Friday Offcuts – 16 December 2011
Click to Subscribe - It's FREE! In the lead up to Xmas we’ve had two major announcements out of Australia in just as many weeks. Last week we covered a story on the sale of Willmott’s forestry plantation assets to an international forestry investment fund managed by Global Forest Partners.This week, Sydney based company New Forests have announced that they’ve bought the forestry rights to 46,000 hectares of northern Tasmanian softwood plantation forests - more than half of the State’s entire softwood plantations - from Forestry Tasmania and its joint venture partner GMO Renewable Resources for AU$156 million. The sale, which is expected to be finalised early next month, is subject to Foreign Investment Review Board approval. It’s been touted as a deal which is going to enable Forestry Tasmania to significantly reduce its AU$40 million debt. With the high Australian dollar and declining global markets last year, FT reported a loss of AU$12 million. It’s also going to put it in a much better position to face the challenges associated with the re-structuring of Tasmania’s forest industry. There were plenty of challenges also facing those involved in Durban last week at the UN Climate Change negotiations. Their task was to reach a binding international agreement that was going to tackle climate change - an ambitious task considering the stance taken by many of the Governments represented in the discussions. It appears the New Zealand and Australian negotiating teams were working closely together - on the back of announcements last week of both countries exploring how best to link the two ETS’s once Australia switches to a trading scheme in 2015. Details on the agreement hammered out in the very last hours of negotiations and outcomes for this part of the world are detailed in a story below. Finally, there will be a number of you who will be taking off early for your Xmas break. However, for the rest of you - there will be one more issue of Friday Offcuts next week to finish the year – but please note - it will be ONE DAY EARLIER - on Thursday 22 December. If you are finishing the year up today, a special thanks to you and our readers who have made 2011 such a memorable year, our contributors, those providing us news links and tips, advertisers and of course those sending through a regular stream of the “last story every week”. Your input, comments (there were a number from you to the Letters to the Editor last week in response to the news on the dramatic drop in carbon prices) and support has certainly been appreciated. Enjoy the break and we look forward to bringing our first issue of the new year to you on Friday 20 January 2012.
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This week we have for you:
Durban climate change outcome welcomedNZ Climate Change Ministers Nick Smith and Tim Groser have warmly welcomed the outcome of the UN Climate Change negotiations which concluded successfully in Durban.“This agreement meets all the realistic expectations the New Zealand delegation had when it arrived in South Africa two weeks ago,” Mr Groser said. The agreement: • Maintains the legal structure of the existing Kyoto Protocol while improving rules in the treatment of land use and forestry. These changes have environmental integrity and make more sense for New Zealand moving forward; • Reinforces commitments made in principle by all major emitters at Cancun last year for the period beyond 2012 to 2020 and thus ensures a far more comprehensive international approach to combating climate change than the very partial coverage a Kyoto deal alone would have secured. At the request of the South African Government, Mr Groser facilitated these negotiations; • Crucially, foreshadows a single new international agreement beyond 2020 (the "Durban Platform") that will bring all major emitters, developed and developing, within a legally binding framework; • Unlocked the way forward for the $100 billion Green Climate Fund designed to assist developing countries meet the adaptation and mitigation challenges they face. More >> New Forests to acquire 46,000ha Tasmanian plantationThe Australia New Zealand Forest Fund, a forestry investment fund managed by Sydney-based New Forests Pty Limited, has agreed to acquire a 46,000 hectare softwood plantation forestry estate located in the north of Tasmania. The forestry estate will be acquired from a joint venture between Forestry Tasmania and a global timber investment manager for a total purchase price of $156 million. New Forests has lodged an application with the Foreign Investment Review Board, and the transaction is scheduled to complete in January 2012.New Forests’ Managing Director, David Brand, commented, “New Forests is pleased to acquire this attractive forestry estate, which is an important component of the sustainable plantation timber industry in Tasmania. These plantations are on generally flat to rolling terrain, with good rainfall and a history of good management. The estate makes for a high-quality, long-term investment opportunity.” New Forests currently manages over 275,000 hectares of timberland properties across Australia on behalf of its institutional investment clients. The transaction is based on acquiring the plantations via a Forestry Right on Crown Land, which provides for on-going operations through 2069. The forest currently produces over 550,000 cubic metres of softwood timber per annum, largely under contract to local processing facilities. With a diversified age class structure across the estate there will be a steady and growing cash yield over time. New Forests (www.newforests.com.au) manages investments in sustainable forestry and associated environmental markets, such as carbon, biodiversity, and water, for institutional and other qualified wholesale investors. New Forests executes three investment strategies that provide clients with diversity and choice around risk-adjusted returns, geography, and market exposure: sustainable timberland investment in Australia and New Zealand; forestry investment in high-growth markets of the Asia Pacific region;and conservation real estate and environmental markets investment in the United States. The company is headquartered in Sydney with offices in Singapore and San Francisco. LiDAR benefits forest engineering
In the just completed ForestTECH 2011 technology series, Australian and New Zealand foresters discussed how forest inventory using data collected from LiDAR had been validated against ground plotting, the significant savings that can be attributed to using remote sensing and how it’s now being integrated into most company’s forest inventory and operational planning.Dean Neilson, National Engineering Manager for PF Olsen at the Rotorua event last week provided results and a case study on how LiDAR was being used for road lining and harvest planning in three challenging Bay of Plenty forests. Together there was a total area of around 6000 ha and anticipated harvest of 1.2 million m3 over the next 10 years. As Dean explained, all three forests were going to involve steep country logging, high road construction/engineering, logging and transport costs and a high exposure to environmental risk. LiDAR data is already providing more complete terrain information at a much cheaper cost than more traditional ground survey methods. For road design and harvest planning, better planned and controlled earthworks have been possible, geotechnical hazards are able to be gone through in much more detail, a number of options in the office are able to be tested and costs are able to be fine-tuned – providing greater certainty and less variability to the budget. With the quality of the LiDAR outputs, put simply, it’s a much cheaper option to run your design iterations using a technician at $65/hour compared to a D6 bulldozer on the ground at $235/hour. Costings for the area surveyed, software and training were all given as part of the PF Olsen presentation. ForestTECH 2011 delegates from today will be able to download most of the 30 or so presentations and results from all recent trials profiled as part of the series. The photos here were taken over the last couple of weeks at the both venues for ForestTECH 2011. BNZ Carbon News The big news in carbon markets at the moment is that the Durban climate talks have ended with a new agreement. After two extra days of negotiations an agreement, called the Durban Platform, has been reached, which aims to legally bind all countries to reduce emissions. It was also announced last week that New Zealand and Australia have agreed to link our respective emissions trading schemes from 1 July 2015. Officials hope to have an agreement in place by the end of 2012, with a working group looking into how the two schemes should be linked. Despite all this good news, the prices of NZUs have continued to fall dramatically. This is due to the two fold effects of the European sovereign debt crisis; (1) lowering the EUR/NZD rate and (2) decreasing demand from industrial emitters for European carbon credits. The best way to describe the situation in European carbon markets at the moment is panic. The low price on the international stage has caused CERs to flood into the New Zealand market. As CERs can be used for compliance purposes, many New Zealand emitters have purchased these units, decreasing demand for NZUs. NZUs are currently trading at NZ$8.80 and CERs are trading at NZ$6.60. The New Zealand Government has proposed to ban industrial gas CERs for NZ ETS compliance, this should provide some relief when it comes into effect. The Government is consulting on two timing options, namely to ban industrial gas CERs that enter the NZEUR from 1 January 2012 or 1 January 2013. Both timing options are earlier than the 1 May 2013 effective start date of the EU ETS ban on industrial gas CERs. This is important to prevent the NZETS being the last scheme accepting the CERs, which would drive the price down to close to zero. The ban would apply to industrial gas CERs that have already been purchased under existing forward contracts but will not be delivered until after the regulations come into force. However, the Government is also consulting on whether there should be an exemption for such forward contracts. The ban would not apply to industrial gas CERs in the NZEUR at the time the regulations come into force.  Expansion of pulp production in China continuesWith the lack of sufficient quality and quantity of domestic wood fibre supply, new pulp mills in China are looking to expand importation of wood chips from plantation-rich countries in Southeast Asia to meet their growing fibrer needs. In the 3Q/11, Vietnam, Thailand and Indonesia were the major suppliers to China, together accounting for about 88 percent of all imports of hardwood chips, as reported in the Wood Resource Quarterly.Malaysia, Cambodia, Chile and Brazil are few of the recent and still small suppliers of hardwood chips to China. These countries, which all supply wood chips from fast growing Eucalyptus and Acacia plantations, are likely to expand their shipments in the coming years when Chinese pulp mills continue to diversify their supply sources. The wood chip imports in the first ten months of 2011 already equal more than the total volume of imports in all of 2010. This year’s imports will reach around seven million tons, or 37 percent higher than in 2010. This upward trend is expected to continue in 2012 and 2013 because the Chinese pulp industry is in an expansion mode. Pulpmills in China consume practically only hardwood fibre, so imports of softwood chips were negligible up until last year when a few shipments started to enter Chinese ports from Australia, Russia, the US and New Zealand. This year, total softwood imports may reach just above 300,000 tons, or four percent of total chip imports. The average value for imported wood chips has steadily increased, reaching $180/ton in the 3Q/11, or about 22 percent higher than the same quarter last year, as reported in the Wood Resource Quarterly. Vietnam is the lowest-cost supplier, while the cost for Eucalyptus chips from Australia were at the high-end in the 3Q. The cost of chips imported from the major supplying country Vietnam, have gone up almost 40 percent over the past two years. Vietnam is also shipping large chip volumes to Japanese pulp mills and it is interesting to note how the price discrepancy between chips exported to Japan and China has declined from almost $60/ton premium for Japanese bound chips in 2009 to only $14/ton in the 3Q/11. Source: Wood Resources International, www.woodprices.com Future Forestry Finance 2012 programme just releasedEarly next year FIEA is running the biennial conference series Future Forestry Finance 2102,which brings together the forest industry, Iwi trustees and the finance industry. The 2010 event was instrumental in building networks between these three groups and we expect the series in March 2012 to be just as valuable for people from these three sectors wanting to grow their knowledge about how the sectors interact. The programme has now been released and you can also get a real deal with the early bird rates on-line RIGHT NOW. Check it out - click here for more information. Outdoor softwood timber prices on the rise
URS has just released the September quarter 2011 edition of the Australian Timber Market Survey (TMS) report. The TMS reports on timber price movements collected through a quarterly survey of the buying price of timber products by timber wholesalers and merchants in eastern Australia.New dwelling construction approvals steadied this quarter at a national level after a period of sustained decline. This result was mostly derived from a significant increase in construction approvals in New South Wales (20.9%), which offset decreases in Victoria (-6.4%), Queensland (-3.7%) and South Australia (- 14.8%). Following the cessation of state government first home buyer grants, monthly dwelling approvals have been volatile over 2011, particularly in Victoria and New South Wales. However, the November adjustment of the OCR is a positive outcome for the housing industry. Weaker conditions in the housing market have contributed to lower prices for timber products used in housing construction. This quarter’s TMS results showed prices for MGP10 and MGP12 structural softwood products falling by around 0.5% to 1.0%. For the year to September 2011, price falls for MGP products ranged from around 2.66% to 7.00%. Victoria experienced the largest price falls for key MGP products with quarterly price declines ranging from around 0.9% to 3.0%. In contrast to structural products, outdoor softwood timber product prices continued to increase over the September quarter 2011,reinforcing a diverging price trend between structural and outdoor landscaping products. Imports of softwood sawn timber rose to around 156,000 cubic metres over the September quarter 2011, an increase of around 7.1% following a relatively low result over the June quarter. Softwood timber imports have followed a general downward trend since the June quarter 2010, despite a historically strong AUD. This downward trend in softwood timber imports has coincided with a period of falling dwelling commencements. However, trading conditions for timber importers are still favourable in terms of the historically strong AUD, low shipping costs, sufficient global supply and weaker economic conditions in North America, Europe and New Zealand. Imports of softwood plywood and veneer continued to increase to around 78,500 cubic metres over the September quarter 2011, a fourth consecutive quarter of increases. Imports were sourced form a number of countries including New Zealand (23%), China (18%), Chile (18%), Malaysia (13%) and Indonesia (11%). For more information visit urscorp.com Air NZ signs MOU with biofuel company LicellaAir New Zealand yesterday announced it has signed a Memorandum of Understanding (MOU) with Licella Pty Ltd to examine the development and commercialisation of a process to convert woody biomass into sustainable biofuel in New Zealand.Licella has developed a unique process using a Catalytic Hydro Thermal Reactor (Cat-HTR) which converts woody materials and other bio-mass into a high quality bio-crude oil. Under the MOU Air New Zealand and Licella will jointly explore the potential of the technology to produce sustainable aviation biofuel in New Zealand. Air New Zealand has been at the forefront of aviation’s drive to create sustainable second-generation aviation biofuels which can be used as alternatives to the existing fossil based aviation fuels. The airline played an important role in the certification of sustainable aviation biofuels, with the data collected from the airline’s biofuel test flight in 2008 contributing to the certification of second-generation biofuels. More >> New giant kauri log on display
A new giant kauri log display is now open to the public at Gumdiggers Park in Awanui, in the Far North of New Zealand. The kauri log was found earlier this year while excavating three smaller kauri logs buried beneath a sandstone layer at the park. The ancient tree has a girth of 9 metres and is 12 metres long. The kauri log is estimated to be around 100,000 years old and was on the same level as other buried preserved trees which were once part of a vast kauri forest on the Aupouri Peninsula.Ongoing study at the park has revealed that two cataclysmic events occurred on the peninsula 100,000 years ago. The park continues to attract scientists from New Zealand and around the world as part of studies on climate change. Gumdiggers Park site was purchased by the Heath family in the late 1890’s with the plan to farm. The family changed their mind when they realised there was money to be made from the flourishing kauri gum industry. The family dug for the gum themselves as well as opening the land up to other diggers. The area was worked until 1937 and then left mostly untouched until the land was inherited in the early nineties. After research by scientists the family decided to develop the unique landscape and with the help of Kaitaia and Auckland archives and the local descendants of the gum diggers pieced together the history of the area also known as the Kaikino Swamp gumfield. In some of the excavations there was timber buried one or two metres beneath the ground, under an ancient sandstone layer which proved to be a unique situation. A team of Auckland University scientists examined the find and were amazed at the age of the kauri. Scientists have been studying the site ever since. More >> Change to Victorian timber industry policy announcedVictorian native timber processors will be given greater resource security through long-term contracts of up to 20 years under the state government's timber industry plan. The policy, launched this week by the Minister for Agriculture, Peter Walsh, will allow VicForests to sell timber in a more flexible way other than by auction. Victoria will continue to auction timber, but will urge the other states to end administered pricing and open up log pricing to the market.For more information from the Sydney Morning Herald article click here WPC growth 25% per annum The European wood plastic composites (WPC) market has been growing at an average 25% each year, according to a new multi-client study by Applied Market Information. The researcher says its report illustrates how easily the European WPC market is outpacing other plastics and construction markets and is no longer driven by imports from the US or Asia, either.Data released in late 2009 indicates that the global WPC market stood at more than 1.5m t/y and was dominated by the US and China. Today, AMI says, the European WPC scene is abound with strong established European producers, the most successful of whom saw 2010 EBITDA returns that were an attractive 25%. In addition, there is space for new entrants into the market. Wood plastic composites and other processes for wood modification are increasingly being looked at by traditional wood producers as a means of diversifying their manufacturing, product and market mix. WPC’s will be profiled as part of the Wood Preservation 2012 series being planned for wood treatment companies in Australasia in mid-May next year. Source: PlastEurope.com Global outlook for softwood lumberGlobal softwood lumber/sawn wood demand bottomed out in 2009 at 250 million m3 and is projected to reach 275 million m3 in 2011, a gain of 3.8% over 2010. In 2012, the global outlook is for a more modest increase of about eight million m3, to 283 million m3 (+3.1%). The increase in softwood lumber demand in 2011 did not come from the developed countries, i.e., Europe will increase by less than 1% (versus 12.8% in 2010); the U.S. is expected to increase by 2.6% (versus 6.0% in 2010); and Canada will be lower by around 5% (after a gain of 12% in 2010).Other regions, such as Russia (+16%), Japan (+5%), China (+16%), other Asian countries, and some Middle East and North Africa countries, are all reporting much higher gains. The difference in lumber consumption between North America and Europe continues to favour Europe (excluding Russia) due to the impact of the housing-market collapse on U.S. lumber demand. As with consumption, global softwood lumber production experienced a cyclical peak in 2006, reaching 332 million m3 (141 billion bf, net, or about 210 billion bf if produced on a nominal dimension basis). By 2009, output had decreased to 260 million m3 (-22%; figures 3–5). For 2011, global sawn wood output is expected to show an increase of 10 million m3 from 2010 to achieve 288 million m3 (+3.6%), due mainly to growth in the first three quarters prior to a slowing of output. For 2012, a gain to 297 million m3 (+3.1%) is forecast given that most markets are not expected to see any sizeable gains until 2013 at the earliest, impacting output accordingly. Note that adjustments have been made to increase Russian lumber production and consumption to account for unreported volumes; see the 2011 UNECE market report for more details (Russell Taylor is coordinator of the report’s “Softwood Lumber” chapter). Source: International Wood Markets Group, www.woodmarkets.com  The Christmas tree! Early discoverers in North AmericaThis really is an interesting read. It isn't an essay about the history of the Christmas tree, whose tradition can be traced back to late-Middle Ages Germany, but rather, a brief history about the people who discovered some of them. This is not quite as boring as it sounds. In the 1700s and 1800s, botanical treasure hunting in the Americas was every bit as swashbuckling as high-seas piracy or any other sort of adventuresome career you can think of. The man for whom the Douglas fir was named was stomped to death by a fitfully angry bull in close quarters, for example. Either that or he was murdered. Nobody knows for certain.Source: Tree Frog Daily Forestry News, More >> Jobs
Buy and Sell
...one to end the week on...Council recliners
Bunnings Hardware is having a sale on Council Recliners. I got curious as to this item, so went to find out what a Council Recliner was................................. Guess what? I have had one for years!
One more as we're getting close to Xmas - some good quick fire answers. QUICK FIRE ANSWER 1 It was mealtime during a flight on a British Airways plane: "Would you like dinner?" the flight attendant asked the man seated in the front row. "What are my choices?" the man asked.. "Yes or no," she replied. QUICK FIRE ANSWER 2 A lady was picking through the frozen Chickens at a Woolworths store but she couldn't find one big enough for her family. She asked a passing assistant, "Do these Chickens get any bigger?" The assistant replied, "I'm afraid not, they're dead." QUICK FIRE ANSWER 3 The policeman got out of his car and the Teenager he stopped for speeding rolled down his window. "I've been waiting for you all day," the Cop said. The kid replied, "Well I got here as fast as I could." When the policeman finally stopped laughing, he sent the kid on his way without a ticket. QUICK FIRE ANSWER 4 A truck driver was driving along on a country road. A sign came up that read " Low Bridge Ahead." Before he realised it, the bridge was directly ahead and he got stuck under it.. Cars were backed up for miles. Finally, a police car arrived. The policeman got out of his car and walked to the truck's cab and said to the driver, "Got stuck, eh?" The truck driver said, "No, I was delivering this bridge and ran out of diesel!"  And on that note, good luck with the Xmas shopping and have a great
weekend. For those taking off on their break early, enjoy your time away
with friends and family. Cheers. Brand PartnersOur Partners & Sponsors Friday Offcuts is made possible through the generous support of the following companies.
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