Friday Offcuts – 24 June 2016

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Congratulations go this week to FWPA for keeping wood uppermost in Australian consumer’s minds. On behalf of the forestry and wood products industries, a new and extensive advertising campaign to promote the benefits of sustainably sourced wood across Australia has just been launched. The key messages for this latest campaign were identified by FWPA consumer research. Multiple complementary messages around treated wood, packaging, indoor timber and joinery, outdoor decking, furniture and biofuel will be run over a period of months using television commercials, on-line banner and print advertisements on housing and building related websites and through digital media.

We’ve also got the results of some just completed research by FWPA that shows not only is wood most Australians’ preferred material for a wide range of applications, but it’s on the rise as the most used material for renovating, furniture use and redecorating. Details on both the advertising campaign and the just completed consumer research are detailed in two stories in this week's issue.

This week a new policy proposal has been put forward by the Australian Forest Products Association calling on the major political parties in the lead up to next week's election to commit to increased funding for the mechanical fuel reduction programme to reduce bushfire risk. In line with this release, we’ve included here an opinion editorial from AFPA’s Chief Executive Officer, Ross Hampton, where he shares his thoughts on reducing the bushfire risk across Australia.

This week we also take a closer look at the ever increasing competition for wood products in Asia and SE Asia. The growing competitiveness of the Russian forestry industry and impact on those supplying logs and lumber into China is covered. “The Russians are coming” was a key theme of a recent WOOD MARKETS conference run in Vancouver. Russian softwood lumber exports into China are climbing - and climbing rapidly.

They were 1.55 million m3 in April, an increase of 81% from March’s 853,000 m3. March volumes were already up by 55% from February. In fact, Russia’s March export volumes to China had been the largest-ever single month’s volume to China by a single country. This makes the April export volumes even more staggering.

In addition to growing Russian supplies, the chart contained in the story on “North American sawmills losing market share in Asia” clearly shows the growth of European wood exports into SE Asia and we have a piece on a new programme that’s been put in place by Finnish sawmills together with their Government to boost sawn timber exports into China. Enjoy this week’s read.



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Forest portal opens … but industry concerns remain

If you have a question about the environmental and social performance of plantation forestry in New Zealand, it is very likely you will find an informed answer on a new website developed by Scion. The New Zealand Planted Forests Portal, www.nzplantedforests.org, has been launched at the National Fieldays by associate primary industries minister Jo Goodhew.

Funded by the Ministry for Business Innovation & Employment (MBIE) and forest owners, it is designed to be a one-stop information source, particularly for policy makers and regional council regulators.

This information has until now been filed in many – often hard-to-access – locations. In the portal it is structured around an internationally recognised set of indicators of sustainable forestry management. These include biodiversity, productivity, health and vitality, soil and water, carbon and climate, and legal and socio-economic criteria.

Scion forest systems science leader Peter Clinton told the launch function that the forest industry’s social licence to operate had been harmed by the lack of readily available, reliable, public information that clearly portrays the industry’s sustainability credentials, especially in relation to other land uses.

The new website provides the information that addresses these needs. Forest Owners Association (FOA) environmental chair Peter Weir said the portal complements the NZ Wood promotional website www.nzwood.co.nz and for those involved in forest harvesting http://safetree.nz/.

“It greatly improves the industry’s transparency,” he said. “It will be useful for current and potential investors, the media, regional & local government and other regulators, ENGOs, unions, schools and students.”

“But I would be remiss if I failed to emphasise the critical need for the government to get its policy settings right with regard to forestry. Forestry and wood processing are the only two existing industries with a realistic potential to add billions of dollars and thousands of jobs to the economy.”

He said the government had moved in the right direction, by removing the one for two subsidy on emitters under the Emissions Trading Scheme (ETS). As a result, the NZ carbon price (NZUs) is now over $17 a tonne and approaching the level at which it should rekindle interest in new planting.

Mr Weir said the FOA – along with many independent commentators – is convinced of the need for livestock agriculture to be eased into the ETS. “However, this needs to be done at the farm level. The current policy – which the government has put on ice – is for all farm emissions to be paid for by the milk or meat processor. This removes the incentive for individual farmers to reduce their own emissions and would effectively penalise those who do.”

He acknowledged it will be challenge for MPI to design a cost-effective scheme for farmers but, if done properly, farm woodlots could make a farm carbon neutral, with no need for the farm owner to buy carbon offsets in the ETS. Setting aside industry concerns about the ETS, Mr Weir said government support for a national environmental standard for forestry was “hugely appreciated”.

“MPI officials have advanced it and ministers Jo Goodhew and Nick Smith have championed it with their Cabinet colleagues. Without minister Goodhew’s input, five years of policy work by MfE, in collaboration with forest growers, Fish & Game and Forest & Bird would have been lost.”

He said further help is needed from the ministers to unblock a much needed revision of the NZ building standard, which is inhibiting the uptake of innovative timber design.

“Cross laminated timber and laminated veneer lumber in medium-rise residential dwellings have the potential to play a much bigger part of the solution to Auckland’s current housing shortage, but their use is stymied by out-of-date building standards,” said Mr Weir.

He concluded by reiterating the forest owners’ call for government to follow other OEDC countries, and the Rotorua District Council, in adopting a “Wood-First” construction policy.




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New research shows wood is Australia’s favourite material

Ongoing consumer research shows that wood has increased its standing as Australian consumers’ favourite material for a wide range of applications. These research results are also available to industry to use in company and marketing communications – see details at the end of this story.

As part of continually monitoring the market for wood and wood products, Forest and Wood Products Australia (FWPA) conducts annual consumer research studies. The results of this research not only provide information about how people perceive and use wood, they also deliver insights into how consumers regard the forest and wood products industry, the environment and relevant companies and brands. Tracked over consecutive years, the research can also identify emerging trends material usage and changes in market perceptions.

Conducted by Sydney firm Pollinate during May 2016, the latest results show that not only is wood most Australians’ preferred material for a wide range of applications, but that it is on the rise as the most used material for renovating, furniture use and redecorating.

“These findings are in line with previous research results,’ said Ric Sinclair, FWPA’s managing director, “the steady increase we have seen in the preference for wood indicates there is an opportunity for industry to capitalise on the consumer sentiment by ensuring they are offering the widest possible range of wood and wood products.

The increased intent to choose wood has translated into wider use for renovating and outdoor furniture, with significantly more respondents saying they would use wood for these purposes. Overall, one of the key qualities of wood is diversity, as shown by the word map above. This graphic combines answers to the questions in the survey, allocating more size and weight to the most commonly used terms.

“These research results are not only pleasing in that they show the positive effect of industry campaigns promoting the benefits of wood and wood products,” said Mr Sinclair, “but they also provide a solid launch pad for future promotions and related activities. We’ve some exciting new developments regarding communicating with the design and construction sector, including maximising the effect of the recent changes to the Building Code of Australia.”

The code changes to which Mr Sinclair refers came into effect on May 1st 2016 and make it easier to design and build timber framed and massive timber buildings up to 25 metres in height.

If you would like to use some of these research results in your company communications, or if you would like more information about the recent code change, please contact Eileen Newbury, FWPA’s marketing and communications manager at eileen.newbury@fwpa.com.au or call 0419 313 163.

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Key technologies reshaping the wood supply chain

Innovative new technologies such as 3-D printing, autonomous trucking, vehicle platooning, remote controlled felling, new loading and distribution operations, robotics, UAV’s and sensors have all successfully been trialled. They’re already changing planning and logistics in supply chains and increasingly are going to play a significant role in reshaping how the forest products industry supply chain operates.

Recent research has found that 65% of supply chain professionals are using or will invest in 3D printing over the next 2 years. Companies are recognising its ability to produce product and augment manufacturing operations. Gartner Research expects 3D printer sales for example to reach US$13.4 billion by 2018 with a staggering 2.3 million units shipped. Globally, Gartner is predicting shipments to grow at a compound annual growth rate of 106.6% with revenue climbing at a CAGR of 87.7% through to 2018.

Augmented reality has already touched the forestry industry with Hiab recently introducing a system which the company claims is unique in the industry. They’ve used virtual reality (VR) goggles, cameras, and connectivity to develop a new system that improves the safety of the operator and allows them operate the crane remotely – away from the truck. Cameras are mounted on top of the forestry crane, which enables the operator to see the working area and operate the crane remotely using the VR goggles. This and other robotic and automation technologies will form part of the September programme that’s planned.

Self-driving vehicles and drones (or UAVs) are using a variety of technologies including cameras and advanced driver assistance systems to handle some or all functions of operating a vehicle. "By 2017, 20% of logistics organizations will be exploiting drones as part of their monitoring, searching and event management activities”, according to Gartner. Trials for “on demand delivery” using drones have already been undertaken in both New Zealand and Australia.

For driverless vehicles, by 2030, vehicles capable of driving autonomously are expected to represent approximately 25% of the passenger vehicle population in mature markets. Daimler plans to have the truck on the road within a decade. In addition to Europe, the first license for an autonomous commercial truck to operate on a public highway in the US has been granted to Daimler and trials are well underway.

A group of Dutch logistics and technology companies has a much shorter timetable and they are looking to employ driverless trucks to deliver goods from the Port of Rotterdam to other cities in the Netherlands. Volvo Trucks have also been testing vehicle platooning where a convoy of electronically-linked trucks is driven by just the one driver using automated systems in each vehicle that can adjust for following distances and speed. The CEO of one of North America’s leading automated truck driving technology companies, Peloton, will present at Wood Flow Optimisation 2016.

“The September Wood Flow Optimisation 2016 series is going to open the eyes of local companies to technologies that are going to change current supply chain models and operations. As well as new tools and technologies, case studies, trials and systems that have been developed and are being implemented by local forestry companies and their technology partners will be highlighted as part of this latest series” says Brent Apthorp.

Full details on both Wood Flow Optimisation 2016 programmes can be found now on the event website, www.woodflow.events.



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New consumer advertising launches this month

Following the success of the long-running Wood. Naturally Better.™ television advertisement, co-branded with Planets Ark’s Make It Wood program, FWPA is using similar elements and an expanded message in an innovative new mixed media campaign aimed at Australian consumers.

The new campaign, again presented by Peter Maddison and co-branded with Planets Ark’s Make It Wood, is designed to build on and broaden the previous positive environmental message. Comprising a total of six 15 second commercials complemented by online banner and print advertisements, the new communications span a range of topics, all underpinned by wood’s sustainability and environmental benefits.

Topics covered in the new commercials include; treated wood, packaging, indoor timber and joinery, outdoor decking, furniture and biofuel. The new spots will feature on selected free to air TV programs, typically those involving home renovations and building, and digital media including catch-up TV programs and popular online destinations such as Instagram, Yahoo 7, Houzz, Designbook and the design and construction industry oriented Fifth Estate newsletter and website.

“This is an innovative approach to both media placement and multi-element messaging,” said Eileen Newbury, FWPA’s marketing and communications manager, “instead of having a single message delivered in a relatively short time on television, we’ll be delivering multiple complementary messages over a period of months, primarily online.”

Eileen explained that people could click through to the online advertisements to reach a landing page from which they could go to the website that most suited their needs; Planet Ark’s Make It Wood for more environmental news, FWPA’s Wood. Naturally Better.™ for general information and WoodSolutions for design and construction solutions.

“In addition to our media purchases, we are making this valuable material available to industry members to use in their own communications,” Eileen added. If you are interested, please email eileen.newbury@fwpa.com.au or call 0419 313 163.

Source: FWPA




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Policies urged to better fire-proof country towns

The Australian Forest Products Association (AFPA) has released an important new policy proposal that details an innovative approach to help reduce the risk of bushfires developing, and engulfing towns and important rural assets.

This policy builds on the strong recommendation contained in the Forest Industry Advisory Council’s (FIAC) final report ‘Transforming Australia’s forest products industry’, which urged the Government to “commit to a AU$300 million 10-year programme of mechanical fuel reduction as a bushfire mitigation measure for forest and community protection” (Recommendation 2, page 7).

AFPA is calling on the major Parties to commit increased funding to extend the current ‘mechanical removal’ pilot programme from AU$1.5 million to AU$30 million, as well as expand it to a broader range of biomass removal projects around towns and strategic rural assets.

AFPA Chief Executive Officer Mr Ross Hampton said, “The widespread soaking the east coast has just received will, in a few short months, translate into dense spring growth. If it is followed by another hot, dry summer our tens of thousands of volunteer rural fire fighters will again be facing an immense challenge to protect towns and rural assets. The data suggests that climate change is delivering more frequent and more intense bushfires. The loss of life and property is devastating.

Forest industries are also losing tens of thousands of hectares in big fire events. This new policy proposal does not attempt to solve the entire bushfire challenge. It is focused on a new proactive approach to better protect towns and rural assets by creating ‘buffer zones or rings’ with less material to burn. As Einstein famously said, ‘Doing the same thing over again and expecting a different result is crazy.’ It is time to add mulchers to the usual matches and try something different.”

Background

- Deloitte Access Economics (DAE, 2014) estimated the total cost of bushfires in Australia was around AU$360 million in 2014. DAE estimated without change to business as usual activity, this figure could more than double – to almost AU$800 million by 2050.
- The United States Government is seven successful years into a 10-year, $400 million Collaborative Forest Landscape Restoration Program (CFLRP).
- AFPA’s new Policy Proposal ‘Can we better fire-proof our country towns?’ is available here.
- The Forest Industries Advisory Council report ‘Transforming Australia’s forest products industry’ is available here.

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EOI sought on presenting at this year’s ForestTECH

Background:

ForestTECH is this regions premier technology series run by the Forest Industry Engineering Association (FIEA) for Australasia’s senior forest resource managers, forest planners and inventory foresters. Since 2007, it’s the one event every year that continues to draw in foresters from both countries. Key researchers, technology providers and forest owners also pick up the opportunity to build in their own client meetings, workshops and discussion groups around both the New Zealand and Australian events to capitalize on this “once a year” turnout.

What happened last year?

Over 250 delegates attended the ForestTECH series in November 2015. Advances in new data collection technologies including satellite imagery, UAV platforms, airborne and terrestrial LiDAR, harvester heads and automated in-field sensors are increasingly being introduced to forestry operations. Leading communications and resource specialists bought in for the 2015 series demonstrated just how local foresters could best process, analyse and report on the increasing volumes of data that were being collected out in the field.

Technology advancements:

Advanced and faster processing systems are required to handle “big data” with the information now being made available, often in real time, to multiple users. Rapid advancements in smartphones and tablets, the development of user friendly forestry apps along with improved connectivity in more remote locations has changed just how forestry companies are collecting, processing and managing data to improve their own operations. Forestry apps and the development of mobile forestry applications continue to rise exponentially – from the measurement of wood volumes out in the field through to the scheduling and logistics around wood flows.

What’s planned for 2016?

In just 12 months, the pace of change has continued. New tools and technologies have been developed, in-forest trials by leading technology providers along with forestry companies have been completed and are being built into day-to-day forest planning and operations. Numerous research projects have also been completed and are ready to be presented to local companies.

ForestTECH 2016 will provide local forestry companies with a timely and independent overview of data collection tools, systems for better managing and analysing this information and forestry apps that have been developed, are available, and can add value, both operationally and financially, to forestry companies.

At this stage, discussions are underway with forestry companies, researchers and technology providers to design this year’s ForestTECH series. If interested in presenting at what is generally one of the more sought after FIEA technology events within the year, please make contact with Brent Apthorp on brent.apthorp@fiea.org.nz BEFORE Friday 8 July.

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Maori Trust’s first investment in the Pacific

A Maori Trust from New Zealand has been granted land leases over the ‘Eua Forest Reserve, and at least 50 years control over a former public enterprise Tonga Forest Products Ltd, the Tonga government announced on 17 June.

“A Maori Trust representing the interests of two significant Maori Iwis in New Zealand…has agreed to pay $9,737,795 pa’anga in return for the control and management of the company for 50 years, with the option to renew for a further 25 years,” the Ministry of Public Enterprises said in a statement, released through the Prime Minister’s Office.

The government and the Trust agreed to rename the new entity as Aotearoa-Tonga Forest Products Limited. “The new entity will be granted land leases over the ‘Eua Forest Reserve, Vaitaki Sawmilling Site and Mataliku Forest Plant,” said the statement.

The government expected that as part of the Agreement, the Trust will undertake an aggressive Replanting Scheme on the ‘Eua Forest Reserve, with a focus on the replanting of trees in the first 10 years. “The Trust has undertaken to implement sustainable forest management and harvesting practices, in order to allow the trees at the ‘Eua Forest to regenerate and grow at sustainable rates,” it stated, while noting that this is the Trust’s first investment in the Pacific. “The Trust brings with it immense experience in the New Zealand forestry industry, with current exports to South-East Asia and China.”

At the end of the term of the agreement, the Trust is to return the assets and business to the government, together with any new improvements or additional assets and businesses that the Trust has established during the term of the Agreement. The statement said that Board of Directors of Tonga Forest Products Limited are fully supportive of the Agreement between the Government of Tonga and the Trust.

Source: matangitonga.to.




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Russia emerging as a global timber threat

The Global Softwood Log and Lumber Conference held in Vancouver in early May was designed to have an expanded focus on industry developments in Russia and China. Attached is a report from the International WOOD MARKETS Group conference that looks more closely at the Russian forestry industry and anticipated growth in wood processing competitiveness in global markets.

The devaluation of the ruble has had a huge impact on the competitiveness of Russian softwood exports, a trend expected to persist for the short- to mid-term future. However, longer-term competitiveness issues remain, e.g., logistical access to softwood forests and limitations on the economic range of new timber supplies (due to poor the forest management practices of the past). For example, while stumpage fees are very low in comparison to other global regions, the practice of harvesting the most accessible forest areas first has resulted in progressively longer hauling distances to more marginal forests and, consequently, higher overall delivered log costs.

Speakers Jukka Halonen, of StepChange Consulting, and Ken Munson, formerly of International Paper, agreed that Russia’s outdated forestry practices have contributed to the stagnation of its forestry sector. In comparison to countries with more intensive silviculture practices (such as neighbouring Finland), Russian forests have a relatively low growth rate. Further, due to the logistical and economic issues mentioned above, the Russian industry harvests a smaller percentage of its annual allowable cut (AAC): only ~30%.

Perhaps even more alarming, current and past reforestation practices (or lack thereof) have resulted in a steady conversion of logged areas from coniferous (softwood) forests to uneconomic deciduous (hardwood) forests. Indeed, Mr. Munson indicated that, at the current negative conversion rate (some -0.3% per year) in Russia’s Leningrad region, the percentage of coniferous forests will decline from 51% in 2015 to only 20% by 2115.

Fortunately, the opportunity exists to improve Russian forestry practices. In 2013, Russia’s first-ever National Forest Policy was introduced. As of 2016, regional regulations are being developed to address forest management practices, including forest inventory, harvest planning, road building, reforestation and thinning. While forest management activities are expected to have an upfront cost, they will also have several benefits: a reversal of the decline in coniferous forest cover, an increase in log size and quality, a reduction in logistics costs, and a 20%–30% increase in the AAC. Implementation of the policies is expected in 2017 and 2018, with improvements in the Russian timber harvest visible soon after.

In addition to the opportunities available through better forest management, Mr. Halonen suggested that forestry firms can reduce delivered log costs by increasing their operating efficiency. For example, companies can optimize their use of forest leases by planning and coordinating harvesting, transportation and log storage activities around stand structure, road conditions and season. In addition, firms can adopt best practices in harvesting, e.g., by utilizing more efficient harvesting equipment, holding on-site spare parts in case of breakdowns, and improving waste management.

Andrey Bessonov of Ilim Group confirmed that his company is currently working on improving the efficiency/productivity of its logging operations, optimizing logistics, and adopting intensive silviculture practices, with several net objectives targeted by 2030:
- Dramatically increase the company’s timber harvest by 20%–30% through intensive forestry management;
- Increase logging productivity growth by 30%;
- Reduce log delivery costs by 10% (in real terms); and
- Increase the sawlog versus pulp log share by at least 25% by 2030.

Mr. Bessonov went on to explain how the devaluation of the Russian ruble has significantly reduced logistics cost for log shipments from Russia to China. For example, comparing 2013 (before the devaluation) to 2015 (with the ruble devalued by about 50%), the following changes in transportation costs occurred:
- Siberia to Manzhouli (mainland crossing in Northern China): US$40/m3 to US$20/m3;
- Russian Far East to Manzhouli: US$56/m3 to US$30/m3; and
- Western Russia to Manzhouli: US$95/m3 to US$50/m3.

With logging costs also reduced by about half due to the ruble’s devaluation, and given much lower logistics costs, Russians now occupy the low-cost position in terms of delivered log and lumber costs to China; this will solidify its market position in China for some time to come. With such close and low-cost proximity to the world’s second-largest economy, increases in Russia’s export-oriented production are expected to be a key initiative for its log and wood products sector.

Building on this, with its new global competitiveness, major players in the Russian lumber market are undertaking new capacity investments: five of the leading companies have plans for US$500 million in processing investments. The catch: to produce an additional 2 million m3 of softwood lumber, an additional softwood timber harvest of some 5 million m3 is required. This is where the potential for expansions in the pulp and paper sector enter: there are plans for an increase of ~1.3–2.0 million tonnes of new softwood pulp and 0.3 million tonnes of tissue and paperboard capacity.

The increased wood supply to these pulp and paper investments would generate the extra sawlogs required by the new sawmill projects. However, it is important to note that the last greenfield pulp mill in Russia was built many decades ago; aside from one or two large expansions at existing sites, pulp-mill investments in Russia have been rare. Nonetheless, perhaps the new competitiveness of Russia’s industry will allow new pulp-mill projects to commence and, given more intensive forestry management, many of the new sawmill projects could also proceed. It seems the Russians are definitely coming, and planning to export more pulp, logs and wood products.

Source: International WOOD MARKETS Group

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Why it’s time to revisit Australia’s RFA

Former Prime Minister Paul Keating implemented a revolutionary change to the framework for managing Australia’s forests. A quarter of a century later the time has come to revisit the forest agreements, argues Rod Keenan, a professor in the School of Ecosystem and Forest Sciences at the University of Melbourne..

Another Australian election campaign, another call from environmental NGOs for federal intervention in native forests. Native forest timber harvesting has been a feature of federal election campaigns since 1989 when right-wing Labor powerbroker Graham Richardson famously underwent a green epiphany and promoted World Heritage listing of rainforests in North Queensland.

This federal government intervention created a yearly circus over the annual approval of woodchip export licences required under federal environmental law until the 1995 timber worker blockade of Parliament House led then Prime Minister Paul Keating to initiate a new approach: 20-year agreements with state governments: the Regional Forest Agreements (RFAs).

With more than AU$400 million spent to date, RFAs have been the largest investment in environmental assessment and conservation ever undertaken in Australia. The aim was to provide a rational framework for decision-making, but political controversy and state-federal bickering dogged the development of the RFAs almost from the start. Nonetheless, ten RFAs were signed between 1997 and 2001, in Tasmania, Victoria, Western Australia and NSW.

While much preparatory work was undertaken in Southeast Queensland, an agreement was never reached between the Howard and Beattie governments. Instead, Labor in Queensland developed their own agreement with key environmental NGOs to phase out harvesting in public native forests over a 25-year period and invest in hardwood plantations.

So, what have the RFAs achieved? More>>.

Source: Asia and the Pacific Policy Society

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Canada may face sawmill closures

Canadian jobs and sawmills across the country are increasingly at risk because of fading prospects they will avoid a new round of U.S. duties on imported softwood lumber, according to an industry analyst. RBC Capital Markets analyst Paul Quinn says he expects the United States will impose duties of at least 25 per cent in mid-2017 and that will put pressure on Canadian producers.

"They'll be mills shut right across Canada because nobody's making the kind of money that they'd have to pay in the duties," Quinn said in an interview. He expects at least five mills to be affected in British Columbia but declined to say how many sawmills or jobs could be impacted in other provinces.

Quebec-based producer Resolute Forest Products said jobs would also be at risk if Canada accepts a U.S. proposal that would put a 24 per cent quota on Canadian imports. "We don't have a big enough market in Canada to sell our product and so what ends up happening is there is a greater risk of capacity having to be closed," said spokesman Seth Kursman. The company, which operates about 20 sawmills in Canada, believes the federal government should push for free trade because Quebec's forestry system is now market-based and Ontario subsides are inconsequential.

"We believe that Canada shouldn't be rushing to the U.S. and asking for an agreement. Canada is negotiating against itself right now." Kursman said western producers are in a different situation than their eastern counterparts because they own 39 sawmills in the U.S. south and have developed markets in Asia, which give them a hedge against U.S. trade restrictions.

Quinn doesn't see the 100-day negotiating timeline set in March by President Barack Obama and Prime Minister Justin Trudeau bearing any fruit. Obama and Trudeau will meet in Ottawa on 29 June during the so-called Three Amigos Summit with Mexican President Enrique Pena Nieto.

The B.C. Lumber Trade Council says it believes a new agreement, if properly designed, could provide certainty and stability for lumber producers on both sides of the border. "However, if a reasonable agreement cannot be reached, we are also prepared to work alongside the Canadian government to defend the industry against any potential punitive trade actions brought by the United States, as we have done successfully in the past," said council CEO Susan Yurkovich.

Federal Trade Minister Chrystia Freeland and U.S. Trade Representative Michael Froman acknowledged the challenges in reaching a deal in a news release issued by Freeland's office on Friday (A href=" http://business.financialpost.com/news/economy/u-s-and-canada-say-significant-differences-remain-in-softwood-lumber-dispute?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+FP_TopStories+(Financial+Post+-+Top+Stories)"> More >>. Source: Canadian Press

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Carbon should trade in limited range

New Zealand’s carbon prices should be kept within a band of NZ$15 to NZ$50, says a forestry company that has played a leading role in developing the carbon market.

Ernslaw One is the single largest owner of post-1989 forests in New Zealand (the forests eligible to earn owners carbon credits under the Emissions Trading Scheme), and was the first entity to sell New Zealand carbon overseas. In a submission on the second phase of the Government’s current ETS review, the company says that an independent agency should manage carbon prices in New Zealand, within a defined band. “We believe that a realistic price floor would be NZ$15 per tonne and a price ceiling (cap) to be NZ$50 a tonne,” the submission says.

“This proposal would be akin to the Reserve Bank’s mandate to manage inflation within a given band, with the floor and ceiling prices adjusted from time to time to drive emissions reductions, or to incentivise removals via afforestation in order to meeting New Zealand’s international emissions reduction commitments.”

Ernslaw One has been a strong supporter of the carbon market since it was established in 2008. In 2009, the company was the first to sell New Zealand-derived carbon credits internationally, with a trade of 520,000 tonnes to the Norwegian Government, a deal thought to have been worth NZ$11 million dollars.

Song told Carbon News last week that he continues to have faith in the long-term viability of the carbon market, but, as a result of the drastic fall in carbon prices since 2011, has repositioned his company to put more emphasis on log sales. Nevertheless, Ernslaw One was one of the few companies that has kept planting new forests, albeit in small amounts.

The company has also kept trading small amounts of carbon on the New Zealand market in order to build liquidity, but Song says he will not be offering any large parcels for sale until prices reach at least NZ$20.

Source: Carbon News 2016

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North American sawmills losing market share in Asia

"With continued low construction activity in Europe it is no surprise that European sawmills are looking for new markets," says Jenny Wessung, CEO at Woodstat. Southeast Asia is one of the markets in focus and not just China. South Korea, India, Taiwan and other countries in the region are increasing the import of softwood lumber from Europe.

This is clearly seen in the chart, which shows the monthly European exports to Southeast Asia (China and Japan excluded). According to a new forecast from Woodstat, softwood lumber consumption in Europe will increase slowly the next coming years.

Canada is the main exporter of softwood lumber to this region with a market share of 45% (deliveries from leading European exporters, Canada and U.S.). However, ten years ago Canada had a market share of 60%. The European market share has increased from 30% in 2007 to more than 45% during the first quarter of this year. The U.S. has lost market shares during the past two years.

Two countries in Europe export more to the region than other European countries: Germany and Russia. The exports from these countries increased by 500% each during the first quarter of this year compared with same period ten years ago. The Swedish market share has increased since 2011 and has a share of 6% today. It is however slightly less than in early 2009 when Sweden had a higher market share. The Finnish market share has been relatively stable during the last five years, but slightly lower than prior to that. Austria-Slovenia slowly increased the market share to 5% from less than 2% in 2010.

Source: Woodstat AB, www.woodstat.com

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Trained eagles to take down drones

The Dutch National Police Agency's newest recruits have wings - and an appetite for drones. Hunter the bald eagle, shown in action in the video below, is the world's first bird trained to take down drones that cause trouble in the sky.



"During training, they've proved to be the best birds of prey to take down drones," Sjoerd Hoogendoorn told CBS News' Jonathan Vigliotti in the Netherlands. Hoogendoorn developed the program "Guard from Above," and contracts his eagles out to police.

The second Hunter spots a drone, he's off -- and with flight speeds up to 80 miles per hour, there's no escaping his talons. Ben de Kaiser, a trainer, said this mission requires training eagles daily for at least a year. The birds' claws allow them to safely grab any consumer drone, de Kaiser said.

Until now, there was no safe, quick way to capture drones, according to police chief Mark Wiebes of the Dutch National Police. "We expect there to be more drones -people buy them as toys and some will use them in the wrong place, the wrong way," Wiebes said.

The new recruits have another month of test flights before they'll be ready to take off on real-life missions to take down drones. Meanwhile, Dutch researchers are looking into the impact that drone propellers may have on the eagle's claws, to make sure the unconventional mission doesn't put the bird in harm's way.

Source: CBS News, Australian UAV Newsletter

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Sawmills launch Wood from Finland Programme

Finnish sawmills intend to increase their exports to global markets over the next three years. Close to 20 Finnish sawmills are taking part in the Wood from Finland growth programme launched jointly by Finpro and the Finnish Sawmills Association. Koskisen Oy has also joined the export programme. The objective is to increase sawn timber exports by 500,000 m3 over the next few years and, in turn, positively influence Finland’s bio-products economy. Funding for the programme is being provided by the Ministry of Employment and the Economy and the independent sawmilling industry.

The first phase of the Wood from Finland growth programme aims to boost sawn timber exports especially in Chinese markets. To support the programme, two local experts in China have been hired to help identify market opportunities and forge initial contacts. China is an interesting export market because of its dependency on imported timber.

Finnish timber has a good reputation in China, which helps boost demand. In addition, China’s rising standard of living has led to a growing interest in high-quality imported timber. “China appreciates the high quality of Finnish timber, which is well-suited to the needs of local carpenters. Finnish timber grows slowly, thanks to which it does not crack or bend when being worked with or when installed in its final place,” says Mantere.

Last year, Finland exported more than 630,000 m3 of sawn timber to China. The total value of sawn timber exports is estimated at EUR 1.5 billion, which makes it Finland’s fourth largest export product. “Traditionally, spruce sawn timber is shipped to South China and the Shanghai area. Hopefully, with the new export programme, new market areas in China will be found. New export markets for pine sawn timber will also be targeted,” says Jukka Tamminen, Koskisen’s export manager for spruce sawn timber.

Demand for Finnish sawn timber has declined significantly since its peak years. With the scarcity in raw materials subsiding, it is now possible to find new export markets, which is why the Finnish Sawmills Association is actively on board the Wood from Finland programme.

“We want to expand Finland’s sawn timber markets in China and better understand the needs of Chinese customers. Sawmills’ production is based on customer needs, the principles of sustainable development and renewable forest resources,” says the Finnish Sawmills Association’s Managing Director Kai Merivuori.

Source: Koskisen Oy

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Jobs


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... and one to end the week on....only one job

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And on that note, have a great weekend. Cheers.

Brent Apthorp
Editor, Friday Offcuts
PO Box 904
Level Two, 2 Dowling Street
Dunedin, New Zealand
Ph: +64 3 470 1902
Fax: +64 3 470 1904
Web page: www.fridayoffcuts.com


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

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