Friday Offcuts – 22 June 2007

This week we have for you:

• A first for NZ - carbon credits on live auction
• A3P discusses paper markets in Beijing
• Self-adhesive labels smash the 5 billion m2/year mark
• Rank Group to acquire Blue Ridge Paper products
• Using super critical speed sawing to improve recoveries
• Wood for energy is a waste?
• International innovation crucial to building Australia's future
• Plastic bag backlash may increase paper demand
• Weyerhaeuser completes sale of Canadian distribution
• More pulp capacity closures in China expected
• NZIF honours forestry professional
• Beleaguered Canadian forestry industry facing looming strike
• Jobs
• Used Eqt
• Buy and Sell
• ...and one to end the week on...computer technicians

A first for NZ - carbon credits on live auction

Is this a first? Now running on the "TradeMe" auction site in New Zealand - a live auction of Kyoto compliant, grey market, forest based Carbon Credits. 2700 tonnes have been offered for forward sale in CP1 from a 10 ha radiata pine block in the Canterbury foothills. FSC certification offered, but at a price premium. Dairy farmers and tourism operators are looking.

Check it out on www.trademe.co.nz. How high will it go? Stay tuned at auction close next week.

A3P discusses paper markets in Beijing

A3P CEO Mr Neil Fisher met with the Australian Embassy Minister in Beijing, Mr Graham Fletcher last week, to discuss concerns about recent import prices of copy and tissue paper from some South East Asian countries. The concern comes to light after US manufacturers of wood-free papers launched an anti dumping case against Korea, China and Indonesia. A3P is concerned that some Chinese companies may attempt to avoid US tariffs by redirecting paper products into Australia.

Mr Fisher said, "Imported paper products compete in the market place against Australian-made paper products which are produced under world-class environmental standards across the entire value chain from plantation growing to paper manufacturing". "It is vital we don't allow Australian paper manufacturing standards to be undermined by the dumping of products from countries with lower environmental standards", he said.

Mr Fisher provided the Minister with a copy of A3P's Member Guidelines for stopping imports of illegally logged forest products into Australia. The guidelines provide A3P members with a practical framework for demonstrating the legality of their products. Mr Fisher said, "China is a significant player in Australia's current AU$2 billion trade deficit in timber and wood products".

Self-adhesive labels smash the 5 billion m2/year mark

Self-adhesive label use in Europe has now exceeded the significant five billion square metres a year mark as sales in 2006 soared overall by 7.7%, Jules Lejeune, Managing Director of FINAT, has revealed. Over the last ten years, the use of self-adhesive labels has grown by 86% -- from just under 3 billion square metres in 1996 to last year's 5.281 billion, he told FINAT's annual Congress in Berlin. It passed the 3 billion square metre mark in 1997, and topped 4 billion square metres in 2002. Source: RISI Pulp & Paper

Rank Group to acquire Blue Ridge Paper products

Blue Ridge Paper Products Inc. ("Blue Ridge"), a vertically integrated manufacturer of specialty paperboard packaging products and a broad range of specialty and commodity grades of paperboard and paper products, has announced that its parent company, Blue Ridge Holding Corp. ("Blue Ridge Holding"), has entered into a definitive merger agreement to be acquired by Rank Group Limited for an aggregate consideration of US$338 million, subject to certain adjustments.

Approximately 39% of the common stock of Blue Ridge Holding is owned by an Employee Stock Ownership Plan ("ESOP") for the benefit of certain Blue Ridge employees. Rank Group Limited is the owner of the Carter Holt Harvey Ltd. group of companies, headquartered in New Zealand, and Evergreen Packaging Inc. The merger has received the required approval of the holders of a majority of the common stock of Blue Ridge Holding. Completion of the transaction is subject to customary closing conditions. Source: RISI Pulp & Paper

Using super critical speed sawing to improve recoveries

With increasing pressures to improve lumber recovery the need to push the envelopes for feed speeds for saws has increased. Critical speed for unguided circular saws and the limits of rim speed for this type of saw are understood by the more astute operators in the industry. The driving force behind super critical speed is that the mill can gain on both kerf reduction and increased feed speeds.

Many mills are using super critical speed either by design or accident. The problem for sawmill operators though is "what super critical speed should I run my arbor to get good sawing deviation and stable operation?" Understanding SCSS and how to predict super critical saw speeds for a range of machines and saws currently in use is outlined in a recent paper presented at a sawing technology programme. It can be downloaded for use off www.fridayoffcuts.com.

The SawTech 2007 series is currently being designed for New Zealand and Australian sawmillers and will run in late November. For the first time, both the NZ and Australian Sawdoctors Educational Associations will be linking into the sawing programmes on both sides of the Tasman. If interested in being involved in the two-yearly event, please contact Ken Wilson at ken.wilson@fiea.org.nz.

Wood for energy is a waste?

The European paper industry has published an independent study showing that using wood as a resource for paper products first, and only using it as a source of energy at the end of the product life cycle adds four times more added value to the economy and retains six times more jobs than simply burning wood for energy. The published study (www.cepi.org) is the first of a number of major projects that CEPI is currently undertaking to provide the European Commission with data on the future fibre availability in Europe and the paper industry's potential to help provide the bio-solution to climate change. Source: June 2007 issue of the Bioenergy Australia newsletter.

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International innovation crucial to building Australia's future

A German solid wood wall system - based on a glue-free, nailed, fully automated manufactured panel - has been identified as an emerging technology that could become increasingly relevant to Australias construction sector. The MHM Solid Wood Wall system was just one of the emerging technologies and systems identified in a report prepared for the Forest and Wood Products Research and Development Corporation (FWPRDC) to assess potential innovations for the Australian building industry.

Researchers from CSIRO and Timber Queensland examined and ranked more than 100 technologies and systems, finding the German concept the most applicable technology due to its flexibility in design, ease of construction, and potential use of low-grade and small-size timber. Lead investigator, CSIRO Sustainable Ecosystems Senior Research Scientist Dr Phillip Paevere, said new and emerging technologies could become increasingly relevant to Australia's construction sector if building processes move away from a site-built and trade-based focus, towards a manufacturing or mass-customised product paradigm.

"Any shift along these lines could have big ramifications for the timber industry if it is unable to embrace or compete with such innovations," he said. The move to factory-built components or automated processes is underway internationally. "In the long-term this concept will have an impact in Australia," Dr Paevere said. "It could be the best way for us to make major changes needed in terms of sustainable construction through benefits such as waste minimisation, reduced transport requirements, and re-use and re-cycling of building components."

Although impressed with solid wall-type products such as the German system, Dr Paevere's research team also assessed technologies and products in categories ranging from cladding, lining and insulation to genetically altered wood products and new research. The structural systems category identified the largest number of emerging systems and technologies applicable to Australia's construction industry, such as S

Plastic bag backlash may increase paper demand

US local, state and provincial governments from California to Ontario and Massachusetts are considering ordinances discouraging use of plastic bags following an outright ban enacted in San Francisco in March. Among cities where such legislation has been proposed are Boston, MA; Phoenix, AZ; Los Angeles and Oakland, CA; Portland, OR, and the province of Ontario, according to newspapers across North America.

But it's unclear how much this trend will benefit the 620,000 ton US kraft grocery bag and sack paper market. Many of the proposed ordinances encourage supermarkets to promote plastic bag recycling, offer biodegrable plastic bags or urge consumers to use plastic and textile returnable bags.

Which is environmentally better, paper or plastic? "Neither!" says the US Environmental Protection Agency website, which recommends the alternative options. But it is hard to see how paper will not benefit from fallout from this environmental issue. Asked what practical alternative large supermarkets and pharmacies in San Francisco had to using plastic bags, a retail association executive said, "Paper sacks."

The US kraft grocery bag and sack market has declined from a peak of 2.54 million tons in 1984 mainly due to the lower cost of plastic sacks, currently around one cent/bag vs. five cents for paper bags, according to Supermarket News, a retail trade publication. As a result plastic bags, first introduced in the US in 1977, now account for an estimated 90% of the bags used at grocery stores. Source: RISI Pulp & Paper

Weyerhaeuser completes sale of Canadian distribution

Weyerhaeuser Company (sales in 2006 of US$21.9 billion) has announced it has completed the sale and transfer of its Canadian building materials distribution assets to Platinum Equity of Los Angeles, California. The sale includes all of the company's distribution centres in Canada. Weyerhaeuser will maintain a significant presence in Canada following the sale. The company will continue to employ about 3,500 Canadian employees - producing and distributing softwood and hardwood lumber, engineered wood, oriented strand board, plywood, and pulp-across the country. Weyerhaeuser is also still in preliminary negotiations for ten U.S. building materials distribution sites.

More pulp capacity closures in China expected

Asia Pacific Resources International (APRIL) believes more pulp capacity may be forced to close down in China but that shutdowns on the paper and board side will be offset by investments in newer machines. Speaking at RISI's 8th Asian Pulp & Paper Outlook Conference in Shanghai, Allan Yong, president of APRIL China, noted that the Chinese government has ordered the closure of a number of small and inefficient mills.

The move could lead to a reduction in capacity totalling 6.5 million tonnes/yr of paper and board, 2.5-3 million tonnes/yr of wood pulp and non-wood pulp, and 2 million tonnes/yr of recovered paper processing capacity, according to the China Paper Association. This will include non-wood pulp lines with a capacity below 34,000 tonnes/yr and wood pulp lines under 17,000 tonnes/yr, as well as small paper and board machines and recovered paper processing lines that fail to meet environmental standards.

Yong said that with 11 million tonnes/yr of nonwood pulp production in China, he believes that the closure of an estimated 3 million tonnes/yr of pulp capacity could just be the beginning, unless pollution can be managed. While he forecasts that Asia will remain a net importer of pulp, mills in the region are expected to contribute significantly to China's growing fibre needs. And Chinese firms are also investing in pulp production, with an additional 5.4 million tonnes forecast to come online over the next several years. This is expected to boost demand for wood chips by 10.8 million bone dry tonnes, compared to the current import level of just 890,000 bone dry tonnes.Source: RISI Pulp & Paper

NZIF honours forestry professional

The New Zealand Institute of Forestry Inc (NZIF) made John Ruru a Fellow of the Institute at its recent AGM. In announcing the honour at the recent combined conference of the Institute of Foresters of Australia and the NZ Institute of Forestry at Coffs harbour, NZIF Vice President Andrew McEwen noted that being made a Fellow recognised Johns leadership in forestry, particularly in developing Maori interest and involvement in forestry.

John has been active in the forestry industry for over 41 years, initially in the New Zealand Forest Service, then as a Regional Conservator for the Department of Conservation, and more recently as a Registered Forestry Consultant based in Gisborne.

His leadership includes in the areas of training, especially Maori youth, and providing advice on historical land administration and Maori land issues. "John's nomination as a Fellow of the Institute recognises that he has achieved a level of eminence in the forestry profession widely recognised by his peers and that he has set high standards and provided leadership."

Beleaguered Canadian forestry industry facing looming strike

Canadian forestry companies could be forgiven for thinking their world is coming to an end. A soaring Canadian dollar, low prices due to weakness in the U.S. housing market and a 15-per-cent export tax for lumber headed to the U.S. have all combined to hammer the industry and prompt a wave of mill shutdowns as companies look to reduce supply. And now the potential for a strike by thousands of workers on the B.C. coast looms. Roughly 8,000 workers represented by the United Steelworkers have voted 90 per cent in favour of a strike. More >>.

Jobs

Used Equipment

Buy and Sell

...and one to end the week on...computer technicians

Mujibar was trying to get a job in India

The Personnel Manager said, "Mujibar, you have passed all the tests, except one. Unless you pass it you cannot qualify for this job."

Mujibar said, "I am ready"

The manager said, "Make a sentence using the words Yellow, Pink and Green."

Mujibar thought for a few minutes and said, "Mister manager, I am ready"

The manager said, "Go ahead."

Mujibar said, "The telephone goes green, green, and I pink it up, and say, 'Yellow, this is Mujibar.'"

Mujibar now works as a technician at a call centre for computer problems

No doubt you have spoken to him. I have.

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