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Friday Offcuts – 29 February 2008

growing trees cutting and milling timber forest products
In New Zealand the Government's currently calling for submissions on proposed changes to an emissions trading market. A draft of the emissions trading regulations for forestry have just been released as part of the submissions process with submissions closing on 10 March. The proposed regulations for the forestry sector cover obligations for owners of forests planted before 1990 with the "officials" still developing regulations for forests planted after 1989. A powerful new alliance has also just been set up to seek changes to the proposed Emissions Trading Scheme (see story below).

With these planned moves locally to introduce mechanisms to mitigate the affects of climate change, it was interesting to see an article last week with a fresh take on who is responsible for global CO2 emissions. The headline was that the booming shipping industry is emitting far more pollution than anyone realised. The article put into perspective the issue - and priorities for Governments - as they target initiatives to arrest climate change. We've heard all about air miles. The aviation industry has been at the top of the climate change agenda and is expected to be included in the EU's trading scheme.

Until now reducing CO2 emissions from the world's fleet of almost 90,000 large ships - which are now carrying more than 90 percent of the world's trade by volume - has not been a priority of either Governments or ship owners. The previously accepted figure - drawn from information supplied by the industry - has been that a maximum of 400 million tonnes of C02 - or around 1.8% of global emissions are being caused by shipping. In the last few weeks we have the disclosure that emissions from shipping are now three times higher than previously thought with a draft UN report saying that the world's growing shipping fleet constitutes nearly 4.5% of world emissions.

An example is given in the article of the world's largest container ship, the Emma Maersk. It moving its monthly cargo of 13,000 containers between China and Europe. What is really interesting is the output from ship's diesel engine in getting it across the oceans - it can emit more than 300,000 tonnes of CO2 a year - the equivalent of a medium sized coal power station. For an industry reliant on shipping to get our wood to market, this latest finding is important. The shipping industry from this point on is not easily going to escape the attention of climate change experts, Governments and environmental campaigners.

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FEA launches sawmill at Bell Bay, Tasmania

Forest Enterprises Australia (FEA) launched its new AU$70 million sawmill at Bell Bay in northern Tasmania this week. Andrew White, FEA's Chief Executive Officer, said that the FEA sawmill was now a leading employer in the Northern Tasmanian region and would make an important contribution to the Tasmanian economy. When fully operational, the new mill will employ approximately 120 people and will provide significant additional employment and an economic boost to northern Tasmania.

The new sawmill offers state of the art equipment with specialist Canadian technology chosen to process logs at speeds of up to 150 meters/min. The log saw line will give us the ability to cut small diameter plantation eucalypt as well as standard plantation pine products, said Mr White. He notes that, following commissioning, the capacity of the mill would be increased progressively with a 450,000 ton per year log input in Year 1 ramping up to 650,000 tons per year in 2011. Ultimately, the mill has a 1,000,000 ton per year capacity. In terms of throughput, Mr White said most of the plant would initially run with a single shift and, as capacity rose, additional hours world be worked.

The opening of the new sawmill coincides with the launch of FEA's new branded softwood timber product, BassPine, a high profile Tasmanian brand which will sit next to FEA's other timber hardwood brand, EcoAsh. Forest Enterprises Australia Ltd was formed in 1985 and has established eucalyptus plantations in Tasmania and on mainland Australia. FEA Plantations Ltd, a wholly owned subsidiary of FEA, commenced its first managed investment scheme in 1993 and has issued a new woodlot project every year since then. In recent years, FEA has expanded its sawn timber products, EcoAsh and BassPine, as well as export woodchips under the SmartFibre brand. Following completion of current planting obligations, FEA will have approximately 52,000 hectares of plantation under management for approximately 9,000 growers.



New alliance to work on Emissions Trading changes

Some of New Zealand's largest exporting companies have joined forces to seek changes to the proposed Emissions Trading Scheme (ETS) that they say will encourage the planting of more than 800,000 hectares of seriously eroding hill country land.

The Flexible Land Use Alliance, launched in Wellington yesterday, consists of Blakely Pacific Ltd, Carter Holt Harvey Ltd, Fonterra Co-operate Group Ltd, Forest Enterprises Ltd, Landcorp Farming Ltd, the New Zealand Forest Owners Association Inc., PF Olsen Ltd and Wairakei Pastoral Ltd.

It says proposals to impose massive retrospective liabilities on owners of land planted with trees prior to 1 January 1990, who want to convert their land, have devalued forestry land throughout New Zealand and had a chilling effect on confidence to plant new trees.

The liabilities, which were previously thought to be around $13,000 per hectare, are now feared to be as much as $65,000 per hectare, depending on factors including future prices of carbon and the value of the New Zealand dollar. A conservative long-term average is likely to be around $20,000 per hectare. More >>



Researchers develop breakthrough composites technology

Researchers at the University of Maine's Advanced Engineered Wood Composites Centre have developed a new composite fabrication process that they hope will revolutionize the industry. Their method involves the use of applied pressure to infuse polymer resins into fabrics, wood, concrete, ceramics and other materials to produce stronger, more durable composites for the marine, automotive, construction industries and others.

A patent has been granted for the Composites Pressure Resin Infusion System, or ComPRIS. The process promises distinct advantages over such conventional methods as hand layup and vacuum resin transfer, the researchers say. The use of pressure produces a more consistent, evenly distributed resin infusion that saves both money and labour and is environmentally safer than other methods. It also allows fabricators to produce more complex infusions, including simultaneous laminating and reinforcement of other materials.

Barry Goodell, a professor of wood science and technology in the College of Natural Sciences, one of the four founding faculty members of UMaine's world-class composites centre, says the ComPRIS technology can produce very thick composite products without the microscopic voids caused by a vacuum process. Wood products can also be reinforced and laminated at the same time. When properly infiltrated with resin, wood becomes more stable and decay-resistant, thereby eliminating or reducing the need for preservative treatments.



New Zealand Log Prices - February 2008

It's been both a steady and quiet month in New Zealand's main export log markets, primarily due to the Chinese New Year. There has been a slight price easing, as inventories have built up in a number of destinations. However, it has been the shipping cost roller coaster ride that has taken exporters from a high of $76/metre in early Jan to a $55 spot price in early Feb, and now heading back to US$70. The uncertainty is likely to be reduced in coming weeks, as shipping owners assess the demand from China post holiday.

A stronger NZ dollar against all our log trading currencies, along with weaker overseas prices has meant that the lower shipping rates have only resulted in a $3/metre increase to the NZX Agrifax Market Indicator price. This is also the average amount that exporters raised their wharfgate prices this month.

In domestic log markets pruned log prices were mainly stable, but there is downward pressure coming in the face of increased supply and also falling overseas lumber returns. Poor demand in the US with their soft US dollar and weak housing market is seeing NZ returns approaching their lowest point for 6 years. US retailers are becoming quite cautious with little forward buying. Despite the normal upswing in logging activity, unpruned prices also remained steady this month, but sawmillers point out that any oversupply from the export industry in coming months will cause some price weakening.

The NZX Agrifax Log Price Index, which measures returns from the whole forest, rose to $NZ72 a tonne, a rise of $1. The rise was mainly due to the improved export log returns.

Log price changes:
North Island

  • Domestic: Pruned prices are steady to down $10/tonne over both regions. Other domestic grades are generally steady, including pulp.
  • Export: Most grades are up $4 to $6 a metre, with increases slightly higher on the east coast. Pulp log prices are unchanged.

    South Island:
  • Domestic: Prices for all grades are generally unchanged from last month. "A" grade is currently $58 to $70 per tonne.
  • Export: KS and KI prices are up $2 to $5 a metre, with exports now moving out of Otago again.

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



    Purbond Adhesives approved for structural wood uses

     
    Purbond, a joint venture between National Starch & Chemical and Collano, is situated with its Centre of Competence in Switzerland. Purbond develops, produces and markets one-component liquid moisture-curing polyurethane adhesives for the production of Engineered Wood Products (EWP's). The company is a joint venture between National Starch & Chemical and Collano.

    After 20 years of experience in Europe, the company recognised the market potential in Australia and New Zealand for their environmentally friendly and formaldehyde free one-component polyurethane adhesives. EWP producers in Australasia will benefit from the faster curing speed, lower energy consumption (cold press system), a significantly lower adhesive spread rate and zero formaldehyde emissions.

    For entry into the Australasian market, Purbond has successfully tested their adhesive line in accordance with joint interim Australian/New Zealand standard Timber - Bond Performance of Structural Adhesives. The product PURBOND HB S-LINE was classified as a Type I structural wood adhesive (can be used for the production of EWP's for end-use in service classes 1, 2 (indoor and under cover (protected from direct weathering) end-use respectively) and class 3 (exposed to direct weathering and high humidity fluctuations) in November 2007. Tests were undertaken at the Timber Engineering Centre, Monash University, the Otto-Graf Institute, MPA University Stuttgart D, and at NTI Treteknisk Oslo NO.

    In addition to the above testing certification, the adhesive has now also been classified by SCION Research as conforming to Type 1 structural wood adhesive based on performance and durability requirements to the current AS/NZS 4364:1996 standard, based on testing by the Otto-Graf Institute, MPA University Stuttgart, in accordance to the European Standard for Structural Timber, DIN EN 302.



    1.5 million cubic metre Forestry Tasmania wood deal

    Forestry Tasmania is reported this week as saying its wood supply contract for Gunns' proposed pulp mill is the most significant deal it has ever struck. The company has agreed to supply Gunns with 1.5 million cubic metres of plantation and native forest timber a year for 20 years and is expected to receive about AU$350 million over the life of the agreement.



    Higher wood chip prices negotiated for WA

    Plantation Pulpwood Exports, a 50:50 a joint venture woodchip marketing entity between ITC and Timbercorp Ltd have negotiated a record increase in the benchmark sale price of certified plantation grown hardwood woodchip with the Japanese. The increase of AU$18.00 per BDMT to AU$207.40 per bone dry metric tonne, free on board was the most significant price rise secured for Australian hardwood plantation woodchip in 25 years and the second consecutive annual increase in real terms. The price will apply to all certified plantation grown woodchip exports for 2008 from Albany, Australia.



    Kiwi & Aussie dollar reach 20 year highs this week

    As Kiwi exporters know, the weak US dollar has continued to bolster the New Zealand dollar. The NZ Dollar reached a 23 year post float high this week trading at around US81.5 cents mid week. This compares to around 78 cents just two weeks ago. Commentators are predicting times are expected to only get tougher for New Zealand's forestry, meat and manufacturing export sectors as US growth continues to slow. An unprecedented US85 cents later in the year is now forecast.

    For the Australian's, the Australian dollar has also sky-rocketed this week rising to a fresh 24 year high against the US currency after strong investment data undelined robust demand in the economy and has kept alive chances of more interest rise hikes.



    New DVD to attract new forest industry participants

    Attendees at the Austimber2008 conference in March in Australia will be among the first in the forest industry to have the opportunity to view and obtain copies of a brand new promotional DVD resource, designed to attract new participants to the forest industry and help address skills shortages.

    The DVD and associated materials have been produced by NAFI and A3P using Australian Government Funding from the Department of Education, Employment and Workplace Relations. The DVD is accompanied by other material which provides information for potential forest industry employees on who they can contact in their local area as a starting point towards joining the industry.

    The DVD offers a five minute preview version and a 15 minute feature on the forest, wood and paper industry. It uses modern filming techniques and a series of excellent case studies to highlight the forest industry and the long-term and meaningful career opportunities that on offer. Those interested in utilising the DVD in their local area can contact NAFI or A3P to pre-order a copy.



    Over NZ$7.5 million fines in NZ's biggest cartel case

    NZ's largest cartel case to date has resulted in further heavy penalties for companies and individuals involved in the cartel in the timber preservation industry. Three Nufarm companies, which operated the Fernz Timber Protection brand, have been fined a total of NZ$1.9 million for price-fixing and market sharing with competitor Koppers Arch. It is the Commerce Commission's largest cartel prosecution to date. The fines bring the total penalties handed down so far in both civil and criminal actions, to more than NZ$7.5 million.

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    First Kalin machine arrives in Australia

    The first Kalin machine to arrive down-under is an automatic straight knife grinder purchased by Australian Recycled Timber in Melbourne. They will be grinding carbide knife in cutter-heads up to 450 mm long. Australian Recycled Timber's Kalin Grinder SL - 500 is going to be on display at AUSTimber 2008 next week. Manager and designer at Kalin, Emil Deiss and Joaquim Araujo, head engineer, will be joining local representative, Greg Jacob, at the AUSTimber 2008 show. Greg Jacob has recently been promoting the new Kalin range of equipment through the Innovatek technology events that run for forest and wood product companies in Australia and New Zealand.



    New wood preservative gains EPA approval

     
    Viance LLC has announced United States Environmental Protection Agency (EPA) approval of EcoVance(TM) Preservative* - a non-metallic preservative for use in wood protection. Viance will first introduce EcoVance Preservative to its wood preservative line in its new Ecolife(TM) Stabilized Weather Resistant Wood.

    "Ecolife Wood with new EcoVance Preservative is an industry breakthrough that provides superior performance and environmental benefits compared to other types of treated wood," said Steve Ainscough, president of Viance. According to Alan Preston, Viance vice president of research and development, the patented EcoVance Preservative system offers long-lasting protection that significantly extends the service life of wood.

    "During more than 11 years of extreme field testing at our test sites throughout the world," Preston said, "the patented EcoVance Preservative system demonstrated outstanding long-term performance against rot, decay and termites. In addition, when incorporated in Ecolife Stabilized Weather Resistant Wood, it reduced cracking, warping and splitting caused by weathering."

    Viance conducted field tests in tropical locations, including Hilo, Hawaii and Tanegashima, Japan, as well as locations in North America, Colombia and Australia. EcoVance(TM) is Viance's brand name for 4,5-dichloro-2-n-octyl-4- isothiazolin-3-one (DCOIT), which is the active ingredient in the EcoVance Preservative system. EcoVance Preservative is approved and can be used for aboveground and in- ground wood applications such as decking, fencing and fence posts, rails, spindles, flooring, trellises, gazebos and wood shingles, millwork and joinery, trim and fascia, and sill plates.

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    Aracruz plans to build a new pulp mill before 2015

    Aracruz Celulose has announced that it is studying construction of a new pulp mill in Brazil to start up before 2015. We are considering some sites in different regions of the country to install a new pulp mill and expand our capacity to around 7 million tonnes/yr in 2015 in order to supply 25% of global hardwood pulp demand, Aracruz's CFO, Izaac Zaguri, said.

    Currently, Aracruz has two pulp mills in Brazil producing just under 3 million tonnes/yr of bleached eucalyptus kraft (BEK) pulp. It also has a 50% share in another mill which has a capacity of 1 million tonnes/yr of BEK pulp. The smaller of the two mills producing 450,000 tonne/yr BEK is expecting to get approval in March (start-up scheduled for 2010) to raise its capacity to 1.8 million tonnes/yr. Already the company has invested USD$227 million in land and forest acquisition. Source: RISI




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    ...and one to end the week on...one dark night

    This story happened a while ago in Dublin, and even though it sounds like an Alfred Hitchcock tale, its true!!!!!

    John Bradford, a Dublin University student, was on the side of the road hitchhiking on a very dark night and in the midst of a big storm. The night was rolling on and no car went by. The storm was so strong he could hardly see a few feet ahead of him. Suddenly, he saw a car slowly coming towards him and stopped. John, desperate for shelter and without thinking about it, got into the car and closed the door.. only to realize there was nobody behind the wheel and the engine wasn't on.

    The car started moving slowly. John looked at the road ahead and saw a curve approaching. Scared, he started to pray, begging for his life. Then, just before the car hit the curve, a hand appeared out of no where through the window and turned the wheel. John, paralyzed with terror, watched as the hand came through the window, but never touched or harmed him.

    Shortly thereafter John saw the lights of a pub appear down the road, so, gathering strength, he jumped out of the car and ran to it. Wet and out of breath, he rushed inside and started telling everybody about the horrible experience he had just had.

    A silence enveloped the pub when everybody realized he was crying and....wasn't drunk.

    Suddenly, the door opened, and two other people walked in from the dark and stormy night. They, like John, were also soaked and out of breath. Looking around, and seeing John Bradford sobbing at the bar, one said to the other...

    "Look Paddy.....there's that ******* idiot that got in the car while we were pushing it!!!!"



    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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