Friday Offcuts 16 December 2016
As many plan on soaking up a bit of sun over the holiday period, a number of our readers will be on fire duty over the Christmas period. A new report out suggests that New South Wales and the Australian Capital Territory in particular are bracing themselves for yet another severe bushfire season. Fire seasons in both States are beginning earlier and lasting longer. Forecasts for hotter and drier than average conditions are predicted for this summer. Together with high levels of grass growth during spring through record rainfalls in September, it’s all adding up to increased fire danger in both NSW and the ACT.
For the Kiwis, the outlook is more mixed. Some regions like the top of the North Island are already showing signs of distress. Fire restrictions came into force this week as summer gets off to a dry start with scrub fires breaking out daily. Fire crews and helicopters were involved on Wednesday afternoon in battling a large forest fire in Matakana, north of Auckland. To improve early bushfire detection and monitoring, NRMA Insurance in Australia has recently been working on a prototype designed to sense, locate and track bushfire smoke. You can check out the video below which explains the project in more detail. For those on call and involved, look after yourself over the summer break.
In one of our lead stories this week we cover the rise of digital media. As we well know, print media increasingly has been losing market share to digital. Newspapers and industry magazines have been getting thinner, many have closed and the job ad placements that used to drive the revenue streams of newspapers has been drying up. It was only 10 years ago, that internet advertising started to gain traction in the job ads market.
Apparently though, it’s game over for newspaper advertising. In NZ in September, on-line advertising accounted for a massive 95% of all jobs advertised. Check out the graph below. The organization that measures these job advertising numbers has now stopped reporting newspaper ads as they’ve become such a small proportion of the market. We’ve seen this of course with on-line advertising through this newsletter, it being such a key component for many years now for recruitment by forestry and wood products companies in this region. So, it’s official, as we head into 2017, newspaper job or recruitment advertising is now “dead”.
As we start to clean up the office to head off on our summer vacation, remember that for two of the tech events planned for early next year, the Forest Industry Safety Summit and MobileTECH 2017, special discounted rates for both events FINISH next Tuesday, 20 December. So, if you’re planning to register yourself and your staff and want to take advantage of the great deals for early registrations, best get onto it before you head out the door.
Finally, to finish the year on an upbeat note, we’ve included a story this week titled “Is timber the next “disruptor”?” As we've reported during the year, huge inroads have been made this year in Australia. Changes to the National Construction Code have been successful in getting timber into the minds of architects, project managers, specifiers and consumers across the country. The question being posed now is whether timber is a new disruptive force that’s poised to reshape the way we build? Will it be a disruptor to rival Uber and the iPhone? 2017 with progress this year and projected building starts is shaping up to be a very good year for timber. On that upbeat note, enjoy your break. We’ll catch up with you again in mid-January.
This week we have for you:
Is timber the next “disruptor”?When we hear the word “disruption,” we tend to think of Apple’s iPhone destroying Kodak’s business model, Uber taking on the taxi industry or AirBnB reinventing the hotel game. But disruption is not just about technological change.
In fact, as the twin drivers of climate change and economic imperatives encourage our industry to look for resource efficiencies, timber – one of our most ancient materials – is a new disruptive force that is poised to reshape the way we build.
No other material can help us meet the challenges of contemporary, sustainable construction nearly as well. Timber has always been around as a building material, but this has been largely restricted to the residential sector. Large-scale commercial development in timber is new.
Lendlease has been an early adopter of timber high-rise construction. When complete, the six-storey International House at Barangaroo South in Sydney will be the tallest timber office building in the world. Made from cross-laminated timber (CLT) and Glulam (glue laminated timber), the building has been designed to meet Barangaroo South’s carbon neutral ambitions. Lendlease’s managing director of Barangaroo South, Andrew Wilson, has said the “source of materials is important. To use at scale, timber is the only renewable resource.”
On May 1, 2016, Australia’s National Construction Code introduced a new ‘deemed-to-satisfy’ provision for timber buildings up to 25 metres, or eight storeys high, provided they include a raft of requirements, such as fire sprinklers and fire-resistant cladding.
This may spark innovative and entrepreneurial builders, many of them in smaller companies, to look at medium-rise timber apartments in our middle-ring suburbs – and at prices that the average Australian can afford. Changes to the code will accelerate the use of prefabrication and modular construction – a method that delivers a range of benefits.
Timber can be grown, manufactured and cut to size close to site, making for quicker and more cost-effective construction. Economic modelling undertaken by Forest and Wood Products Australia (FWPA) has found the shorter construction times required for wooden buildings can save up to 15 per cent on a project’s overall costs. FWPA also estimates that the new code will provide a $103 million boost to the Australian economy over 10 years through environmental benefits, and reduced construction and compliance costs.
Timber is around 30 per cent lighter than concrete or steel, potentially cutting crane, scaffolding and foundation costs. Timber and engineered wood also offer advantages in terms of thermal and energy efficiency performance. When combined with the precision delivered offsite on the factory floor, timber construction can enhance the quality of a build.
Research from Planet Ark has found that wooden interiors can also improve occupants’ emotional state, reducing blood pressure, heart rate and stress levels. And of course, timber’s carbon storage potential is impressive. Australia’s native forests, timber plantations and wood products are net absorbers of greenhouse gases, sequestering an estimated 56.6 million tonnes of carbon dioxide a year, and reducing our greenhouse gas emissions profile by almost 10 per cent.
Our challenge is now to rethink conventional building. The current climate demands a move away from business-as-usual thinking. Timber may help us kick-start a whole new building movement.
FWPA has invested significant time into demonstrating that timber satisfies all safety standards while delivering environmental efficiencies. This work is beginning to pay off, but the next step is to ensure we use locally-sourced materials and have the prefabrication plants to deliver product to market.
The Green Building Council of Australia’s proposed updates to Green Star, which will recognise and reward engineered timber in the Materials category, is a good start and will help incentivise the use of regionally-sourced and manufactured engineered timber.
Will it be a disruptor to rival Uber and the iPhone? Only time will tell.
Anxious states await extreme bushfire seasonNew South Wales and the Australian Capital Territory are bracing for another severe bushfire season, as climate change continues to drive extreme conditions, a new report says. The report by the Climate Council finds the economic cost of bushfires in the NSW and ACT is about AU$100m this year, with annual bushfire costs projected to more than double by 2050.
Climate Councillor and ecologist Professor Lesley Hughes said fire seasons in NSW and the ACT were beginning earlier and lasting longer, with the bushfire season now extending into spring and autumn. “NSW in particular has already experienced dangerous bushfires this fire season as a result of hot weather and dry conditions,” she said.
“With forecasts for hotter and drier than average conditions predicted this summer, along with high levels of grass growth during spring from record rainfall in September, we can expect to see increased fire danger in both NSW and the ACT.
“This is all occurring within the context of a changing climate. The concept of a ‘normal’ bushfire season is rapidly changing as fires continue to increase in number, burn for longer and affect larger areas of land than ever before.”
The report also found:
- Extreme fire weather and the length of the fire season has increased in NSW and the ACT since the 1970s.
- NSW and the ACT are very likely to experience an increase in the number of extreme fire danger days as a result of climate change.
- The annual economic cost of NSW and ACT bushfires in 2016 is approximately AU$100 million, but is expected to more than double by 2050.
- Communities, health services and emergency services must prepare for worsening bushfire conditions.
- As climate change continues to worsen bushfire conditions, firefighting services will be less able to rely on help from interstate and across the world as fires occur simultaneously.
“As bushfire conditions continue to worsen due to climate change, we will be less able to rely on help from interstate and across the world as fires occur simultaneously. For example, in NSW in August 2014, volunteer firefighters were fighting 90 fires at the same time,” Hughes said. “Preparing communities, emergency services and the health sector, is an absolute priority to protect residents in NSW and the ACT from worsening fire danger conditions.”
Source: Carbon News
Australasian tech events being planned for 2017Again, after an incredibly busy year, the Forest Industry Engineering Association (FIEA) has in conjunction with a wide cross section of industry on both sides of the Tasman, developed an Events Planner for next year. With again very high turnouts at all FIEA technology events that have been run this year, we’re really excited with what 2017 holds.
The Events Planner will enable; forestry and wood products companies to pencil the dates into your own calendar for next year and industry associations, research organisations and those involved in setting up your own programmes for 2017 to take note of the dates (and ideally look to dovetail in to the tech events timing and location to add value to the industry and those likely to attend).
For product and service suppliers, we hope this forward planning will also enable you to schedule your involvement and to budget early on in the year to the relevant tech event and for overseas suppliers, it will enable you to lock in a time to plan visits to your key customers or distributors in Australia and New Zealand and to link in to the relevant technology events in this part of the world next year.
FIEA technology events being planned for 2017 include;
1. Forest Industry Safety Summit 2017
People, Safety & Technology
1-2 March 2017, Rotorua, New Zealand
7-8 March 2017, Melbourne, Australia
2. HarvestTECH 2017
Steep Slope Logging – Mechanisation & Automation – Harvest Planning
20-21 June 2017
3. WoodTECH 2017
Wood Scanning – Sawing – Mill Optimisation
20-21 September, Melbourne, Australia
26-27 September, Rotorua, New Zealand
4. ForestTECH 2017
Data collection & Management – Remote Sensing – Mobile Communications & GIS
15-16 November 2016, Rotorua, New Zealand
21-22 November 2014, Melbourne, Australia
Other technology events being planned;
1. International Steep Slope Logging Conference
20 April 2017, Kelso, WA, USA
2. MobileTECH 2017
Primary Industries – Disruptive Innovations Reshaping the Sector
22-23 March, Rotorua, New Zealand
Mark the dates into your 2017 calendars. At this early stage, if interested in either presenting or exhibiting, let us know and if appropriate, we can look to build you into the planned programmes.
Attached for your information is a PDF of 2017 Technology Events which provides you with further information on the schedule of tech events planned for next year.
More companies adopt FOLS skills programmeSeveral Australian forestry contracting businesses have completed a move over to FOLS recently. The following businesses have officially signed on all of their operators to the skills verification program. This move follows the initiatives of HVP Plantations (HVP) and the Australian Forest Contractors Association (AFCA), who recently endorsed FOLS.
- Austimber Harvesting Gippsland
- Forestry Services Logging Pty Ltd
- Galzon Logging
- Retreev Pty Ltd
- Richards Harvesting & Haulage
All five companies undertake work for HVP Plantations, which this year endorsed FOLS as their preferred tool to manage operators’ high risk competencies.
John Dodson, HVP’s Human Resources General Manager, said a further 13 forestry contracting businesses are also well advanced in the process of moving their operators on to FOLS, which will see a total of 18 contracting businesses with over 140 operators moving over to FOLS in a six-month period.
“HVP has assisted contractors financially and by working one-on-one with them to bring their training and currency records on to FOLS. With FOLS, we now have a consistent and accessible tool for working with contractors on their training and workplace health and safety requirements,” said Dodson.
The first HVP contractor to complete their transition to FOLS was Austimber, which is also a member of AFCA. Ian Reid, Director of Austimber and former Chairman of the AFCA Board, said he is very pleased with the service FOLS has provided the business.
“In a world where systems and processes tend to be made more complicated it is pleasing to see a system become available that is easy and simple to use. It is such an effective system for managing the skills of employees and supporting safety in the workplace. A key benefit is how it has helped us to manage risk. Through FOLS we are able to quickly know who is trained and skilled to undertake particular activities,” said Reid.
FOLS is a national industry-led program, managed by ForestWorks. For more information about the FOLS Skills Verification Program, visit www.fols.forestworks.com.au.
Photo: Austimber Operator Michael Jordan with Stephen Wentworth from HVP.
AU$20 million transformation for Australian millPlans are underway to build a AU$20 million timber veneer plant at Kalangadoo. A Sydney-based company, Shield Formply, made the announcement on Monday following its recently lodged planning application to the Wattle Range Council. The proposed veneer plant will be located at the current mill site at Kalangadoo and will directly employ approximately 80 workers.
Shield Formply spokesperson Ms Susie Li said construction will begin in 2017 and involve installing log peeling equipment, a boiler and dryer. Once built, the plant will produce 100,000 cubic metres of veneer annually for export to make construction formply.
“We identified the South East as an opportunity to source a log supply grown in a sustainable manner allowing long-term investment in the region,” Ms Li said. “Locally grown blue-gum and pine will be peeled and dried for export to make formply for the construction industry.” Established in 2007, Shield Formply manufactures high standard formply for the Australian market and is the third largest formply supplier in Australia.
Source: Wattle Range Council
Emerging digital trends for the year aheadIf this year has taught us anything, it’s that digital technologies and hyper-connectivity are bringing user-led innovation to market faster than ever. Successful organisations today are those that best adapt and respond to unceasing change. Against this backdrop, Accenture has just released Fjord Trends 2017, its tenth and most provocative annual report examining the most significant emergent digital trends expected to disrupt organisations and society in the year ahead.
Three meta themes emerged, challenging long-held norms and assumptions. The rise of the autonomous vehicle, smart homes and digital assistants are creating new ecosystems that threaten the smartphone’s dominance as the main command centre of our lives.
“The year is about making us smarter humans and fostering human potential by creating helpful, meaningful services across an expanded array of digitised environments,” said Mark Curtis, chief client officer, Fjord. “Interfaces are becoming faster, smaller and automated, and organisations will need to adapt to the kind of supercharged, responsive and immersive environments now possible”.
Our tenth annual Trends report aims to provoke, inform and inspire but, above all, to provide actionable insights into designing for the rapidly evolving world of experience.” Read Fjord Trends 2017.
“We are witnessing an unprecedented era of innovation, placing the need for companies to rewire in order to succeed,” said Brian Whipple, head of Accenture Interactive. “Organisations across every sector are learning to harness digital to become more customer-centric. It is through this lens that organisations need to rethink their purpose and what they call a service in order to convert change into opportunities.”
Trends 2017 draws upon the collective thinking of Fjord’s 800+ designers and developers around the world based on first-hand observations, third-party research and client work. For the full report, visit trends.fjordnet.com/trends/
Exterior Cross Laminated Timber breakthroughNew Zealand exterior wood specialist Abodo has achieved another first – an exterior CLT panel made exclusively from thermally modified radiata pine. The CLT panel is made up of hundreds of 150x50 sections of Abodo’s Vulcan Cladding – a thermally modified radiata pine product, which is engineered with a consistent vertical grain for superior weathering. Vulcan is typically used for high performance cladding and exterior doors.
The CLT panel at 3.0m high, 2.5m wide and 150mm thick is being used for Abodo’s new showroom and factory sign, at 62 Ascot Rd, Mangere, Auckland. The panel itself was pressed and the Abodo logo CNC routered by Xlam in Nelson, and it has been protected with Sioo:x, a new generation weathering coating imported by Abodo from Sweden. Scioo:x will react with the thermally modified pine to create a toughened exterior which will silver off over time, in keeping with the factory and showroom building.
“We have built our new showroom sign from solid engineered thermally modified pine, as a testament to our belief in new generation wood technology – we will monitor the performance of the sign over time, with a view to commercialise exterior CLT for specific applications in the future” states Marketing Director and Founder, Daniel Gudsell.
New training service for Tasmanian forest industryTasmanian Minister for Resources, Guy Barnett has announced a new service to support the rebuilding and reskilling of the Tasmanian forest industry. Minister Barnett announced the new Training and Skills Development Service on Monday afternoon, at a launch event hosted by McKay Timber in Launceston.
The Training and Skills Development Service fund will assist Tasmanian forestry workers adjust to changing job requirements, brought about by advances in technology and new product development. ForestWorks will deliver the Training and Skills Development Service.
Diana Lloyd, General Manager of ForestWorks, said funding is available to current and new workers in the Tasmanian forest and timber industry. “Funding is available for training courses that will benefit industry, that are relevant to current and future job roles, and provided by a registered training organisation.”
Brett McKay, General Manager of McKay Timber, said the new training fund is a fantastic opportunity for all sectors of the Tasmania forest industry. “Training is fundamental to a safe, productive and innovative workplace, and something we value highly at McKay Timbers. This fund provides Tasmanian businesses with the financial support to upskill our workforce”.
“With this funding, we have the opportunity to identify any skills gaps, train staff in new activities for the future, and recognise the skills of our existing employees with formal qualifications,” said Brett.
The Tasmanian Training and Skills Development Service is funded by the Australian and Tasmanian Governments to support the rebuilding and reskilling of the Tasmanian forest and timber industry. For more information visit www.forestworks.com.au/tsds or contact ForestWorks on 03 6331 6077 or email@example.com
Reductions in Methyl Bromide research programmeSTIMBR members and stakeholders were recently briefed about progress in the STIMBR research programme which is seeking alternatives to methyl bromide and ways to manage methyl bromide emissions. Voluntary levies on methyl bromide and phosphine provide funding for research investment by STIMBR.
Four developments from the current research programme in New Zealand that have the potential to reduce and potentially eliminate the industry’s use of methyl bromide include:
Reduction of Methyl Bromide Rates. Work undertaken by Plant and Food Research (PFR) is showing that there is potential to reduce the rate of methyl bromide used to fumigate log being exported to China by up to 60%. If the proposed schedule is accepted by China 190 tonnes of methyl bromide per year will not be required resulting in a saving to log exporters of NZ$1.9M per year. The laboratory results must now be confirmed by treating logs seeded with the three species to provide MPI with data to support discussions with importing countries.
Joule Heating. The concept of applying electrical current directly to logs to raise the internal temperature of the logs to comply with the international standard accepted for the heat treatment of wood packaging materials – 56 degrees C for 30 minutes. In lab scale tests this has been achieved on full sized logs. No visible wood damage has been identified post testing at this stage. Extensive testing at Scion is now underway to confirm the visual assessments.
Researchers developing the joule heating technology at the University of Canterbury have developed a model that determines the amount of energy required to heat each log to the target temperature.
Initial indications are that electricity cost is of the order of $3.30 per m3 with a total treatment cost of $5.00 per m3. While this is more expensive than current fumigation a significant advantage is that it is adaptable to changing pests and market requirements. In the future, the costs of re-capture of methyl bromide following fumigation may change the comparative costs. STIMBR is in the process of commissioning engineering consultants to undertake the first of two feasibility studies to determine the costs required to construct a prototype unit.
A potential alternative fumigant – Ethanedinitrile (EDN). EDN is showing great potential as a soil fumigant in trials being conducted in a number of countries where soil fumigation is needed prior to planting crops. New Zealand has been chosen by Draslovka, the manufacturer of EDN, to undertake the development of efficacy data against Arhopalus ferus, Hylastes ater and Hylurgus ligniperda. Draslovka and STIMBA are jointly funding the research being undertaken by PFR with support from Scion.
EDN is manufactured in a unique process developed by Draslovka. EDN has a low boiling point (-20 degrees C compared to methyl bromide of 3.6 degrees C) and is much lighter than methyl bromide. This means that when released it disperses rapidly and will not “cloud” like methyl bromide. The EDN molecule penetrates into wood rapidly where it breaks down within the log to form its constituent elements carbon and nitrogen. Importantly EDN is not an Ozone depleting molecule nor it is a greenhouse gas. EDN breaks down when released into the atmosphere and does not bio-accumulate. EDN is registered for timber treatment in Australia.
A large field trial was conducted at Kinleith in April 2016 when three commercial scale log stacks were fumigated with EDN to determine emissions during and post fumigation. This trial showed that EDN concentrations during the fumigation in the surrounding environment were extremely low whereas the concentration under the tarpaulins was 41,500 ppm at the start of fumigation. No EDN was detected beyond 5 metres from the tarpaulins during fumigation. During aeration 5m from the side of the stacks 99% of samples were below 10ppm.
When the EDN toxicology and efficacy data is available (expected to be Feb/March 2017) an application for registration to use EDN for the phytosanitary treatment of logs will be submitted to EPA. Provided there are no delays with the EPA process, a registration to use EDN in NZ could be available in late 2017. The importing countries will still need to approve EDN as a phytosanitary treatment for export logs. MPI has indicated that this could take up to 2 years, possibly more.
Areas of low pest prevalence. Through an intensive NZ wide insect trapping network Scion researchers have been able to produce indicative data for three quarantine insect species plotting insect flight activity throughout the year. The work is aiming to reduce risk on the supply pathway by predicting the probability of insect flight based on climatic conditions, topographical features, harvesting history, forest productivity and management regimes.
Further investigations are underway to determine what additional data is required to inform decisions supporting the introduction of periods when insects are not present and fumigation will not be required. This work has already resulted in MPI agreeing to extend the post fumigation holding time from 36 hours to 7 days in Northland and to 21 days throughout the rest of the country. The port logistics benefits and cost savings arising from this change are significant.
Photo: Electrical engineers preparing to treat a log in the Joule heating apparatus at the University of Canterbury.
The death of Newspaper recruitment advertisingI (QJumpers General Manager Simon Oldham) have been following the official job advertising statistics in New Zealand since April 2000 (the same sorts of trends are expected across the Tasman as well). In that time, various people have predicted the death of newspaper advertising as online job boards transitioned from becoming accepted to the norm.
We can now call the ‘time of death’ of newspaper advertising. The organization that now measures these numbers has stopped reporting it and the monthly ANZ NZ Job Ads report has issued a statement that “because newspaper ads have become such a small proportion of the market, we now exclude them from our job ads measure”.
That’s it – game over. It’s official.
Let’s look at the trends over time.
In April 2000, there was a total of 39,442 job vacancies advertised. 9,855 of these were online. That’s 25%. Remember that Trademejobs was not yet launched and Seek New Zealand was only one year old. From January 2002, through to the global financial crisis in 2008, total job vacancies increased incrementally up to a peak of 66,022 per month. It wasn’t until around the beginning of 2005 that internet advertising really started gaining traction. 36% of ads were online in January 2005.
In June 2006, newspaper and online ads were neck and neck. From this point forwards, online advertising continued to gain market share until it plateaued out at 90% at the end of 2014. The last month of newspaper reporting was September 2016. This had online advertising at 94.4% of total jobs advertised. And that was the point that the time of death was called. Fair call.
When the global crisis of 2008 hit, total job numbers plummeted. Companies just stopped hiring. Total jobs advertised went from 62,392 in April 2008 down to 22,438 in June 2009. The significant cost of newspaper advertising just added to the great migration from print to online. In June 2009, online advertising was at 68%.
Total jobs advertised today are still way down on the highs of 2007 but we are on an upward trend. September had 43,689 jobs advertised with 41,221 of these being online. Newspaper advertising is officially dead and now people are starting to predict the death of job boards.
The NRMA FireBlanket: Bushfire DetectionNRMA Insurance in Australia have been working on an early bushfire detection and monitoring network called “FireBlanket”. It’s a prototype designed to sense, locate and track bushfire smoke before spreading a virtual safety blanket over at-risk communities across Australia. It’s early days of course, but you can imagine how powerful this could be, if it was brought to life.
TasPorts and Qube Ports form JV in HobartThe Minister for Resources, Guy Barnett, and the Minister for Infrastructure, Rene Hidding, have hailed a new export deal for southern Tasmanian forestry products as a clear sign of the resurgence of the forestry industry.
“The announcement that TasPorts and Qube Ports have established a joint venture to facilitate the export of forestry products from Tasmania’s southern forests is a red-letter day for the industry,” Minister Barnett said. “This will unlock the potential in Tasmania’s southern forests and importantly, it will create jobs in regional Tasmania”.
“To be clear: there will not be a woodchip pile on the port. This joint venture will complement the recent EOI process to address southern forest residues and I am confident that the export facilities will be well utilised by a number of exporters working in the forestry sector."
Infrastructure Minister Rene Hidding said timber products have long been exported from the Port of Hobart and the establishment of the Southern Export Terminal will see the return of log exports, which have a decades-long history of being shipped from the Port.
Source: Government of Tasmania
New VicForests Chair and Deputy ChairOn Saturday 3 December, Minister for Agriculture and Regional Development, Jaala Pulford MP, announced the appointment of Michael Humphris as the new Chair and Therese Ryan as Deputy Chair of VicForests. With over 35 years’ experience in finance, auditing and consulting, VicForests is looking forward to Michael leading the Board in his new position as Chair.
Michael has extensive knowledge in auditing, asset management, business advice, strategic planning and corporate recovery. Michael has been with the VicForests Board since November 2012 and he took over as Acting Chair in April 2016 after Gordon Davis resigned. Therese is an existing VicForests Director who has been with VicForests for almost four years. She offers decades of experience as a senior business executive and commercial lawyer.
Source: VAFI – The News Mill
Pioneering chemical company goes into liquidationA large employer in Taupo, New Zealand has gone into liquidation weeks before Christmas, with all employees losing their jobs. Pacific T&R opened its Miro St plant in February 2015. It employed 44 people.
The privately-owned company was breaking new ground; extracting resin from pine tree stumps. The extraction method was expensive and in the end the company's investors couldn't afford to fund it anymore, production manager Scott Christensen said. Christensen said there was one other company in the world, in Georgia, USA, that did something similar.
"Taking turpenes out of wood is a piece of cake – it's just a vegetable oil, and you can dissolve it in a solvent," he said. "The resin has provided us with some challenges getting that process right." The difficulty was in finding a cost-effective harvesting model, he said. "It's horrendously expensive, but that's how research and development happens," Christensen said.
Chief executive Brent Wollaston said there was a chance Pacific T & R would have found the right model and become profitable. "It just needed more time and more investment. The existing shareholders just ran out of runway, or appetite, for the investment required." A liquidator report published on Tuesday said liquidators estimate the liquidation will be completed within six months.
U.S. Export Duties to Cause market chaosIn WOOD MARKETS' new five-year Softwood Lumber Chapter forecast, U.S. duties on Canadian lumber exports to the U.S. are expected to cause short-term chaos after they are announced in early Q2/2017.
This new development alone completely changes all previous outlooks as a new approach to "managed trade" by the U.S. kicks off the 5th U.S.-Canada lumber war. The American position is to try and marginalize its largest competitor (Canada) by using elements of U.S. trade law that will allow the implementation of preliminary and prohibitive export duties.
The expected implementation of countervailing (CVD) and anti-dumping (ADD) duties on Canadian lumber exports to the U.S. will cause lumber prices to surge in 2017 and go even higher at various points over the next five years.
The WOOD MARKETS 2017 Outlook has adopted a 25% combined export tax, but the final combined duty determination starting in Q2/2017 could be even higher. While the initial shock and impact of export duty rates of 25% will cause some initial chaos and mill curtailments in Canada, quickly escalating U.S. lumber prices will bring much of the curtailed production back online, but depending on the amount of the final duties.
This trend becomes even more critical starting about 2019 when they forecast the first "supply gap", as they don't see enough other lumber supply being readily available to meet overall projected U.S. demand (at a conservative housing starts forecast) without bringing back more Canadian lumber imports. "This means that Canadian lumber will need high prices to increase exports to the U.S.," commented President, Russ Taylor, "and starting in 2020, record-level lumber prices are forecast in the U.S. market.
Some of the regional trends are summarized here:
- As the export duties will hand U.S. mills a substantial cost advantage (at least before log prices rise to try and extract windfall), a surge of capacity expansions is expected that will allow American mills to dominate its home market. From near 32.9 billion bf in 2016, total U.S. output is forecast to increase by around 10 billion bf by 2021, depending on the initial duty rate - a whopping 6% average annual increase per year and a huge gain from managed trade. This forecasted production surge is considered to be very aggressive and difficult to achieve, but it is considered possible, given the improved competitive advantage of U.S. mills as lumber prices rise from the Canadian lumber imports that face a 25% (or higher) export duty.
- Surplus Canadian lumber is expected to seek other markets and this could disrupt Asian markets, including Japan (diversion of home centre grade as incremental J-grade) and China (offering #2&Better SPF at lower prices in China to obtain equivalent return vs. the U.S. price net of export duties).
- The B.C. Interior timber harvest will drop as the export duties marginalize sawmills processing some of the last economic mountain pine beetle-killed timber. This will cause B.C. Interior lumber production to drop with further sawmill closures expected.
- A 25% export tax on high-value coastal lumber exports is expected to reduce B.C. Coast lumber exports to the U.S. due to many alternative species and products available at lower cost.
- As the highest cost region in Canada, Eastern Canadian mills will have a difficult time absorbing export duties to the U.S., but by 2020, exports will accelerate to fill the U.S. "supply" gap expected.
- European structural softwood lumber imports are forecast to ramp up dramatically to take advantage of the pending supply gap that will trigger higher prices, which is what European exporters need to enter and stay in the U.S. market. The magnitude of European softwood lumber imports is difficult to predict, but higher prices will attract huge volumes to the U.S.
Given the positive outlook for the U.S. housing market over the next five years coupled with U.S. exports duties starting in Q2/2017, a surge in U.S. lumber prices is forecast - smaller in 2017 and then a larger price gain in 2018. Starting later in 2019, we expect a growing shortage of incremental lumber that will require Canadian lumber exports to the U.S. to increase slowly and steadily thereafter, mainly from Eastern Canada. By 2020, it is expected that North American logging and sawmilling capacity will start to lag with overall U.S. lumber demand, and coupled with steady increases in demand and punitive export duties on Canadian exporters - this should allow lumber prices to soar starting in 2020 and beyond. Did somebody say, "super-cycle?"
Full details of the five-year outlook for the U.S. and Canada's lumber and panels consumption, imports, exports, production and price trends are available in Wood Markets 2017 - The Solid Wood Products Outlook - 2017 to 2021. More >>.
Fibria invests $5.3 million in CelluForceBrazilian forestry company Fibria has entered a strategic partnership with CelluForce, a Canadian manufacturer of cellulose nanocrystal. Fibria has invested $5.3 million to become a strategic shareholder in the company, joining Domtar, FPInnovations and Schlumberger as shareholders.
The partnership provides Fibria with the exclusive right to sell and manufacture CelluForce NCC in the South American market, and CelluForce and Fibria will jointly develop additional cellulose nanocrystal applications. CelluForce describes its CelluForce NCC product as “a form of high quality cellulose nanocrystals (CNC).” CelluForce operates a large CNC plant at the Domtar mill in Windsor, Que., capable of producing 300 tonnes per year of CelluForce NCC.
Buy and Sell
... and one to end the week on .... male logic
One of our readers sent this image of their dog (Ronnie - named after Ronnie Wood from the Rolling Stones) dressed up for the festivities so had to include it in the final issue of the year.
That's it. For many of you, it's now time to clean up the office, pack up
for your holidays and plan to move on out. It's been a
delight bringing you Offcuts this year and we're looking
forward to working with you all again in 2017. Have a
We welcome comments and contributions on Friday Offcuts. For details on advertising for positions within the forest products industry or for products and services, either within the weekly newsletter or on this web page, please contact us.
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