Driving down the Rotorua Taupo highway a couple of weeks ago I was astounded with the level of conversion from forest plantings to dairying. In that particular stretch of highway there are close to 25,000ha of forest being converted, 15,000 ha to dairy and the remainder to pasture. Other than looking closely at a deforestation tax as part of its proposed new climate change policies, the NZ Government has never entered into discussions nor given a steer on what is an appropriate land use in this country. Economics or the market has always dictated what is an appropriate price and use for the land.
Last week in Australia news broke that the Government is now talking about providing guidance to forestry and other land users. In an unexpected move, the Premier, Paul Lennon told Parliament the Government was finalising its position on ensuring prime agricultural land is used only for intensive cropping, dairying and other similar agricultural purposes. He's decided that tree plantations shouldn't be allowed to encroach on "top agricultural land".
The purchase of some of Tasmania's best farming land, especially in the North-West, has angered many rural communities where they've been arguing that plantation companies such as Timbercorp, Great Southern Plantations and Gunns Ltd, with tax minimisation and investment incentives, have been buying rural land at inflated prices - or at least prices that can't be met by local farmers.
As expected, Tree Plantations Australia has rightly labelled the Tasmanian Government's approach to tree farming on agricultural land as divisive and short-sighted. The chief executive of Tree Plantations Australia, Allan Hansard has said that it's wrong to tell farmers what they should be doing with their land. As in New Zealand, the issue of climate change is being brought into the early debate in Tasmania. In the initial discussions Agriculture is already been labelled as the largest "green house gas" emitting industry in the State. Plantation forestry on the other hand is being promoted as the best land use to fight climate change.
One last point. We apologise to some of our readers who last week weren't able to open Friday Offcuts when they got into work. Overnight (of couse it had to be a Thursday night) our ISP decided to transfer the Offcuts website to a new server. In some regions there was a delay in picking up the changes - and making the link through to last week's issue. The problem should have been rectified by mid day last Friday. Subscribe a friend
Sugarcane industry taking it to plantation forestry
A new report suggests that turning Queensland sugarcane farms into timber plantations could cost communities more than AU$100 million a year. The Australian Sugar Milling Council commissioned the report, worried about the impact of managed investment scheme forestry plantations on the sugar industry.
The Centre for International Economics says 8000 hectares has already been bought by forestry companies. The millers' spokesman, Jim Crane, says that if forestry replaced the sugar industry that it would cost the region economically between AU$32 million and AU$111 million annually. It also suggested that loss of population to those local communities could be anywhere from between 500 to 1000 people".
But the operators of managed investment schemes have rejected the report, saying the findings should not be used to push local councils to change planning laws. David Ikin from Great Southern Limited is reported as saying that any changes which limit forestry will hurt all farmers and that we didn't want to get to the point where Australian farmers are being told what they can grow on their land or who they can sell their farms to. Source: ABC Australia
A$47 million Australian plantations and chip mill sale
Australia's agribusiness manager, Great Southern Limited has made a significant investment in the future of its plantation operations, announcing plans to acquire 14,700 hectares of hardwood plantations and a 50% shareholding in a woodchip mill located in Bunbury in the south west of Western Australia for an expected AU$47.3 million.
The Bunbury processing facility, commissioned in 2004, will continue to be 50% owned by Australian company Pulpwood International Pty Ltd. In 2006, the facility processed and exported approximately 250,000 GMT of woodchips. This asset provides Great Southern with increasing exposure to forestry processing infrastructure in the South West and Great Southern areas of Western Australia. This is an important part of the group's overall forestry and business plans moving forward, particularly as the large forestry estate managed by Great Southern reaches harvest maturity.
Great Southern will use the facility to process timber from both the plantations to be acquired under the transaction, as well as its own existing significant hardwood plantation estate in the region, with the woodchips being exported to the pulp and paper mills of south East Asia. The Port of Bunbury will become the second port the company will utilise for woodchip exports. Great Southern has been exporting woodchip from the Port of Albany since early 2005.
Great Southern's national plantation estate now extends over some 200,000 hectares, with properties established in seven key growing regions nationally. As well as the Bunbury processing facility, the agreement announced today gives Great Southern rights to approximately 14,700 hectares of hardwood plantations established between 1993 and 2003. The plantations will provide resource for Great Southern to use in its own right as well as for use in its managed investment projects. Source: RISI Wood & Timber
New guidelines to assist structural timber processors
New guidelines that will help Australian timber processors meet their structural property compliance responsibilities will be developed by A3P and TimberEd. The "Guidelines for Verification of Structural Timber" will assist large and small producers to demonstrate product compliance with respect to structural timber. All types of hardwood and softwood solid stress graded timber products will be covered by the guidelines as well as new grading methods yet to be applied commercially in Australia. The project is being funded by Forest and Wood Products Australia.
A3P Solid Wood Manager, Mr Peter Juniper said, "The timber industry is suffering from a lack of formal guidance on correctly demonstrating the compliance of their structural timber products. The new guidelines will help reduce the current confusion and potentially save companies time and money previously spent on determining how they should set about addressing their obligations under the Trade Practices Act." Following an extensive consultation phase the guidelines are due for completion in August 2008. A copy of the draft guidelines can be downloaded from www.a3p.asn.au
New waste timber reports available for Australia
Three reports have recently been completed as part of the TDA/A3P project to develop a national strategy for waste timber in Australia. The Treated Timber Products study has found there is 1.4 million cubic metres of treated timber consumed in Australia with approximately 20% of this imported, mainly from New Zealand. The biggest markets are agriculture, urban fencing & landscaping; outdoor building & construction applications (decks, pergolas, etc) and termite resistant house framing.
The report found that 38% of all treated timber is roundwood, 58% sawnwood and 4% engineered wood products. It is estimated that 19.5% of sawn softwood and 6.6% of sawn hardwood respectively are currently treated with preservatives. The report will be used to design targeted education program to ensure that waste treated timber is properly disposed of and to minimise it being mixed in with untreated timber in recycling and energy recovery applications.
In a study on demolition timber, Forsyth Consulting found a high degree of reuse of good quality hardwoods and Douglas Fir in from the demolition process. Key impediments to increase recycling are lack of end products and markets for low value demolition timber, such as small dimension Douglas Fir, hardwoods and all pine, particleboard and MDF products.
Hyder Consulting, in a study on packaging timber, found that 636,000 cubic metres of timber are used to make timber packaging in Australia in 2005-06. In addition 120,000 tonnes timber pallets are used to import goods into Australia. While are high proportion of this packaging are reusable pallets, 290 000 tonnes of timber packaging is disposed of to landfills around Australia each year. The study identified a number of barriers to increased recovery of packaging timber. Interestingly, the recyclers interviewed as part of the study reported that permanent preservatives are not proving to be a barrier to increased recovery of this waste stream.All three reports are being considered as part of the development of a National Strategy for Waste Timber by the National Timber Stewardship Group. Source: timber.net.au
Offer for troubled Canberra sawmill made
Sydney-based Independent Timber Importers has made an increased offer for the doomed Hume mill reports the Canberra Times. The company's general manager said they had put forward an offer late last week to mill's receiver's Pricewaterhouse Coopers, that was higher than its AU$7.8 million offer that was rejected earlier in the week. Independent Timber's main business is as a timber distributor, though it has a sawmill in Adelaide.
$10,000 a hectare being paid for prime forestry land
According to rural lobby group AgForce, cashed up investment schemes with tax advantages no other business can access are inflating agricultural land values. Properties as a consequence are being put out of reach of other primary producers, as evidenced by a recent sale of a far north Queensland property for nearly AU$10,000 a hectare.
AgForce cattle president Greg Brown said the schemes pushed average producers out of the property market by paying up to five times what land is valued for agricultural purposes. "The upfront tax deductions available for forestry schemes are highly discriminatory and are distorting land values," Mr Brown said.
Mr Brown said the 1725ha property "Golden Tyn" at Lakeland Downs sold for AU$16.5 million. The managed investment scheme bidder was the only one in contention despite eight genuine primary production businesses being registered as potential buyers. The Cattle Council estimates managed schemes accounted for about AU$1.26 billion of investment in rural industries in 2005-2006.
Chinese wood manufacturing margins being squeezed
The U.S. housing slump and market slowdown is beginning to seriously impact Chinese wood products export volumes and operating margins in some sectors. In 2003, it was reported that typical Chinese wood products manufacturing operating margins were in the 20%-30% range; these have now been squeezed to 10% or less despite significant market diversification efforts into markets such as the EU, Southeast Asia and the Middle East.
These margin reductions are largely attributable to rising costs (raw material, energy and freight), currency appreciation, the decline/loss of VAT rebates, and lower prices and volumes. Amazingly, the value of land for industrial use in China has increased by 100%-200% since 2003. In fact, a recent survey indicates that 75% of factories polled consider the land's appreciation in value as much greater than the profit generated from the business. Source: WOOD Markets Monthly, October 2007 Report (www.woodmarkets.com)
Visy to pay record AU$36 million in cartel ruling
A record penalty of AU$36 million was ordered on Monday against Visy Board Pty Ltd and its director and owner, Mr Richard Pratt, following findings by Justice Peter Heerey of the Federal Court that Visy Board had engaged in price-fixing and market-sharing contraventions of the Trade Practices Act 1974 with its rival, Amcor Limited.
The penalties plus payment of the ACCC's legal costs mean the bill will be well over AU$40 million. The record penalties followed a settlement agreement between the Australian Competition and Consumer Commission, Visy Board and the individual respondents.
Justice Heerey found the record penalties are "reflective of the fact that this must be, by far, the most serious cartel case to come before the Court in the 30 plus years in which price fixing has been prohibited by statute." "This is one of the most serious, blatant cartels that the ACCC has litigated," Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, said. Source: RISI Pulp & Paper
32,000 jobs lost from Canadian forestry sector since 2002
The forest products industry has issued what can be best described as a plea to the federal government and the Bank of Canada to address the issue of the high-flying Canadian dollar which keeps on hitting new highs almost every day.
Avrim Lazar, president of the Ottawa-based Forest Products Association of Canada, said the rise of the dollar is going "unchecked" and has more to do with weakness in the United States, which is Canada's biggest customer. The Canadian currency has appreciated by 64% in over five years and by 22% this year alone against the US dollar.
FPAC said 32,000 forestry sector jobs have been lost since 2002, and to date this year Canadian mills have announced 54 mill closings, due to overcapacity, resulting in the loss of over 6,500 jobs. Moreover, the industry group added that the wood products sector in Canada had led all Canadian industrial sectors in labour productivity growth over the past six years, recording a rate of growth more than double that of its U.S. counterpart.
...and one to end the week on...a blokes advice column
Dear Walter,
I hope you can help me here. The other day I set off for work leaving my husband in the house watching the TV as usual. I hadn't gone more than a few hundred yards down the road when my engine conked out and the car shuddered to a halt. I walked back home to get my husband's help.
When I got home I couldn't believe my eyes. He was parading in front of the wardrobe mirror dressed in my underwear and high-heel shoes, and hewas wearing my make up. I am 32, my husband is 34 and we have been married for twelve years. When I confronted him, he tried to make out that he had dressed in my lingerie because he couldn't find his own underwear. But when I asked him about the make up, he broke down and admitted that he'd been wearing my clothes for six months. I told him to stop or I would leave him.
He was let go from his job six months ago and he says he has been feeling increasingly depressed and worthless. I love him very much, but ever since I gave him the ultimatum he has become increasingly distant.
I don't feel I can get through to him anymore. Can you please help?
Sincerely, Mrs. Sheila Uisk
Dear Sheila,
A car stalling after being driven a short distance can be caused by a variety of faults with the engine. Start by checking that there is no debris in the fuel line. If it is clear, check the jubilee clips holding the vacuum pipes onto the inlet manifold. If none of these approaches solves the problem, it could be that the fuel pump itself is faulty, causing low delivery pressure to the carburetor float chamber. I hope this helps.
Walter
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
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