fire prevention, recreation assets and biodiversity protection.”

“Public forest decision making in Australia is often cast in a narrow land use paradigm that the only way to look after native forest and biodiversity is to lock it up in formal reserves. This is an outdated approach which fails to recognise the benefits from actively managing forests for multiple outcomes and ecosystem services, which this study shows,” said Mr Stephens.

“The study also identified the importance of engagement with First Nation peoples on the management of public native forests and recognition of indigenous cultural values.” The cost-benefit study was commissioned by the South & Central Queensland Regional Forestry Hub with funding from the Australian Government, Department of Agriculture, Fisheries and Forestry.

The report can be found here.

1 The study adopted an ecosystems approach, by incorporating regulating services such as biodiversity conservation and carbon sequestration, provisioning services such as timber and honey production and cultural services such as recreation and tourism.

Source: Timber Queensland

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November 2022 NZ log market update

Opinion piece: Inflation is front and centre of everyone’s minds at present and is more than likely causing Grant Robertson many sleepless nights. One of his biggest worries (and he’s got plenty) will be whether Adrian Orr brings out the big guns in the next OCR round and gives us all a 75-basis point punch in the face. Then there’s talk amongst economists about hyperinflation, which we want about as much as a dose of the pox.

But don’t worry folks, in the forest industry we’re doing our best to keep inflation at a minimum as our export log prices take another hit to see them just under the three-year average with A-grade At Wharf Gate (AWG) prices around $123/m3 for November, down $8/m3 from October.

The general feeling was that following the Chinese Communist Party ‘elections’, there would be an easing of covid restrictions and some form of stimulus announcement to get the economy back up and running, resulting in an increase in log demand and hence price. However, now that Xi Jinping has secured his place by being ‘elected’ back into power it seems to be becoming clear that he has been drinking some of the Russian and North Korean Kool-Aid with a clear direction to de-westernize the country and tighten the socialist grip in a Mao type regime.

His control of the CCP was highlighted by the very public ejection of the former President from the CCP Congress closing ceremony citing that the poor chap wasn’t feeling well – must have been a dodgy dumpling. If, in fact, Xi Jinping is travelling down the full-on socialism route, it doesn’t bode well for international trade long term.

Current Chinese in-market inventory is in the mid to high 3M m3 range and is likely to climb somewhat in the run up to Christmas as NZ supply increases seasonally. This level is at the lower end of where we have been operating at over the past few years but not at the point where price increases are stimulated.

Chinese demand is currently running at 70% of 2019 levels as the market battles with exceptionally low construction sector confidence and comical covid elimination measures. In-market (CFR) sales prices have dropped into the early $US120’s/m3 as many of the finance companies that supply funding for log importers impose caps on log purchase prices that they will finance.

Shipping rates continue to fall rapidly with many fixtures in the $US30’s/m3 which is close to half of where they were 12 months ago. The $NZ:US bottomed a few weeks ago and is now heading north again with an increase of $0.04 since October. While the dollar strengthening is helping importers and fuel costs, it does adversely affect log prices with every cent increase translating into a $NZ3/m3 export log price reduction ($NZ12/m3 since October).

Reading the tea leaves, it’s unlikely we will see much in the way of price increases until well into the new year. We will need a reduction in inventory which will only be achievable through reduced supply. This will happen early in 2023 as NZ supply takes a few months to react to price reductions. Chinese New Year (CNY) holidays are early in 2023 and therefore the NZ Christmas supply reduction will likely coincide with less deliveries over the CNY period.

Marcus Musson, Director, Forest 360

Click here to view the full report.

Source: Forest360

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Volvo to produce battery modules at truck plant

Volvo Group is investing 75 million euro (NZ$126m) to develop battery module production at its truck plant in Ghent, Belgium. It expects to be in production by 2025 and will strengthen the manufacturer’s battery system supply chain which currently relies on partners for the supply of cells and modules.

The battery module manufacturing line in Ghent will be able to use battery cells both from partners and from the planned battery cell plant in Sweden. The building is expected to be 12,000 square metres and be located at the Volvo Group manufacturing site. It will consist of an almost fully automated process with robots, the company says.

“This means that employees with the necessary competences will be recruited, both externally and by building on our internal competences,” says Jens Holtinger, executive vice president of the group’s trucks operations.

The Volvo Group truck assembly plant in Gothenburg, Sweden, is already building heavy-duty electric trucks as the first global manufacturer in the world.

In the second half of 2023 the plant in Ghent will also start to produce battery electric heavy-duty trucks. The battery packs needed to power these electric trucks are built in the Ghent plant. Volvo Group’s ambition is that at least 35% of the vehicles sold worldwide will be electric by 2030.

Source: transporttalk



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Australian timber research centre continues vital work

WoodChat Episode 26 places spotlight on National Centre for Timber Durability and Design Life

A hugely positive mid-term review of the FWPA-supported National Centre for Timber Durability and Design Life has resulted in the extension of the Centre’s important research activities for a further five years, with the potential for three more. The latest episode of FWPA’s WoodChat podcast series talks about the evolution of the Centre since commencing in 2017, its work to place Australia at the forefront of international best practice, and efforts to underpin consumer confidence in timber products.

The extension of the Centre is reflective of its many achievements with the review panel concluding the Centre had successfully completed its establishment phase including the development of a coherent research program, staff employment, and initiation of significant projects. Based at the University of the Sunshine Coast the Centre team has overseen research focused on everything from treated wood quality to fire impact, timber field performance, termite biology, moisture behaviour, coatings performance and more.

“The first few years were all about working with research and industry partners to identify their strengths and consider how we can best cross collaborate,” said interviewee Professor Jeff Morrell, Director of the Centre for Timber Durability and Design Life. “One area of outstanding success has been the engagement of students and post-graduates, and the education of the next generation of researchers in this field”.

“An important focus of the next cycle will be on effective engagement with industry to ensure they see and appreciate the value of what we’re doing, and to help us understand their issues so our research is as relevant as possible,” said Morrell.

During the episode Professor Morrell also discusses a planned focus on the circular economy, with efforts to develop strategies for the reuse of waste materials to add value and reduce costs.In addition, listeners will hear from fire science expert Dr Felix Wiesner of the University of Queensland about his research collaboration with the Centre to develop insights around smoldering and timber durability in bushfire-prone areas.

Other interviewees are research scientists Dr Maryam Shirmohammadi and Lesley Francis from the Department of Agriculture and Fisheries, who discuss Centre-supported work involving field trials to improve the service-life prediction models of timber materials used for outdoor applications.

You can listen to WoodChat on Soundcloud, iTunes and Spotify.

Source: FWPA

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Forico wins climate change and sustainability accolades

Forico has won major accolades in the ‘Finance for the Future Awards’ – a partnership between Deloitte, Accounting for Sustainability (A4S) and the Institute of Chartered Accountants England and Wales (ICAEW).

Forico won the award for ‘Embedding an Integrated Approach’, at the awards finals on 9th October in London. The category recognises organisations which have integrated sustainability into their financial decision making. Underscoring the importance of finance in combating climate change, and the scale of the challenge faced in responding, the judges presented additional Climate Leadership Awards to nine nominees, including Forico.

About the Awards

The Finance for the Future Awards recognise businesses, organisations and people that have demonstrated leadership which encourages sustainable practices. Established in 2012, the awards’ goal is to inspire, inform and influence people in the finance sector to embed sustainability in decision-making and business practice.

Entrants in the category had to demonstrate:
- that sustainability is at the core of the business’ activities;
- that the business delivers tangible environmental and/or social benefits in addition to delivering value
for money within prudently managed budgets, spending less, spending well and spending wisely;
- that the involvement of the finance team is critical in delivering on the above goals.

Veronica Poole, Vice Chair of Deloitte UK said of the awards, ‘The past year has seen a devastating string of extreme weather events, showing clearly that we are already living in a climate crisis. So, if we are to turn back the tide of climate devastation and unlock a resilient, sustainable, clean energy economy to preserve our planet, we need to act now. Today we celebrate organisations that are showing climate leadership, innovation, commitment and progress. They provide an inspiration and a learning opportunity for us all.’

Forico and Natural Capital Reporting

Forico has been widely recognised as having set a benchmark for business and industry in environmental stewardship and corporate sustainability reporting, releasing its world-leading Natural Capital Reports in 2020 and 2021, a first in Australia.

Chief Financial Officer Rayne van den Berg said of the win, ‘This was such an exceptional cohort of fellow finalists and winners, and we are very excited at being recognised in this international forum for our profession. This is testimony to the passion we all share at Forico to be part of the solution towards a truly sustainable and nature positive future.’

Photo: Forico’s Chief Financial Officer Rayne van den Berg accepts the award via internet link

Source: Forico

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SnapSTAT - Carbon Sequestration



Default Yield Tables of CO2 Storage for Radiata and Other Tree Species




Source: FOA Facts & Figures 2020/21

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Two-year fire trial hailed a success

Tasmania is set to continue to benefit from the rollout of new fire detection technology which will help reduce the spread of major bushfires, safeguarding valuable plantation assets and even local communities.

After a successful two year trial, leading Tasmanian plantation management company SFM have partnered with Working On Fire, a global business that delivers integrated fire management services to install new cameras in southern Tasmania. The cameras will cover the SFM managed 18,500Ha Lenah Estate in the Derwent Valley and protect approximately AU$100 million on forest assets.

The camera system, aptly named, Forest Watch, is AI and machine learning technology that uses smoke detection cameras across 360-degree views, capturing and comparing images every 90 seconds to detect smoke and fire in dense plantation areas. SFM Managing Director Andrew Morgan said “with a combination of a helicopter on standby and the camera system we were able to have water being deployed at a detected ignition site in just over 20 minutes”.

“During the trials, small fires, the size of haybales, were detected up to 25km from the camera sites across private and public land. On a bad fire weather day every minute counts to contain a fire event to not only minimise the economic impact to the valuable plantation resource but also biodiversity and communities”.

With a detection accuracy of up to 99.8 per cent, Forest Watch monitors day and night and the fire detection information will be shared with fire-fighting agencies to better inform and protect communities, national parks and other forestry reserves. Working On Fire’s Mark Zoethout said as Australia continued to experience unprecedented events such as catastrophic bushfires & floods, technology that could help mitigate such challenges was needed.

“These cameras, supported by Artificial Intelligence, allow private industry, state & territory, and federal governments to deliver a 360-event mitigation promise,” he said. “After the recent concurrent fires and floods, people are looking for assurance in their lives that properties & businesses are being protected - not just seasonally, but every day and every night.”

Climate Impacts Group, CSIRO Atmospheric Research and the Australian Government Bureau of Meteorology estimated that by 2050 the frequency of extreme fire danger would increase by 15-70% across south-east Australia.

Source: SFM

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Women in forestry supported on leadership journey

The Tasmanian Forests and Forest Products Network (TFFPN) with the support of the Tasmanian Government has provided eight fully funded scholarships for women in forestry to participate in the latest offering from Tasmanian Leaders. The I-LEAD Women in Industry Program has been created to exclusively support and accelerate the leadership journey of rising and established women leaders in Tasmania. Through the program a cohort of 37 women from across traditionally male-dominated sectors—including mining, fisheries, manufacturing, electricity and water—will have an opportunity to connect and advance gender equality together.

Scholarship recipient, Tammy Price, said the program would allow her to gain confidence and cement leadership skills that she has acquired over the years. “I think when people meet me, they find I am quite friendly and talk a lot, but in reality—behind the smile—there is always a lot of self-doubt, and that is something that I really would like to overcome,” Ms Price said. “I always have a lot of balls in the air, juggling work and family – and it takes a lot of co-ordination, discipline and energy.”

Ms Price, who began working in the forest industry assisting with administration for her family’s business when she was 14, said that pursuing a career in the sector was a natural progression, and one that she’s never regretted. “I worked with Timber Communities Australia (Tasmania) for a few years, before commencing employment in the Public Affairs department at North Forest Products. I then moved into Business Development and Sales – and moved across to Gunns Limited working in community relations before moving into operations as a plantation forester overseeing 20,000ha of plantation establishment in the south and managing the financial processing for the team.

“I left industry for a short period and returned as the Finance Manager for SFM Environmental Solutions around 10 years ago.” Despite a long history working in the Tasmanian forest industry, Ms Price has been reluctant to put herself forward for scholarship opportunities. “I’ve always just worked behind the scenes, encouraging everyone else to apply, however when the I-LEAD program was advertised I took a real interest in it,” Ms Price said.

I-LEAD participants will have the benefit of expert facilitators and prominent sector professionals sharing invaluable learnings for their career success across the key areas of personal, strategic and business leadership. The women will be given the opportunity to build networks within the forest industry and within the broader workforce through the relationships that will be formed during the program.

TFFPN Convenor, Therese Taylor, said the eight women, through their participation in I-LEAD, are demonstrating their commitment to providing leadership within our forest industry. “Building and supporting this leadership capability is key to the development and implementation of initiatives under both the Network’s Forest Industry Workforce Development Plan and the Diversity Action Plan,” Ms Taylor said.

“The diversity in the forest industry’s business size, type and capacity to implement workforce development and diversity initiatives promotes leadership from within the sector to drive the organisational change that is critical for success. The Network is thrilled to be able to support eight highly-motivated women working in our sector to advance their leadership skills,” she said.

Ms Price, who is a fourth-generation forest industry worker – and whose daughter now works in the sector, believes ‘forestry is family’. “There is no industry quite like forestry. The people are warm and friendly— and always willing to help. I’d encourage women to seriously consider working in this area,” she said.

The women who received full scholarships were Bronnie Grieve and Tammy Price from SFM Environmental Solutions; Gemma Poke from Tasmanian Wood Co, Janet Li from Timberlands Pacific, Kathryn Cresswell from Forico, Kristen Dransfield and Linda Crawford from Sustainable Timber Tasmania and Melanie Conomikes from Hobart City Council.

Photo: Front row L-R: Bronnie Grieve, Angela Driver, Melanie Conomikes, Tracey Taylor (TFFPN). Back row L-R: Gemma Poke, Kathryn Cresswell, Linda Crawford, Janet Li, Tammy Price, Kristen Dransfield.

The photo includes the participants and Angela Driver, CEO of Tasmanian Leaders and Tracey Taylor from TFFPN along with the forest industry I-LEAD participants.


For more information on workforce development and diversity initiatives go to www.tffpn.com.au

Source: TFFPN, AFCA



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Dunedin: FREE site visit to mass timber building project

NZ architects, designers, construction professionals and wood producers are invited to a free seminar and site visit to Otago Polytechnic in North Dunedin on Monday, 14 November to see how engineered wood has delivered several key advantages to the project and building. Follow up seminars and site visits have also been set up for Christchurch on 15th and Nelson on the 16th November.

The focus of the Dunedin site visit is the partially-completed Trades Training Centre on the campus, designed by Warren and Mahoney and with Logic Group a proud to partner with Otago Polytechnic to deliver their new Trades Training Centre on their Forth Street Campus in North Dunedin. The proposed building is comprised of three levels with a double height atrium and has a floor area of 3,600m2.

For more information on the project click here

Design funding for the building is provided by Midrise Wood Construction a partnership programme between the Ministry for Primary Industries (MPI) and Red Stag Investments Ltd. The programme aims to accelerate and increase the use of mass timber and prefabrication in a range of public and commercial building types.

Click here to register for the free sites visits and seminars.



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Europe’s energy crisis: the wood squeeze

As much as 70 percent of European heating comes from natural gas and electricity, and with Russian deliveries drastically reduced, wood — already used by some 40 million people for heating — has become a sought-after commodity. Prices for wood pellets nearly doubled to 600 euros a ton in France, and there are signs of panic buying.

Hungary has banned exports of pellets, and Romania capped firewood prices for six months. Wood stoves that are high in demand can take months to deliver. In France, there are signs of hoarding as some buyers have bought two tons of wood pellets, when less than one ton is normally enough to heat a home for a year. Since the crisis began, Germany has increased its coal-generated electricity by almost 5 percent. Coal currently accounts for nearly a third of all electricity generated in Germany.

A poll taken this summer found that 56 percent of Germans were in favour of turning coal plants back on, with just 36 percent against, which compares to 73 percent of the population that supported ending coal use “as soon as possible” in a 2019 poll. As a reminder, many of Germany’s woes stem from the decision, taken under the wise guidance of Angela Merkel (the “indispensable European,” etc.), to move its energy policy in an allegedly climate-friendly direction — its Energiewende — with massive investment in renewables and ever-deepening dependence on natural gas — a less greenhouse-gas-intensive fuel — supplied by that dependable Mr. Putin.

For unrelated but supposedly green reasons, the country also reaccelerated the phase-out of its nuclear-power stations, a program that had reached its final stages this year (although two of its last three power stations are now to be kept on standby).

Meanwhile, Qatar’s energy minister warns (and this should not be news) that getting through the winter of 2022/23 will not be the end of Europe’s problems. Qatar’s energy minister has warned that while Europe should have sufficient gas for power and heating this winter, the tougher challenge will come in 2023 as reserves are depleted. Saad al-Kaabi said it would be “much worse next year” if there was a harsh winter, adding that the energy crisis could extend to the middle of the decade if President Vladimir Putin’s war in Ukraine continued and gas “does not start flowing back again” from Russia.

More >>

For further coverage on the issue click here

Source: nationalreview



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Promotion of climate smart farming with forestry

A delegation of farming and forestry leaders has departed Australia for COP27 in Egypt, with the mission to demonstrate how climate smart farming and forestry can help Australia bring down its emissions and fight climate change, while boosting much needed food, fibre and timber production.

The delegation includes National Farmers Federation (NFF) and Australian Forest Products Association (AFPA) representatives, as well as Victorian red meat and timber farmer Mark Wootton and representatives from the Macdoch Foundation and Sea Forest.

NFF President Fiona Simson said, “Our goal is that farming and forestry are better recognised in national and global policy as solutions to help Australia reach its climate targets and help the world fight climate change. We will be on the ground to turn the dial on policy.

“Australian farmers have a remarkable track record of adopting new practices to drive down emissions, and we have ambitious targets to go further. We need to ensure our efforts are recognised by policymakers globally, who should be looking to Australia as an exemplar for climate-smart farming,” Fiona Simson said.

The delegation has organised and is involved with a number of events to demonstrate how sustainable farming and farm forestry in particular can deliver in the global fight. AFPA Chair Diana Gibbs said, “Much of the world has already turned to growing trees to mitigate carbon emissions, but with national and global timber and wood fibre demand booming and supplies stretched, we need to encourage a greater take-up of planting production trees specifically to supply sustainable timber and wood fibre for the future.

“One way to do that is encourage farmers and landholders to dedicate more of their properties to tree production, where they can realise tree created benefits for other agricultural enterprises, like red meat production. Trees can also help farming operations achieve carbon neutrality. At COP we will aim to join these dots and advocate to Australian policymakers and to other global players.”

The delegation will be on the ground at COP27 in Egypt for the next week.

Source: AFPA

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R&D solution to tackle plastic waste for nurseries

Scion scientists have been instrumental in developing and testing biodegradable nursery pots that will help nurseries and Kiwi gardeners to reduce plastic waste and its impact on the environment. The biodegradable pots, made from biopolymers and a biofiller, will offer an alternative to the estimated 350 million plants in pots produced by New Zealand nurseries each year.

Manufacturing of the pots will scale up after production processes are finetuned using funding received from the Government’s Plastics Innovation Fund announced recently by Environment Minister David Parker. The pots are expected to be commercially available by September 2023.

The successful prototype, PolBionix, has been four years in development at Scion as part of a project with commercial client Wilson and Ross Limited. Director Peter Wilson engaged the services of Scion’s expert biomaterials and biodegradable testing team to develop and test a formulation for a product that meets the requirements of a nursery, last at least 12 months above ground then, after its planted in soil, continues to biodegrade. The pot then provides fertiliser for the plant as it breaks down, supporting plant growth.

Polymer technologist Maxime Barbier developed various formulations in the project’s discovery phase, with product testing carried out in small batches. Early results were mixed, however, the team eventually developed a prototype that showed promising biodegradation properties in 2020.

Scion’s scientific discovery during the testing phase has resulted in the filing of two international patents. Wilson is excited about the opportunities ahead for the product and its widespread adoption by nurseries, both for home gardeners and planners of large-scale infrastructure and environmental restoration projects, especially near waterways.

More >>



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Softwood lumber in 2022 and 2023 outlook

Eroding Markets Point to Sawmill Curtailments in Europe. (First published in: Spar Tree Group’s October newsletter, View from the Stump)

The mood at the 70th International Softwood Conference (ISC) held this year in Copenhagen was one of caution and concern. With global markets cooling off and many producing countries in Europe struggling with exceedingly high log and energy costs, some sawmillers expect losses – and increasing losses – for the rest of fourth quarter as well as first quarter in 2023.

With too much production already evident in the market, European mills are not yet slowing down enough despite all the red flags of shrinking demand already evident. This means that more European sawmill curtailments will occur in the short-term.

Russ Taylor has been a regular attendee to the ISC since its move to an international event starting in 2006 and he is normally the only representative from Western Canada (aside from Don Kayne, CEO, Canfor, who presents each year by ZOOM with some in-person presentations).

Europe is seeing the highest interest rates in 30 years, and for the US, it is 40 years. The so-called “yield curve” is now running negative and increasing – always a sign of a pending recession. Most economists are now forecasting a global recession in 2023 with Europe starting earlier with the potential of a hard landing.

Soaring energy costs, rising inflation and interest rates caused by the Russia-Ukraine war are creating difficult conditions for consumers and producers. While high interest rates and inflation are all over the world, it is anticipated that the US recession could result more in a soft landing. However, the US Federal Reserve is expected to further raise interest rates and that could prolong the time before any economic recovery.

Softwood lumber consumption in European ISC countries was a healthy 82.9 million m3 in 2021 and is estimated to ease to 78.9 million m3 in 2022. The official forecast for 2023 is for a small reduction to 77.5 million m3, but this outlook seems overly optimistic when speaking with many of the 200 delegates. With the expectation of rising unemployment, high interest rates, high energy costs and so much uncertainty with geo-politics, the outlook for 2023 is not looking good at all for European sawmills.

European sawmills have been facing soaring delivered log costs due to the surging prices for fire and pulp logs – up to €95/m3 (~US$95/m3) – which had pushed sawlog prices in some countries to €150/m3 (~US$150/m3). With lumber prices now falling, sawmills in some countries are being squeezed into negative sawmilling margins. Fortunately, fire and pulp wood prices have peaked and should ease, so that may provide some much-needed relief on sawlog prices in fourth quarter.

In the short term, however, lumber consumption and consumer confidence are falling, and consumers’ disposable income is being redirected towards paying higher energy, food and, in more and more cases, mortgage payments. This makes business in Europe very unpredictable going forward. European lumber production in the ISC member countries is likely to drop from 97.2 million m3 achieved in 2021 to an estimated 94.7 million m3 in 2022 and a forecasted 93.5 million m3 for 2023 (although this seems very bullish given the tone of the conference).

European lumber producers are also facing a potential nightmare scenario from the proposed EU Deforestation Regulation. Once it has come into effect in the next 1-2 years, all business activities must be “deforestation-free” – which requires extensive documentation. If implemented, it could seriously restrict the harvesting of some forests, reducing the log supply in various countries in Europe.

More >>

Source: russtaylorglobal



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Jobs



Buy and Sell



... and one to end the week on ... the phone call

Husband's call:

"Honey it's me. I don't want to alarm you but I was hit by a car as I was leaving the office. Paula brought me to the hospital. They have checked me over and done some tests and some x-rays.

The blow to my head was severe. Fortunately it did not cause any serious internal injury. However I have three broken ribs, a compound fracture in the left leg, and they they may have to amputate my right foot if it doesn't heal quickly."

However, the doctors feel the foot can be treated and I will be OK, but they just need to monitor the foot for a few days. I'm in room 406 at Baptist East.

Wife's Response: "Who is Paula?"






On that note, enjoy your weekend. Cheers.

Brent Apthorp
Editor, Friday Offcuts
PO Box 904, Dunedin 9054, New Zealand
Tel: +64 3 470 1902
Mob: +64 21 227 5177

Web: www.fridayoffcuts.com

John Stulen
Editor, WoodWorks.news (coming in Jan'23)
PO Box 1230, Rotorua, 3040
Tel: +64 7 921 1381
Mob: +64 27 275 8011
Web: woodworks.events

This week's extended issue, along with back issues, can be viewed at www.fridayoffcuts.com

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