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Friday Offcuts – 27 October 2006

growing trees cutting and milling timber forest products
In New Zealand the sharp drop off in planting is well documented. Last year forest plantings totalled just 6,000 ha compared to an annual average of 43,000 ha over the last 30 years. Compared to the normally small area that isn't replanted after harvesting - generally 2 to 3 % - the figure had climbed rapidly to 18% in 2005. Nursery surveys have just gone out for the last planting season but the early indications aren't looking promising.

By contrast, A3P and the Australian Forest Growers (AFG) have welcomed the release of new plantation figures this week that show the industry on the other side of the Tasman is viable, sustainable and maintaining healthy growth. The Bureau of Regional Sciences report, Australian Plantations 2006, identified over 72,000 hectares of new plantations established in 2005, comprising 91% hardwoods and 9% softwoods.

According to the report Australia's combined plantation estate in 2005 was 1.7 million hectares, just over 100,000 ha less than New Zealand's - or less than two seasons of new planting based on current levels. What is also interesting in the Australian figures is that plantations have supplied 62% of the logs harvested from all Australia's forests last year. Private ownership of plantations also now stands at over 57% compared to about 30% in 1990.

The reasons for the differences are many. New Zealanders look longingly at Australia where investors have taken advantage of the Government's supportive tax regime for new plantings. Private investors in New Zealand forestry have been leaving in their droves and the Government's climate change policy of course hasn't helped.

For an industry really after a boost, check out story number nine below. The forestry industry in Quebec going through tough times at the moment has just been given a C$300 million boost in the arm, on top of the C$425 million previously announced for forestry companies. A large chunk of this is going into reforestation. Level playing field. Makes you think huh?
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This week we have for you:

Plantation chemical use only 0.7% of National total

A3P and Australian Forest Growers (AFG) have welcomed the launch of a report on Monday, showing the Australian plantation industry's chemical use is insignificant, well managed, tightly regulated and continually improving.

AFG Chief Executive Mr Warwick Ragg said "Pesticides in Plantations" provides a comprehensive survey of chemical use by the plantation timber industry with growers representing more than 90% of the Australian plantation area responding to the survey. "Plantation forestry is a minor component of Australian chemical pesticide use with its estimated AU$16.2 - $20.9 million expenditure in 2003-04, accounting for just 0.7 per cent of the AU$2.4 billion national total spending on chemical pesticides", said Mr Ragg.

"Aerial application of chemical pesticides by the plantation forest industry accounts for a maximum of 0.5 per cent of the total 10 million hectares of land aerially treated with a range of chemical products each year across Australia. And industry survey results indicate most chemical pesticides are used at less than 50 per cent of the maximum label rate", said Mr Ragg.

A3P CEO Mr Neil Fisher welcomed the report as an objective analysis showing the industry's chemical use was insignificant compared to other users such as agriculture. "Unlike agricultural crops, which tend to have a higher frequency of use, chemical use in plantations is usually confined to the first two years of a 10 to 30 year crop cycle".

Pesticides in Plantations, was launched this week by the Australian Federal Forestry Minister the Hon Eric Abetz at the AFG Conference in Launceston. The report was commissioned by the Forest and Wood Products Research and Development Corporation in response to a proposal by A3P and AFG. A summary of the Pesticides report can be found on www.fwprdc.org.au



New technologies to process plantation hardwoods

Forest Enterprises Australia Ltd is a vertically integrated forest products and manufacturing company. It currently grows, manages and maintains 42,000 hectares of hardwood plantation forests in Tasmania, NSW and Queensland.

The company has achieved the first full-scale commercial production of sawn timber from Australian plantation hardwood (Eucalyptus nitens) after initial trials beginning in 2003. The product is named "EcoAsh". Trees processed are both 9 year-old thinnings and 15 year-old clearfall.

Successful production of EcoAsh has necessitated novel processing technologies. Key to FEA's success in sawing young plantation E. nitens has been the application of HewSaw sawing technology from Finland. This is the first application of this equipment to hardwoods in Australia. As well as cutting boards much faster than traditional sawmills, the HewSaw also achieves a volumetric recovery of boards from log of approximately 40%, much higher than traditional sawing systems.

A novel kiln technology, the press-kiln from TeknoComp of Finland will also soon be installed at Bell Bay to accelerate kiln drying along with a laboratory including strength testing apparatus. This case study of an innovative Australian company that is utilising a range of new technologies to process and market Australian plantation hardwood will form part of the DryTech programme which runs for Australian and New Zealand kiln drying operations later this month. Full details on the series can be downloaded from www.fiea.org.nz/next-event




NZ log prices - October 2006

 
Overall Log Index

Demand in all our major export markets continues to go from strength to strength, with several exporters of the opinion that prices could go higher yet. The most heartening aspect about this seven month winning streak is that the fundamentals are sound. Often in the past such price rises have been unsustainable, because our overseas customers have not been able to raise the price of their finished goods and have incurred heavy losses.

The Agri-Fax Log Price Index, which measures returns from the whole forest, was up $1/tonne to $77 (delivered mill/wharf basis) and is at the highest level for six years. Rising export log prices and chip prices more than offset slightly lower North Island pruned prices. The outlook is very bright for the export log trade, although high shipping rates are likely to take some gloss off this for quite a while. The domestic log market urgently needs a sharply lower $NZ to improve export lumber prices and sawmill profitability.

Log price changes:

North Island:

  • Domestic: Pruned prices are steady to down by up to $5/tonne, although the average drop is only $1/tonne. Unpruned sawlogs are steady to +$2/tonne. Roundwood is slightly weaker, but chip prices are fully firm.
  • Export: Export prices have moved up $2-$3 per jas metre for all grades in the North and CNI, but are surprisingly mixed in the lower North Island - KS slightly weaker on average while KI is stronger.
South Island:
  • Domestic: All domestic grades, both pruned and unpruned are generally unchanged, although there is some downward pressure on structural log grades and upward pressure on chip log prices.
  • Export: Most export grades, including pulp, are up about $2 to $4 per jas metre on average.

For more detailed reports contact Agri-Fax at:www.agri-fax.co.nz/enquiries.cfm




CEO appointed to Canada's new forest research institute

Frank Dottori, Chairman of the Board of Paprican, Don Banks, Chairman of the Board of FERIC, and Phil Latos, Chairman of the Board of Forintek Canada Corp. have announced the appointment of Dr. Ian de la Roche to the position of President and CEO of a newly created forest-sector research institute.

The creation of this new research institute follows the approval, in June of this year, by the respective Boards and member companies of Paprican, FERIC, and Forintek, of a new structure to regroup the activities of the three organizations. The appointment of Dr. de la Roche is an important milestone in the creation of this new entity. Over the coming months, an integration plan will be developed and presented to the members of each institute for final approval.

Dr. de la Roche brings with him over 30 years of experience in research, research management, and strategic planning. Currently the President and CEO of Forintek Canada Corp and FERIC, his prior positions include Assistant Deputy Minister at Western Economic Diversification, and later, as Assistant Deputy Minister at Agriculture Canada. In his new role, he will be working closely with the management and member companies of Paprican, FERIC, and Forintek to bring the new single Institute to reality.Source: RISI Pulp & Paper




Douglas fir promoted through new web site

The Douglas Fir Association comprises twelve companies involved in either growing or processing and production of New Zealand grown Douglas-fir timber. It was established two years ago to co-ordinate and advocate industry-wide issues. It now provides a credible and inclusive voice to promote the collective interests of Douglas-fir growers, processors and manufacturers at a national and regional level.

The Association champions the use of wood as a building material and encourages the use of Douglas-fir as a preferred option with genuine advantages. As part of an integrated campaign for promotion of timber use and Douglas fir, a new website has just been launched, www.douglasfir.co.nz

The site is aimed at the domestic market - at the hearts and minds of consumers with a wide range of technical information on the use of the timber which has been incorporated onto the site for architects and engineers. Posters, calendars and a range of other resources and initiatives are currently planned which will compliment the new website.




Arauco prepares to launch softwood pulp production

Arauco aims to begin manufacturing radiata pine pulp on fibre line 1 at its new Nueva Aldea mill, in Chile's Bio Bio region, next month. The company is currently producing 500 tonnes/day of bleached eucalyptus pulp on both lines 1 and 2. Nueva Aldea's line 2 will be dedicated solely to hardwood pulp once the switch takes place on line 1 in November.

The mill has a total capacity of 856,000 tonnes/yr of pulp, half eucalyptus and half pine pulp. The firm plans to sell 45% of its output to China, with the rest going to Europe and Latin America. Arauco started up the facility early last month and expects to reach an output of 1,300 tonnes/day by next May. The pulp plant is part of the US$1.4 billion Nueva Aldea forest products complex, which includes a biomass energy generator and a sawmill.Source: RISI Pulp & Paper




Assessing resin defects in radiata pine

Research projects funded by the Wood Quality Initiative (WQI) and Ensis are applying a joint approach to a common problem. Scientists are collaborating across New Zealand and Australia to address the issue of resin defects in radiata pine.

The research will examine the effect of wind and water stress on the formation of resin defects, which degrade the value of appearance grade products. Researchers will use a range of tools including the process based growth model CABALA, which was developed by Ensis scientists in Australia to determine the effect of environmental stresses on tree growth.

The projects with WQI are investigating what are believed to be the main physiological causes of resin defect in radiata pine. This represents a major initiative as part of a research partnership with WQI and is designed to pull together a lot of disparate research results in the past. More >>




New service for NZ companies in the US

Making exporting to the United States easier for small New Zealand companies is the aim of a new warehousing and logistics base in Atlanta. Base3usa has been set up by the business people behind Tauranga company Trimax Industries, which has been successfully exporting its mowing equipment to the United States for some time.

Trimax Industries' Managing Director Bob Sievwright was part of a group of Bay of Plenty exporters looking at logistics issues in the United States with the help of New Zealand Trade and Enterprise two years ago. While a collective approach did not result, Mr Sievwright spotted a gap in the distribution market for small New Zealand companies that did not have the scale to fit cost effectively into existing logistics options in the United States.

He and partner Moira Moroney set up Base3usa, with Moira as Managing Director, to help New Zealand companies "get to third base" in terms of exporting to the United States. Base3usa offers warehousing, logistics, and fulfilment options and is based on the outskirts of Atlanta, Georgia -- within a day's drive of 80 percent of the United States population. Its facilities include a 10,000 sq metre warehouse suited particularly for the storage of heavyweight goods, small items, or parts and sub-assembly kits. Base3usa also offers customers logistics and fulfilment options and the capacity to set up a virtual office in the United States.

For more information see www.base3usa.com Source:NZTE




C$300 million hand out for Quebec forestry sector

The Quebec government is spending nearly C$300 million in new money over four years to help the province's battered forestry sector. Nearly two-thirds of the funds will go to reforestation, building roads and fighting forest fires. Another C$55 million will be spent on helping elderly workers who have been laid off, while C$45 million will go to communities hit hard by the forestry crisis.

Premier Jean Charest said Quebec will also maintain C$425 million in previously announced loans and loan guarantees for forestry companies. Industry officials in Quebec say at least 3,000 jobs have been lost since April 2005 because of the closure of 36 plants. They also estimate that temporary shutdowns have forced the layoff of more than 4,000 other workers over the same period.




China and Chile reach agreement on tariff reduction

As a follow up to news last week on the Japan and Chile meeting agreeing on a framework for a FTA, China and Chile have also agreed to remove tariffs from October and to advance their free trade (FTA) agreement talks. Under their cargo trade agreement, Chile agrees to remove the tariff rates of 5,891 products imported from China while China will reduce the tariff rates of 2,806 products imported from Chile to zero this year and would remove the tariffs of another 1,947 products next year. Most of the products are farm produce, petrochemical, electronic and machinery products. In 10 years, 97% of the cargo items involved in the FTA would be gradually exempt from import tariffs. Source: ITTO TTM Report 1-15 October 2006.




New spotted gum hybrid released in Australia

The Department of Primary Industries and Fisheries has provided a major boost to Queensland's emerging hardwood plantation industry with the release of a new hybrid of the native spotted gum.

Minister for Primary Industries and Fisheries Tim Mulherin said the hybrid was an excellent outcome for the environment and the Queensland economy. "Plantation grown timber is the way of the future, and support for this industry will ensure that by 2025, harvesting from state forests will cease," Mr Mulherin said.

"To accommodate the need for an appropriate species to populate these plantations, DPI&F researchers have bred the new Corymbia hybrids". Mr Mulherin said the major economic benefit from the project would be derived from making available the required quantities of this improved hybrid planting stock to industry in a relatively short period of time.

"Our researchers, led by Dr David Lee, have spent nine years perfecting varieties which they feel will pave the way for a successful and lucrative hardwood plantation program for Queensland. "The evolution to these trees - now available for commercial release - has been a rigorous, exacting and scientifically thorough process," Mr Mulherin said.

Dr Lee said scientific staff had considered no less than 86 hardwood species in more than 600 hectares of trials and in seed orchards since 1997. "Our trials have all indicated that spotted gum within the genus Corymbia, the most commonly harvested hardwood timber in Queensland with excellent timber qualities, was the right type of tree but had some problems for plantation growth," Dr Lee said.

"We found however that when combined with its close relative Corymbia torelliana, we gained the ability to propagate the trees, overcame disease problems and produced varieties that grow faster than either of the parent species". The Corymbia hybrid clones were launched in Gympie last week.




Termite breakthrough in Australia

The Australian Department of Primary Industries & Fisheries (DPI&F) research indicates that untreated wood at a termite infested site increases the need for higher concentrations of preventative chemicals in treated wood at the same site. According to DPI&F Research Scientist Dr Brenton Peters, in the case of borate treated timber at least, his team's research shows that how much untreated timber or other feed material available at a termite feeding site has a direct relationship on how much preservative is enough to prevent termites from eating treated timber.

"We instigated the study because we were puzzled by conflicting results from laboratory and field studies that indicated that sometimes 0.5% borate retention would do the job, whereas at other times considerably higher levels were needed," Dr Peters said. "Our findings indicate that the bottom line for controlling termites chemically is to limit the amount of untreated wood available for them to forage upon at any given site".

"Laboratory data indicated that a borate retention of 0.5% within the mass of the timber would cause greater than 90% termite mortality and restrict mass loss in timber to 5%, which is a good outcome. However, most field data suggested that borate retentions appreciably in excess of 0.5% mass were required. So we wanted to find out why this was the case".

"The confusion is further compounded by differences in termite species, timber species and test methodology. Our aim was to evaluate the response of Coptotermes acinaciformis (Froggatt) to borate-treated radiata pine sapwood in the presence of varying amounts of susceptible timber in the field in an above-ground, weather-protected situation".

"We have concluded that the untreated material probably has two effects - firstly, a "diluting" effect on individual termites and, secondly, it increases the number of termites feeding on the treated timber. Commercially, a figure of 2% borate retention is registered for use in Australia. Our results have indicated that this is probably a safe figure to keep in place, but it is satisfying to know what is really going on".




US furniture market amount to $78.5 billion

The total value of the US household furniture market at retail prices amounted to an estimated US$78.5 billion in 2005. Close to US$30 billion dollars (38% of the total market size) was wooden case-goods (mainly bedroom, dining and living room, and kitchen furniture). Five states (California, New York, Texas, Florida and Illinois) together accounted for 38% of the entire US market for household furniture. The top 26 metropolitan areas account for 42% of the US population and almost half of the estimated sales of household furniture. Source: ITTO TTM Report 16-31 August 2006.





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...and one to end the week on...counting the pennies

A young Scottish lad and lassie were sitting on a low stonewall, Holding hands, and just gazing out over the loch.

For several minutes they sat silently, then finally the girl looked at the boy and said, "A penny for your thoughts, Angus."

"Well, uh, I was thinkin' perhaps it's aboot time for a wee kiss."

The girl blushed, then leaned over and kissed him. Then he blushed.
Then the two turned once again to gaze out over the loch.

After a while the girl spoke again. "Another penny for your thoughts, Angus."

"Well, uh, I was thinkin' perhaps its aboot time for a wee cuddle."
The girl blushed, then leaned over and cuddled him. Then he blushed.
Then the two turned once again to gaze out over the loch.

After a while the girl spoke again. "Another penny for your thoughts, Angus."

"Well, uh, I was thinkin' perhaps its aboot time you let me poot me
hand on your leg."

The girl blushed, then took his hand and put it on her leg. Then he blushed. Then the two turned once again to gaze out over the loch.

After a while the girl spoke again. "Another penny for your thoughts, Angus."

The young man knit his brow. "Well, now," he said, "my thoughts are a bit more serious this time."

"Really?" said the girl in a whisper, filled with anticipation.
"Aye," said the lad.

The girl looked away in shyness, began to blush and bit her lip in anticipation of the request.

Angus blurted out, "Din'na ye think it's aboot time ye paid me the first three pennies?"



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

Brent Apthorp
Innovatek
PO Box 904
Level Two, 2 Dowling Street
Dunedin, New Zealand
Ph: +64 3 470 1902
Fax: +64 3 470 1904
Web page: www.innovatek.co.nz


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

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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