It's refreshing to see the Queensland Government this week releasing for consultation a longer term strategy for the forest products iundustry. It sets the way forward for the industry after the sale of Forestry Plantations Queensland (the sale process is covered in another story in this week's issue). The timber industry in Queensland includes in excess of 2,000 businesses, contributes around AU$4 billion annually to the Queensland economy, and directly employs around 18,000 people across regional Queensland. The strategy signals a fundamental change of role for the government. They're moving from direct ownership of timber plantations, to now one of leadership and direction-setting.
To add to this initiative, the Victorian Government has been developing a new Timber Industry Strategy to provide a framework and longer-term direction for the Victorian timber industry over the next 20 years. The Pulp and Paper Industry Strategy Group consisting of industry leaders and Government in Australia has also at the same time been working together to review the Australian Pulp and Paper industry, to grow this part of the sector and to identify strategies to overcome impediments and attract innovation and investment into P&P manufacturing. This report is due out now in mid December.
With the sale of most of the NZ Government's forestry assets in the early 1990's, you'd have to ask the question of the New Zealand's Ministry representing the forestry sector - what's happened in the intervening years? It's now been 20 years since the main asset sales. Where is any strategy for growing the industry? Like the Queensland and Victorian Government's, doesn't it or shouldn't it have a role in facilitating, coordinating and developing a strategy together with industry to attract new investment and to implement policies to support the growth of the NZ forest products industry? After all, the NZ forestry sector's contribution to GDP is around 3.8% and export earnings of forest products alone total around NZ$3.2 billion. A strategy to grow and improve the profitability of the NZ forestry sector sector you'd have to think would be on the radar.
Of course the other BIG news this week has been the Australian melt down over their ETS this week and the release of early programmes for the Future Forestry Finance 2010 conference series planned for early March next year.
How does post-recession forestry in Australasia stack up?
A conference series, Future Forestry Finance 2010 is being developed for finance industry leaders looking to develop their investment and loan risk strategies for forestry in Australasia. It's being developed with the financial and forestry community - throughout Australasia and further afield.
Already very strong interest in participating and presenting at this key forestry event in 2010 is being shown by Directors, CEOs, senior managers and account executives in the finance and corporate services industries that are focused on Australasia. Providers of accounting, investment and other business services, and leaders and senior managers in forestry enterprises on both sides of the Tasman are also registering their interest in this long overdue forum.
Some of the key note presenters have been announced in Friday Offcuts already. This week more detailed programmes for Sydney and Auckland have been loaded onto the website. Check out www.forestryfinanceevents.com for more information. Remember, the earlybird for registrations to this Forestry Finance Series FINISHES on Friday 18 December.. Additional information will be be brought to you as the final programme is set in place.
Australian forestry costs high internationally
In a presentation to ForestTECH 2009 Nick Roberts, CEO of Forests NSW gave a key-note address titled The Future for Forest Management in Australia. In it Nick provided detailed information on supply and demand, changes to forest ownership and prospects for further change as well as current and projected forestry and wood products in Australia. Some of the details and conclusions covered in the presentation include;
- Australia's costs are high by comparison with international benchmark countries which have large areas of plantations - Australia's costs are escalating faster than in international benchmark countries - the standard CPI adjustment on contractor rates needs to be questioned and tempered by productivity improvements - Australia's log prices have moved at similar rates to but are well below international benchmarks and are not moving as fast as its costs are escalating - Australian sawn timber prices are high by international benchmark - Australian forest managers need to become more commercial.
Some recent benchmarks for example (see table below) looking at forest management comparisons shows clearly how high current costs for the Australian industry are c.f. two main players in South America.
For those who missed the latest forest management technology updates in ForestTECH 2009, limited copies of the event proceedings can still be obtained from FIEA offices. For ordering of this reference, please click on the order form.
ACCC approves Gunns' ITC acquisition
The Australian Competition and Consumer Commission will not oppose the revised proposed acquisition of ITC Timber Pty Ltd by Gunns Limited after the ACCC's competition concerns were addressed with the exclusion of ITC Timber's 50 per cent stake in the SmartFibre wood chip joint venture from the transaction.
"On 25 November 2009, the ACCC announced its opposition to the proposed acquisition of ITC Timber by Gunns," ACCC chairman Graeme Samuel said. "The ACCC was concerned that the acquisition by Gunns of ITC Timber's 50 per cent stake in the SmartFibre wood chip joint venture would be likely to substantially lessen competition in the market for the acquisition of hardwood pulpwood in north-eastern Tasmania.
"To address the ACCC's competition concerns, the parties agreed to a new proposal whereby Gunns would not acquire ITC Timber's stake in SmartFibre. As a result of this restructure, SmartFibre will remain an independent competitor to Gunns in the acquisition of pulpwood and Tasmanian farmers and plantation owners will continue to receive competitive prices for the pulpwood they supply."
Competition in the market for the acquisition of residual timber in north-eastern Tasmania, which was identified as an issue that may raise competition concerns in the ACCC's Statement of Issues of 28 October 2009, will also be maintained as a result of the restructure.
Australian Emissions bill defeated
Australia's Senate has rejected laws to set up a carbon trade scheme on Wednesday, scuttling a key climate change policy of PM Kevin Rudd and setting a trigger for an early 2010 election. The scheme was defeated by 41 votes to 33. The rejection now throws the future of carbon trading into confusion, creating new uncertainty for business, which had sought clarity from the political debate.
For companies looking to make investment decisions it's just got a lot harder with no certainty about the laws and a carbon price. If an early election is called, maybe as early as March or April of next year, and Rudd is returned to power, the laws could be passed through a special joint sitting of both houses of Parliament.
For the Kiwis who have rushed through their ETS and who were looking to align with the Australian scheme, it looks now a whole lot murkier. Don Nicolson, President of Federated Farmers says "The fate of the Australian ETS is now up in the air and all pretence of alignment with New Zealands is gone with it".
"On 1 July 2010, every New Zealander and every New Zealand business will face increased costs that do not apply in Australia. Our ETS will erode our competitiveness relative to Australian exporters who won't face the same price pressures. While we've been obsessing over our "massive" 0.2 percent contribution to global emissions, in Australia, the focus has been on the A$120 billion cost of its ETS." More >>
A NZ Supreme Court ruling has given the go-ahead for the Commerce Commission to proceed with a claim against Carter Holt Harvey Ltd that could force the timber company owned by Graeme Hart's Rank Group forced to refund as many as 60,000 households.
The regulator claims CHH is liable for consumers and competitors who suffered a loss due to the forest products company selling timber below the grade claimed on the packaging. The action pre-dates Rank's 2006 CHH purchase.
The country's highest court overturned a previous Court of Appeal ruling that the Commission failed to file proceedings against CHH within the limitation period allowed by the Fair Trading Act. More >>
NZ Forest and Wood Industry Census results out
During the second half of 2009 FITEC completed a survey of the NZ forestry and wood manufacturing sectors (excluding biosecurity and furniture). This was the most comprehensive survey carried out to date on the forest products industry in New Zealand.
Some 831 companies were identified and surveyed. Anecdotal evidence has suggested that employee numbers have dropped in recent years and this is certainly confirmed within the wood manufacturing sector which had contracted by an average of 10% (approx 1200 employees) from previous forecasts. Forestry figures are more variable compared to previous statistics, probably reflecting the contracting nature of the business and the inherent fluctuations.
The industry employs a total of 18,730 staff; 37% of whom work in the forestry sector and 63% in the wood manufacturing sector. The vast majority of employees are found in harvesting and silviculture (76% of forestry employees) and in solid wood processing and remanufacturing (66% of wood manufacturing employees).
Regionally the workforce is concentrated in the CNI (38%), which has the largest plantation forest area and woodflow with the clustering of large processing facilities in Tokoroa, Rotorua and Kawerau being a significant factor. The Southern North Island (10%), Nelson - Marlborough (10%), Northland (9%), and Otago - Southland (8%) are the other main regions of employment, generally reflecting the maturity of the industry in those regions.
For a full summary of the research, click on the attached pdf.
Hitman Scientist Gains Royal Recognition
IRL Research Engineer Paul Harris has been awarded the Royal Society of New Zealand R.J. Scott medal for his significant contributions to the development and application of electronic devices in New Zealand.
The Royal Society said Paul Harris had made a number of significant contributions to the development and application of electronic devices in New Zealand. He had led the development of a novel teeth imaging system, a high resolution 3-D ultrasonic device for imaging bone and Hitman - a sonic hand-held device for wood quality testing in the forest. His research directly resulted in the establishment of three companies that manufacture equipment invented by him, with substantial economic benefit for New Zealand.
IRL Chief Executive Shaun Coffey said the award recognises Paul Harris' significant achievements over many years. "He is an inspiration to the team of colleagues who work closely with him and is dedicated to the practical application of science and engineering. Time and time again Paul Harris has showed that he understands the needs of industry and has been able to focus his talents to ensure they realise significant economic benefit for New Zealand," he said.
Forestry asset sale for Queensland started
The Queensland government's $15 billion privatisation plan has started with Treasurer Andrew Fraser telling Parliament on Thursday last week that the formal sale process for Forestry Plantations Queensland (FPQ) had been set in motion. Mr Fraser said the government was not selling the crown plantation land on which the business is located - only the rights to manage, harvest and replant the plantation timber.
Non-binding bids have been invited by late January, followed by due diligence and binding bids by March and a final contract by June 2010. Mr Fraser said he expected FPQ would attract "significant market interest" from long-term investors such as superannuation funds. Timber Queensland chief executive Rod McInnes said he believed FPQ was worth at least AU$500 million. The long-term harvest for FPQ is estimated at two million cubic metres a year.
Norske Skog Albury creates 1st Energy Savings Certificate
Norske Skog has created the first Energy Savings Certificate (ESC) under the NSW Government's Energy Saving Scheme. The ESC was created from electricity reductions achieved at the Norske Skog Albury paper mill. This was achieved through the installation of bypass piping that allows the direct movement of paper pulp between production processes.
At a ceremony in Sydney on 20 November 2009, Norske Skog transferred the very first ESC to IPART who will retain it on behalf of the people of New South Wales. Norske Skog's achievement demonstrates the paper industry's ability to innovate to achieve improved environmental performance. However, A3P member companies continue to be concerned about the complexity and duplication flowing from the plethora of State and Commonwealth Government initiatives dealing with greenhouse gas emissions reduction and energy efficiency. Source: A3P Canopy
Queensland timber plantation 2020 strategy released
The Queensland Government this week released for consultation the Queensland Timber Plantation Strategy 2020 which sets out the way forward for the industry post the sale of Forestry Plantations Queensland (FPQ).
Minister for Primary Industries, Fisheries and Rural and Regional Queensland Tim Mulherin said the strategy signals a fundamental change of role for the government from direct ownership of timber plantations, to one of leadership and direction-setting.
The strategy features five key planks:
- improved land-use planning framework for timber plantations - supportive legislative and policy frameworks - facilitating new investment in timber plantations - targeted industry development support - strengthening community support for timber plantations.
"There are inconsistent planning and assessment processes across Queensland, with disproportionate levels of assessment being adopted. These inconsistencies have generated uncertainty for potential investors". The strategy is available at www.dpi.qld.gov.au More >>
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NZ perceived as least corrupt nation to do business
People perceive New Zealand to be the least corrupt nation in which to do business, and Somalia the most, according to a new report. Denmark, Singapore, Sweden and Switzerland round out the top five and Australia came in at eighth equal.
The rankings reflect political stability, long-established conflict of interest regulations and solid, functioning public institutions, according to Transparency Internationals 2009 Corruption Perceptions Index, which measures corruption perceived by the public sector.
The United States ranked 19th, below the United Kingdom (17th) and Canada (8th) but ahead of France (24th), Italy (63rd) and Mexico (89th), according to the report. The vast majority of the 180 countries measured scored below five on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption).
The rise and rise of the Asian economies
So, exactly when does India and China catch up to the average per capita earnings of citizens from the US and UK. Check out this link for a very entertaining and informative presentation. Hear about what projections are being given to comparable earnings between the established and new economic powerhouses in the global economy.
...and one to end the week on...sleeping at your desk
FIVE BEST THINGS TO SAY IF YOU GET CAUGHT SLEEPING AT YOUR DESK:
5. "They told me at the Blood Bank this might happen."
4. "This is just a 15 minute power nap they raved about in the time management course you sent me to."
3. "Whew! Guess I left the top off the Whiteout. You probably got here just in time.
2. "Did you ever notice sound coming out of these keyboards when you put your ear down real close?"
And the NUMBER ONE best thing to say if you get caught sleeping at your desk...
1. Raise your head slowly and say, "...in Jesus' name, Amen."
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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