Friday Offcuts 5 April 2012
For technology updates, Wood Preservation 2012 is generating significant interest amongst wood producing companies on both sides of the Tasman just at the moment. The last independent programme like this was last run three years ago. It’s providing those involved in wood treatment – or those looking at alternate treatment or wood modification technologies – the opportunity to learn about international developments, innovations and some of the latest trends relating to wood treatment coming out of Europe, North America and Australasia. Remember the early-bird registration for this mid-May technology series finish next Friday.
We have news on updates on two forest products standards. Comments are currently being sought on the Australian Standard for Sustainable Forest Management and an amendment to the NZ Standard on Chemical Preservation of Round and Sawn Timber. Links to both Standard’s updates are supplied in stories below.
For those who are following the unfolding Sino-Forest story, news came out this week that the embattled company is looking at restructuring and selling its assets. Linked to this is the potential for 11,000 hectares of Northland forestry, Mangakahia forest that could, according to media reports this week, be caught up in the sale process. In response to the Sino-Forest announcement, Greenheart, a subsidiary of Sino-Forest said it was too early to speculate on the outcome of the Sino-Forest sale or it’s restructure.
Finally, news on the unfolding Gunns story. The company this week has asked that its shares remain suspended from trading on the Australian Securities Exchange while it continues to work on its AU$400 million equity raising proposal. The company is expected to provide a further update to the market on 10 April 2012.
This week we have for you:
Brazil's Amazon forest now in Street ViewMost people don't ever get the chance to float down the Amazon River or walk through the surrounding forest and visit local communities. And for those who do, many parts of the area can't be visited because they are under the Brazilian government's protection with restricted public access.
Now, Google is making it possible for armchair explorers to experience the Amazon through its Google Maps' Street View feature. The Web giant announced on World Forest Day, that all of the images it has collected over the past several months of the Amazon's Rio Negro Reserve are now available.
"Take a virtual boat ride down the main section of the Rio Negro, and float up into the smaller tributaries where the forest is flooded," project lead for Google Street View in the Amazon Karin Tuxen-Bettman wrote in a statement. "Stroll along the paths of Tumbira, the largest community in the Reserve... Enjoy a hike through along an Amazon forest trail and see where Brazil nuts are harvested."
The project got started a year ago when the Amazonas Sustainable Foundation partnered with Google and invited the tech company to visit the area. A handful of the company's employees traveled to the Amazon basin and began collecting ground-level images of the rivers, forest, and communities in the Rio Negro Reserve.
Sino-Forest suing for fraud claimsChinese timberland company Sino-Forest Corp., which is being investigated for fraud, said that it is filing for bankruptcy protection, putting itself up for sale and filing a lawsuit against the research firm that accused the company of exaggerating its timber holdings in China.
Sino-Forest said it will implement a restructuring plan if the company doesn’t receive a suitable takeover offer. “We believe the full value of our assets will only be achieved if we are able to continue operating the business, and repair and preserve relationships with our customers and suppliers,” Sino-Forest chief executive and vice chairman Judson Martin said in a statement.
Sino-Forest was once Canada’s most valuable publicly traded forestry business, but shares plunged last year after short-seller Muddy Waters Research alleged that the company exaggerated its assets. Securities regulators in Canada suspended trading in the shares on the Toronto Stock Exchange. The company is under investigation by Canada’s national police force.
Sino-Forest’s shareholders in Canada and the U.S. have also sued, alleging fraud at the company. Sino-Forest said last Friday that it is pursuing a lawsuit against Muddy Waters Research and its research director Carson Block, as well as others who have accused the company of fraud.
The company accused Muddy Waters and Block of making defamatory statements and is seeking $4 billion and the recovery of profits made by the short seller and others. For recent media releases from the company, click here
On Monday, Singapore-based Richard Chandler Corp, the largest shareholder in Sino-Forest Corp, said that it has proposed a restructuring plan for the forestry company. The investment group said it has assembled a team led by an Asian forestry expert to oversee its proposal for the Toronto-listed company, whose stock dived last year after a short-seller accused it of exaggerating its assets. "Over recent months Sino-Forest's business and financial resources have continued to deteriorate in the absence of a credible business plan which addresses the significant governance, leadership, strategic, operational and financial challenges facing the company," Richard Chandler Corp said in a statement.
The link to a New Zealand forest in Northland that could be tied up in any asset sale can be read here and Greenheart's response is covered in another story in this week's issue.
Australian Paper updates future fibre strategyAustralian Paper has announced a detailed Feasibility Study into the development of a major recycling plant at its Maryvale Mill, and increased access to plantation wood as an update to its 2011 Future Fibre Strategy.
CEO Mr Jim Henneberry said as Australia’s only manufacturer of recycled office and printing paper, Australian Paper had a commitment to employing local workers and using local resources to sustainably produce paper at world’s best standards. “Currently our recycled fibre is sourced from a Victorian supplier, but due to the pending closure of that plant we are conducting a Feasibility Study for a large recycled pulp facility at our Maryvale Mill,” Mr Henneberry said.
Mr Henneberry said if the company proceeded, this investment would significantly increase the volume of premium recycled paper made in Australia. “Our study will look at all aspects of demand and production and will be completed by August.”
This Feasibility Study is part of the company’s Future Fibre Strategy, announced last year after extensive consultation with a wide range of stakeholders. Australian Paper’s Future Fibre Strategy includes increasing the amount of plantation and recycled fibre used by the company as well as sourcing wood from sustainable, certified sources including VicForests.
Mr Henneberry said the company has also made significant progress in its plans to increase the use of plantation fibre. Currently almost two thirds of Australian Paper’s needs are met from plantations and recycled waste. “After extensive trials, we have been able to increase our plantation supply yields and have already begun to take significant additional volumes from a new Victorian supplier. We are also looking carefully at the creation of new plantations close to our Maryvale Mill.”
For further information on Australian Paper’s Future Fibre Strategy and local paper manufacturing please go to www.onpaper.com.au .
Australian forest products sector under some pressure
Australia has had an increasing rate of softwood lumber imports: from 600,000 m3 in 2006–07 and 2008–09 (when the domestic market was stronger), and more recently to 847,000 m3 in 2010–11 when the overall market was weaker. Europe and New Zealand each represent about one-third of total imports. However, European volumes have been increasing steadily, while New Zealand’s are flat to declining — at a time when there has been a housing slowdown.
In late 2011, The Australian Customs and Border Protection Service launched an anti-dumping investigation against softwood lumber imports from Germany, Austria, the Czech Republic, Estonia, Lithuania, Sweden, Canada and the U.S. The preliminary ruling has shown no evidence of any dumping and has terminated its investigation.
As WOOD MARKETS has reported over the years, Australia has had the highest structural lumber prices in the world since the late 1990s; this has attracted strategic exporters. More recently, Australian sawmills have had to overcome a significant currency disadvantage as the Australian dollar has soared against the U.S. dollar and the euro. This has made exports to Australia more attractive than shipping to regions facing low prices and flat markets.
This has worked against Australian sawmills, as typical sawmills tend to have some of the highest sawmilling costs in the world (as reported in our Global Timber/Sawmill/Lumber Cost Benchmarking Report). In combination with rising log prices (due to export markets in China) and weak domestic demand, sawmills in Australia are seeing their margins squeezed against a tide of rising costs and imports. A similar situation is occurring in plywood and mouldings as Chilean imports become more common.
The Australian softwood timber harvest was 9.5 million m3 in 2010–11. It is forecast to reach 12 million m3 by 2030 and then remain relatively flat to 2050. Softwood log exports rose to 1.8 million m3 in 2011 as domestic demand weakened, with 1.5 million m3 going to China.
However, limited gains are expected from Australia’s domestic forests over the next few decades, and this will require the country to import significantly higher lumber and panel volumes to meet demand. Imported lumber is anticipated to grow from almost one million m3 in 2011 to 1.5 million m3 by 2030 and two million m3 by 2050. Domestic softwood lumber production is forecast to rise from four million m3 in 2011 to 4.5 million m3 in 2030, and then hold at that level to 2050 as the timber supply remains constrained.
Source: International Wood Markets Group, www.woodmarkets.com
New Zealand Log Prices March 2012Export log prices have eased again this month, $3-$5 across all grades, as expected. At least this time the price easing was predicted last month so most would be prepared for it, and most are expecting another lowering of the price next month. The writing has been on the wall for the past couple of months that this would happen. The price shift was needed to better align volumes with market sentiment, a small adjustment. However, adding to the pain is that shipping rates are on the way up and the NZ dollar won’t budge against the US.
There is some glimpse of hope on the horizon with PNW exports expected to reduce through this year and domestic demand, while still quiet, is seeing some demand finally coming from the Christchurch rebuild.
The CFR log price in China is still under downward pressure due to very large port inventories, 4 million + m³ equating to some 70-80 day’s supply at current off-take levels. This is causing Chinese customers to be less aggressive around volume and price than they have been in 2010/11 due to the high levels of inventory. Forecasts of lower GDP growth, in China, at some 7.5% versus 9-10% levels in 2010/11 have unsettled some market commentators.
The Chinese market needs less wood and/or higher levels of consumption – and hopes are that consumption will continue to increase post Lunar New Year and that lower levels of log supply ex the USA and lumber exports ex-Canada will provide a correction over the next 2-3 months. There is still demand from China for NZ logs. Overall NZ log export prices have eased slightly in March, while domestic log prices have gained a little on the previous month.
The Agrifax log price indicator went a little lower again this month as overall log prices, export and domestic, went down or remained very flat. Export log prices lost US$3-5/JASm³ for in-market prices. This was expected the month before and it is predicted by most involved in the industry that prices will follow a similar drop next month. This is mostly due to subdued activity in China seeing buyers unwilling to pay higher prices. There is still demand for logs, just not at a higher price. Once inventory levels get down in China there could be an improvement in prices. However, while there are still logs going into China inventories will remain steady.
The Agrifax log price data is a weighted average of prices collected each month from a range of New Zealand log buyers and sellers. Log prices shown in the table will vary regionally and by supplier and should only be used to provide a broad trend of log price movements.
AUSTimber 2012 draws in harvesting crowdsThe AUSTimber 2012 Expo promised to be bigger and better than the inaugural event of 2008. It was. This time it was located on a single location in the forest, only 15kms from Mt Gambier and was able to feature both softwood and hardwood harvesting, as well as residue management, biofuel production, establishment techniques and silvicultural practices.
The real emphasis of the Expo though was on the in-forest demonstrations where active demonstrations of machinery were going all day over the Friday and Saturday of last week. The pine plantations, planted in 1975 and 1985 were being felled as part of the expo and the hardwood plantations, established in 2001, showcased both cut to length pulp wood production as well as tree-length felling and skidding for in-field chipping.
Organisers immediately after the event think they got around 5000 people through the gates over the two days. Attached is a slide show of some of the Expo action seen at the show.
Greenheart in Northland - business as usualAbout 11,000 hectares of Northland forestry may be end up on the block as Sino-Forest, which owns the block through a Hong Kong investment vehicle, seeks a buyer for its assets after filing for bankruptcy protection last week. Last year, Sino-Forest sold Mangakahia Forest to its part-owned subsidiary Greenheart Group for US$77 million. Greenheart also owns forestry assets in Suriname.
In response to the Sino-Forest announcement, Greenheart said it was too early to speculate on the outcome of the Sino-Forest sale or restructure. In an exclusive statement to Friday Offcuts and WoodWeek, management at Greenheart responded by quashing sale rumours. Greenheart's Vice President, David Wu, said "Greenheart is not aware of any intentions to sell its Mangakahia Forest, which is managed by Greenheart’s own operational management team consisting of Andy Fyfe, Tony Wood and Craig Penfold. Greenheart has a long term strategy in New Zealand and operations are on-going as usual."
The New Zealand assets drove up Greenheart’s annual revenue of HK$327 million in the 2011 calendar year, compared to HK$17 million a year earlier, though its loss widened to HK$105.9 million from HK$86.6 million, according to financial statements lodged last week. The New Zealand segment revenue accounted for about HK$300.7 million, with most of the timber sold into China.
NZS 3640:2003, Wood Preservation Standards AmendmentsStandards New Zealand has just issued for public comment Amendment 5 to NZS 3640:2003, Chemical Preservation of Round and Sawn Timber. Comments on the draft amendment should be sent to Craig Watkin, Project Administrator, Standards New Zealand email@example.com with comments closing on Wednesday 9 May 2012.
Click here to download the draft standard and to make comments and click hereto be taken directly to the draft for public comment.
Changes and amendments to Wood Preservation standards and implications for local wood treatment operations will also be an integral part of the three yearly Wood Preservation 2012 technology series planned for both New Zealand and Australian operations in mid-May. Full details on this series can be found on the event website, www.woodpreservationevents.com
Promoting the benefits of reading on paper
“We’ve seen studies that show whether you’re an executive or a millennial, people prefer to read on paper, and it’s faster to read on paper,” said Lewis Fix, Domtar’s Vice-President of Sustainable Business and Brand Management. “Whether you are learning or sharing important information, there are good reasons to make sure people still read the material on paper.”
The Domtar ad – part of its award-winning PAPERbecause campaign – ran in Newsweek’s 19 March issue. It showed a boy dressed as a superhero and reading a comic book, while his mother proudly watches. The message: while entertainment options may have changed, people still enjoy reading on paper.
“A lot has changed since the 1960s, but we wanted to use this retro theme to make a serious point,” Fix said. “There are several studies that prove there’s a value in reading on paper that helps people learn and communicate.”
To read more on this initiative, click here
Building activity updateUS building activity: US building activity looks to be in much better shape than a year ago, with approvals up 34% year-on-year and up 5% in February on the previous month. Housing approvals in the US have been increasing now for five months in a row, signaling some improvements in the economy.
Australian building activity: Building activity in Australia was down year-on-year in January, although up slightly on the previous month. Despite the perceived strong Australian economy housing approvals have been steadily dropping for a number of months.
New Zealand building activity: New Zealand’s building activity is up on year ago figures by 12% but back on the previous month in January.
Japanese building activity: Japanese wooden building activity remains sluggish, back 2% on a year ago in January and down 14% on a month earlier. Japanese wooden building activity is measured in area, square metres.
Source: NZX Agrifax, www.nzxagri.com/agrifax
Composite manufacturers roll out new deckingManufacturers of composite deck boards are increasingly introducing an array of new products or expanding and improving old ones. Below are a number of options and developments available to North American consumers profiled in a recent building products newsletter. These and other alternatives to treated wood decking and other outdoor products will be covered in more detail at the upcoming Wood Preservation 2012 technology series running for New Zealand and Australian companies in mid-May.
“Advanced Environmental Technologies Inc. has just introduced NanoShield, the first composite deck board to incorporate nanotechnology. The process bonds inorganic nanoparticles to treated wood particles to form a durable shell of similar composition.
"We believe nanotechnology will be one of the next technology leaders for this industry," says chairman and CEO Joe Brooks. "AERT's NanoShield board will represent a game-changing product with unmatched performance and characteristics." Brent Gwatney, vice president of sales and marketing for AERT's MoistureShield brand, says that NanoShield will be a "high-end product that will look more like wood. It will be something to compete with cellular PVC and capstock composites."
Tamko Building Products plans to introduce a new compression-molded deck board that is capped on three sides. The new product will be produced using Tamko's compression-molding manufacturing process-already used for the company's EverGrain composite decking-which experts say gives boards a deeper grain and texture than composite boards that are injection-molded.
Armadillo Deck is the latest offering from Master Mark Plastics, which also produces Rhino Deck. The composite boards are made from a proprietary mix of wood pulp and recycled, high-density polyethylene plastics then fully wrapped with a tough polyethylene coating to resist fading, weathering, scratching, stains, and mildew.
Trex, Winchester, Va., recently introduced Enhance composite decking, which is positioned between its Transcend and Accents lines. Like Transcend, Enhance has a three-sided shell that protects against staining, fading, mould, rot, cracks and splinters. Available in two colours-clam shell and beach dune-it's manufactured from 95% recycled content, including reclaimed wood, sawdust and plastic bags.
TimberTech, Wilmington, Oh., has added three new colours-brick, slate and brownstone-to its new Earthwood Evolutions collection. Featuring proprietary HydroLock technology, the line is the company's first fully capped composite decking product, with a flat-grain surface that doesn't trap dirt and a consistent variegated colour for the look of hardwood.
Universal Consumer Products, Grand Rapids, Mi., is unveiling the next generation of co-extruded composite decking under its Latitudes Capricorn and Captiva brands. The new product has a more natural looking, realistic grain pattern that is resistant to scratches, stains and fading.
ProTekt capped composite deck boards from Fiberon, New London, N.C., are now offered in four colors: two solids, canyon brown, and harbor gray, and two multi-chromatics, chestnut and gray birch. Each board has a rigid core that is encased on three sides with a patent-pending, non-organic surface material that is resistant to staining, fading, scratches, and mould.
Natures Composites, Torrington, Wy., mixes recycled milk jugs with wheat straw cellulose to produce TerraDeck composite decking in three grades: standard, premium, and ultimate. All three contain 94% recycled content and 6% non-toxic adhesive. Current vice president Heath Van Eaton founded the company and developed the products, which recently received building certification from ICC Evaluation Services, a subsidiary of the International Code Council.”
Draft Australian Standard available for commentThe Australian Standard for Sustainable Forest Management is due for its five yearly review. Consistent with Standards Australia processes a Standard Review Committee (SRC) has been formed chaired by Dr Paul Biggs. That SRC has developed a draft revised standard that is ready to be reviewed by the public. The first of two public comment periods commenced on 19 March 2012.
The Committee is keen to get a broad range of feedback from all of the stakeholders in good forestry practices and in using sustainable forest products in Australia. To access the draft revised standard and the Stakeholder Feedback Form click here
Trader has high hopes for new carbon platformOMFinancial in New Zealand has just launched an online carbon platform which it says has the potential to become a regional market. Commtrade Carbon has been trading quietly since late last year, but is officially open from last Friday.
The platform operates from 7am to 10am daily, and trades can be settled directly, over-the-counter or escrow. Buyers and sellers can trade instantly, and have access to up-to-date market information. The platform trades a range of units, including spot and forward NZUs, CERs and ERUs, and can be adjusted to include other credits.
OMFinancial’s head of carbon and energy, Nigel Brunel, says that Commtrade is a logical market development for the company that brokered New Zealand’s first carbon trade, in March 2009. “Since then we’ve done more than 700 deals, involving more than 12 million tonnes of carbon,” he told Carbon News. “This allows registered buyers and sellers to deal with each other quickly and directly.”
Source: 2012 Carbon News
Canadian Budget delivers for forestryAn investment of $105 million over two years for market development and forestry innovation, including support for FPInnovations, was confirmed in Canada’s 2012 federal budget. FPInnovations, a unique industry/government forestry innovation partnership, and the Forest Products Association of Canada both commended the Canadian government’s recommitment to Canadian forest sector transformation and innovation.
The Forest Products Association of Canada (FPAC) is pleased that the Government of Canada has decided to maintain spending on programs aimed at transforming the forest sector even while tough measures are being taken to tackle the deficit.
“Today's budget will allow us to continue to pioneer new products such as bio-materials and bio-composites and next generation building systems for multi-storey buildings," said Pierre Lapointe, president and CEO of FPInnovations.
Buy and Sell
...and one to end the week on...clever use of words
As many of those who love the outdoors will be heading out into the hills this weekend to chase deer for the roar, you've got to love the picture on the right sent in by a reader. Remember, if out there, be careful.
And on that note, have a great Easter. Enjoy the break.
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