Friday Offcuts – 15 January 2010
In Australia, Gunns as anticipated was successful over the break in gaining control of all nine Great Southern pulpwood schemes after investor-growers approved the transfer at meetings on 23 December 2009 and again on 4 January 2010. Gunns' takeover of responsibility has increased its holding of plantation timber from 200,000 hectares to about 330,000ha. As a consequence, the company has been able to confirm that its proposed pulp mill at Bell Bay in Tasmania will be able to use 100 per cent plantation timber (the company previously planned to use about 60% plantation and 40% native forest for the first five years) from the mill's start-up. In the lead story this week we've detailed forest products technology programmes that are planned for Australasia this year. Note that because of the extended break over the Xmas period and registrations that are still flowing in this week for the first major event for 2010, Future Forestry Finance 2010 scheduled for early March (see www.forestryfinanceevents.com), the organisers have extended the discounts available through earlybird registrations until Friday 22 January. Finally, we're looking forward to working with all of you again this year. We'll be ensuring through the information and features being added that Offcuts remains your "first choice for wood news". Remember though, the success of the newsletter is dependent on your regular input. We look forward to receiving throughout the year your articles, leads, suggestions and contributions to the last story each week. Subscribe a friend
This week we have for you:
2010 forest products technology calendar
- Future Forestry Finance 2010 1-2 March 2010, Sydney, Australia 4-5 March 2010, Auckland, New Zealand www.forestryfinanceevents.com Note: EARLY BIRD DEADLINE HAS BEEN EXTENDED UNTIL FRIDAY 22nd JANUARY - Wood Supply Chain Optimisation 2010 Forest to Market - Innovations to Improve Logistics & Operations 19-20 May 2010, Melbourne, Australia 24-25 May 2010, Rotorua, New Zealand www.woodsupplychain.com - Wood Energy 2010 Reducing Energy Costs & Improving Energy Efficiencies 21-22 July 2010, Rotorua, New Zealand 26-27 July 2010, Melbourne, Australia - Wood Manufacturing 2010 Profitable Wood Manufacturing - Tooling, Technology & Design 15-16 September 2010, Melbourne, Australia 20-21 September 2010, Rotorua, New Zealand - ForestTECH 2010 Tools and Technologies to Improve Forest Planning & Operations 17-19 November 2010, Rotorua, New Zealand 22-24 November 2010, Albury, NSW, Australia www.foresttechevents.com Further details on each of the events can be found on the attached pdf. More information on each of the technology programmes will be given as we move forward to each series. For those interested in presenting or being involved in the managed exhibitions, please contact our FIEA offices.
$167 million investment in NZ forest estate
Matariki Forests has announced that it has signed an agreement with Phaunos Timber Fund Limited for a NZD 167 million investment in the Matariki Forestry Group, subject to New Zealand's Overseas Investment Office approval. Matariki Forests is owned by a consortium and managed by Rayonier New Zealand, a subsidiary of Rayonier Inc.
100% plantation timber for Gunns new pulp mill
The Gunns Limited Bell Bay Pulp Mill will begin operation with 100 per cent plantation timber, following Gunns securing access to the Great Southern timber resource. Gunns Chairman John Gay said the appointment of Gunns as Responsible Entity for nine former Great Southern timber managed investment schemes gave the Company the security of supply it needed.
Gunns wins Great Southern schemes
Gunns, which was recently outbid for the failed Timbercorp forestry assets, welcomed the result of the transactions. "The inclusion of the Great Southern plantations into the Gunns managed estate is a significant development in the board's objective of transitioning to a plantation-based business" the company said. Receivers McGrath Nicol is still in the process of finding buyers for real estate and woodchip mills owned by Great Southern.
Australian programme funding now extended to forestry
Under Round 2 of the Promoting Australian Produce (PAP) programme are now open. Under the programme, matched-funding grants of between $50,000 and $750,000 are available to help food, agriculture and seafood industry organisations build their capacity to better market and promote their produce, by undertaking projects that will:
Energy price increases predicted in Australia this year
The AER's Queensland and South Australian draft decisions imply increases as high as 30% in Queensland and 13% in South Australia during 2010. The Victorian electricity distributors have proposed significant price increases with the highest being close to 50% on 1st January 2011. This will obviously have an impact on the wood processing industry, as paper and wood panel manufacturing are significant energy users. Source: A3P Canopy
New lighting being trialled by port to beat pests
Scientists at Crown Research Institute Scion are pleased to be using the Mt Maunganui site to trial the new lighting system, which is designed to be less attractive to insects. Project leader Dr Steve Pawson says that the lights normally used by the port attract millions of insects every night, whereas certain wavelengths of light in the yellow spectrum are the opposite for some insects - completely unattractive. "For a busy port like Tauranga, being able to operate at night is essential but, as most people know from their own homes, standard light bulbs are highly attractive to insects. Unfortunately, the bright lights are like a 'smorgasboard open' sign to insects such as the burnt pine longhorn beetle who could end up booking themselves a free trip on forest product exports," Steve explains. The trial, beginning in January and running for six weeks, aims to identify which type of yellow light is most effective in deterring insects, thereby reducing insect contamination and the need for fumigation. Hundreds of millions of dollars worth of sawn timber and logs are shipped from the Port of Tauranga each year. Pest contamination can result in the loss of export markets so forest products are typically treated with methyl bromide to meet strict quarantine controls. "If New Zealand is going to reduce methyl bromide and other chemical use, we have to start by reducing pest populations at processing sites, which involves taking completely new approaches to pest control," Steve says.
Russian Government postpones again log export duties
Decree number 1071 of the Russian government was signed by Prime Minister Vladimir Putin on 23 December, postpones the increase of round wood export duties once again by one year until 2011. The Decree is valid from the January 1, 2010, as reported by the Nordic Paper Journal. The export duty for wood will remain at the previous level, which means an export duty for softwood in 2010 of 25%, but not less than Euro 15 per cubic metre. From the beginning of 2011 the duty for softwood will be 80%, but not less than Euro 50 per cubic metre.
U.S. Moulding Market - better forecasts for 2010
Given the magnitude of the collapse in housing starts and residential remodeling, producers simply could not reduce their capacity fast enough to prevent prices from falling to below break-even for extended periods in 2008/2009. Along with this evaporating demand, moulding producers were also the victims of extremely volatile economic externalities - namely, dramatic swings in exchange rates and ocean freight rates. Currency Volatility After seeing the value/buying power of the U.S. dollar improve by 25% - 50% against major pine lumber and moulding supplying countries in the latter half of 2008, offshore suppliers lost nearly all of their gains in 2009. (The most extreme case was New Zealand, which saw its dollar's buying power weaken by 50% (good news when selling in U.S. dollars), but then strengthen by 40% in 2009 (bad news). Ocean Freight Volatility Importers started 2009 with rates appreciably lower than at the beginning of 2008. Sources indicate that from the high in 2008 to the low in 2009, container rates to the U.S. were cut nearly in half. However, rates are once more trending up due to rising global freight traffic and bunker fuel costs. Rates are now approximately the same as they were prior to taking off in 2007. Impact on Supply U.S. moulding output has been in decline since 2005 due to the onslaught of imported finger-joint and MDF mouldings. With U.S. producers having absorbed significant consolidation prior to 2007, most capacity reductions since then have originated with offshore producers. Since reaching a peak in 2006 of 1.3 billion lineal metres, imported softwood mouldings are projected to have contracted to 570 million lineal metres in 2009, a net reduction of 62% . Despite Chile and Brazil taking the greatest volume hit, they, along with minor volumes from Argentina and other South American countries, continue to account for roughly 85% of imports. The majority of imported softwood mouldings are finger-joint; since finger-joint moulding consumption is linked closely to usage by builders, it is likely offshore finger-joint producers will enjoy strong volume and price gains once the recovery in the housing market takes hold. Market Trends Limiting the growth in finger-joint will be MDF mouldings that offer affordable and convenient options for do-it-yourself and do-it-for-me consumers. With fashion trends expected to keep favouring paint-grade mouldings (finger-joint or MDF), solid lineal and polymer-based mouldings are likely to remain premium, niche products. OutlookLooking out to 2010, our demand forecast calls for housing starts, and repair and remodeling usage, to show positive growth; this should translate into a 5% increase in total moulding demand and a 10% increase in the average annual price of finger-joint mouldings. However, due to the reluctance of companies to risk cash flow on rebuilding depleted inventories, we anticipate periodic shortages and erratic price volatility. Market-share battles will remain intense through 2010, with domestic producers benefiting from their timely delivery times and offshore producers competing on their advantage in scale/integration back to the forest. Source: International Wood Markets Group, www.woodmarkets.com
National Exotic Forest Description data released
The NZ Ministry of Agriculture and Forestry has made public the provisional data from its A National Exotic Forest Description (NEFD) report on its website.
Oberon timber mill sale gets the nod
Australia's competition watchdog, the ACCC, has cleared the way for the sale of an Oberon timber mill in Central West New South Wales in Australia. Borg Manufacturing is seeking to buy the Oberon facility and other associated assets owned by Carter Holt Harvey Woodproducts Australia. The plant manufactures medium density fibreboard. Borg makes decorative panels and components used to build kitchens, laundries and furniture.
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...and one to end the week on...hunting flies
Sheila walked into the kitchen to find Bruce stalking around with a fly swatter. And on that note, have a great weekend. Cheers. 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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