Friday Offcuts – 13 July 2012

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This week we’re announcing an Australasian first. It’s been a long time coming but Australasia will now be getting its own dedicated Wood EXPO. In September 2013, the Forest Industry Engineering Association (FIEA) will be bringing together major global technology providers in solid wood, in manufactured wood products and in wood panels - and bringing them down to this part of the world.

As well as local industries, Wood EXPO 2013 will be a world first for international suppliers. Unlike other major trade shows, FIEA’s very successful formula of running both a New Zealand and Australian event in consecutive weeks will be used. For Australia, Albury, a central location which is easy to get into and out of has been selected and of course, Rotorua, the centre of forestry activity for the New Zealand show.

This new event will comprise a unique mix of conferences, practical workshops, displays and networking opportunities to ensure industry maximise their time whilst there. It’s a new concept for the region, we know it’s long overdue and it will be run by an organisation that has a well-deserved reputation of delivering focussed, practical world-class events for the local industry. Further details can be found in this week’s lead story and early information on the event can be found on .

From Australia this week we have more in the on-going Gunns saga, news that Australia set a new world record last month of 21 years of continued economic growth and a call by the CFMEU to set up an anti-dumping agency stating that 30% of the framing lumber used in the country's home building and construction market is imported and priced at below the cost of production. The real interest though in the next couple of weeks will be on Tasmania. We wait to see if Tasmania’s forestry industry and environmentalists are going to reach agreement on the State’s forestry peace deal. The groups now have less than two weeks to go to strike a deal. So, what do you think the chances are?

Finally, you’ll notice in one of the adverts this week that WOOD MARKETS Group are promoting their soon to be released third edition of The China Book, a strategic analysis of the Chinese wood products industry and market developments, including an outlook to 2017. For Friday Offcuts and WoodWeek readers, please note that the early-bird discount rate for purchase of this new resource has been extended to 31 July.

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Wood EXPO 2013 planned for Australasia

North America and Europe have a number of well-established and attended trade shows where the very latest in wood products technologies are being showcased to industry. To date, outside of the very popular technology events being run by FIEA (SawTech, ScanTECH, Wood Manufacturing, DryTech, Mill Maintenance….), there is no dedicated wood products show for either New Zealand or Australia.

FIEA has a very successful track record in designing and running independent technology events in both countries. It’s already strongly supported by industry, by researchers and international product and service suppliers to the industry. “Major technology providers and wood producers have been pushing us in this direction for several years”, says Brent Apthorp. “It makes good sense to amalgamate some of our well attended two-yearly technology programmes into one larger show for this part of the world”.

“The same FIEA focus applies though –providing an independent platform for local companies to evaluate the very latest developments - new tools, new technologies and new wood products from around the world. The objective is for local companies to learn, discuss, evaluate and adopt some of these tools, new equipment or operating practices to improve their operating efficiencies and international competitiveness.” says Mr Apthorp.

As the name suggests, the Wood EXPO will cover all things wood – from log yard handling, sawing technologies, saw-doctoring, wood scanning, wood gluing and laminating, timber machining, lumber QC, mill maintenance, kiln drying, finger-jointing, wood finishing, composite panels and engineered wood products.

For further information at this stage, check out the event website, Mark the dates into your diaries and for prospective sponsors, exhibitors and delegates, you can express your interest to get updates on the event website. We’ll ensure we keep you informed as the event unfolds.

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Clean Technology Investment Program funding available

Funding is available now under the Clean Technology Investment Program (CTIP). CTIP offers the opportunity to gain assistance for eligible capital investment and associated activities that generate carbon and energy savings, including:

• Replacement of existing manufacturing plant, equipment and processes
• Modifications to existing manufacturing plant, equipment and processes
• Changes to energy sources for existing or replacement manufacturing plant or processes
• Replacing or modifying existing manufacturing facilities to enable production of new low emissions products.

AFPA reports that a major problem with the design of the CTIP is the eligibility exclusion for activities specified under the Jobs and Competitiveness Program which affects companies with emissions intensive and trade exposed activities. AFPA will continue to lobby for sensible change. The Government has made available comprehensive information on the CTIP.

Source: AFPA Canopy

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Mixed fortunes for Gunns this week

Do you want the good news or the bad? On the positive side of the ledger, embattled Australian timber company Gunns Limited is close to finalising a sale of its Portland woodchip loading facility in Victoria for about AU$60 million according to a report in the The Mercury. It is understood the buyer is Australian Bluegum Plantations a subsidiary of US-based firm Global Forest Partners. It is expected the company will make an announcement to the stock exchange tomorrow.

In other news this week the company was reported to have been hit with a AU$65 million tax bill. Gunns told the Australian Securities Exchange that the Australian Taxation Office had issued it with two amended income tax assessments. The assessments relate to an AU$100 million transaction that involved the sale and leaseback of woodchipping and processing equipment. The Tax Office is demanding more than AU$42.5 million for the "denial of rollover relief" and AU$22.4 million for the "denial of rental deductions".

In its statement to the stock exchange, Gunns declared that it would object to the Tax Office's demands. The company considers that these assessments are alternatives and cannot both be correct. The company believes that its position in relation to the transaction is correct and that its position is supported by both the existing case law and the ATO’s published ruling on sale and leaseback transactions. Gunns intends to vigorously defend the assessments. In the meantime arrangements will be made for part payment of the assessments whilst the matter remains in dispute. For the full announcement to the ASX from Gunns, click here

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Accidental entrepreneurs leverage technology for growth

Symantec Corp announced the findings of a landmark study it commissioned from Forrester Consulting, which reveals that the leaders of small businesses launched during the Great Recession are dramatically different than those who launched their company prior to 2008.

A new breed of entrepreneur: the accidental entrepreneur – defined as a company founder who started his or her small businesses out of pure necessity rather than a lifelong dream of “being their own boss” was borne. These accidental entrepreneurs are agile, highly educated, tech-savvy and battle-tested business professionals and the companies they founded, and will found, are born to grow.

While the recent recession has extinguished the torch of an unprecedented number of small businesses, the number of new companies born during the last three and a half years is equally unmatched. In the U.S. alone, there were 60,000 more businesses started per month in 2009 than in 2007, according to the Kaufmann Foundation’s Index of Entrepreneurial Activity.

The Forrester Consulting research indicates that the companies founded as the world economy struggled are poised for explosive growth, particularly companies with 10-49 employees, and that they aggressively leverage technology such as cloud computing to fast-track their success. More >>

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Australia sets economic growth record

Australia set a new world record on 30 June 2012 of 21 years of continued economic growth - an achievement unmatched by any other developed country in recent times. While the global economic crisis endured, Australia's trade with Asia, mining industry, and business supportive government drove positive growth for the country in 2012.

Each of the first three quarters of the 2011/2012 Australian financial year reported positive economic growth of 1.0 percent, 1.0 percent and 0.9 percent respectively according to the Australian Bureau of Statistics. Exact growth for the fourth quarter will be reported by September, but it is forecasted by HSBC to continue the positive growth pattern.

"The Australian economy has proven itself to be dynamic and robust over the past 20 years," said PricewaterhouseCoopers Economics and Policy leader Jeremy Thorpe. "Australia's economic strength is envied across the world. Thanks to a resilient natural resources sector, the Australian economy is well positioned for future growth."

Source: Invest Victoria

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NZIF forester of the year announced

The New Zealand Institute of Forestry Forester of the Year Award for 2012 was presented to Mr Brett Gilmore, a Registered Forester from Napier at the Institute’s annual conference in Christchurch last week (Photo: NZIF 2012 Forester of the Year, Brett Gilmore (left) receives his award from NZ Institute of Forestry President Andrew McEwen).

Announcing the recipient of this prestigious award, President of the Institute, Dr Andrew McEwen, noted that the award recognises leadership, excellence and personal integrity.

Mr. Gilmore is employed in the Forestry and Logistics Division of Pan Pac Forest Products Ltd., the integrated forestry and timber products company in Hawkes Bay. Mr Gilmore has had diverse roles at Pan Pac including forest engineering, land and environmental management, estate modelling and technical projects including IT implementation.

The award recognises Mr Gilmore’s participation in the wider forestry scene. He has been a member of the NZ Forest Owners Association Environment Committee for fifteen years, is the Chair of the New Zealand FSC Cluster Group and is a member of the Standards Development Group which negotiated a New Zealand FSC National Standard. More recently he has been project manager/author for the NZFOA review of the 1999 LIRO Roading Manual, culminating in the release of the 2012 Forest Road Engineering Manual, and also for the associated Operator’s Guide. Mr. Gilmore is Secretary of the Hawke's Bay Forestry Group which addresses regional forestry issues.

“It is Brett’s on-going professional approach to representing forestry in a wide range of issues that has earned the respect of his peers and led to the award of NZIF 2012 Forester of the Year”, said Dr McEwen. “I am delighted that the Institute has been able to recognize the achievements of this outstanding member.”

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Tool maximizes cutting for structural timber

Solid Wood Innovation (SWI) NZ, with support from its shareholders and FWPA, has developed a Cant Optimisation Tool that helps sawmiller’s get the maximum volume of structural timber from each cant. A commercial evaluation trial of over 500 radiata pine logs confirmed the Tool increased the value of processed timber to AU$61 per cubic metre using known average industry pricing mechanisms, an increase of AU$14 per cubic metre from a non-optimised value of AU$47 per cubic metre. The first commercial installation has been operating successfully for six months.

Each cant is measured at commercial mill speed for its sonic resonance and X-ray derived green density profile. The two measures are then processed using SWI-developed algorithms to accurately predict the ‘pith to bark’ green stiffness of the wood in the cant and centres the low stiffness zone. The tool then instructs the sawing system how to optimise cutting for structural product based on timber stiffness.

The technology is available to all SWI shareholders, including Australian FWPA qualified sawlog processors; companies just need to register with SWI and sign a confidentiality agreement. Although terms and conditions are yet to be finalised, SWI will develop a licensing structure for this technology in recognition of shareholders who have contributed to the development but can’t use the technology directly.

Source: R&D Works

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CNI nursery to reopen

Owhata Nursery in Rotorua, NZ is to re-open after a number of years lying fallow. Grant Hastings from Forest Nursery Consulting Ltd, based in Ngongotaha, has taken on the lease in association with the landowner’s, Owhata 2B and 7, Ahuwhenua Trusts. Hastings says the opportunity to consolidate the current business from 3 sites and the ability to increase production are all good news for Rotorua.

Hastings says “the nursery has the capacity for raising 14 million plants, radiata pine and eucalypt species. It will provide employment for the trusts iwi and other Rotorua locals. Being centrally located the nursery will be to service a large area in the North Island. The trusts are keen and enthusiastic supporters of the re-opening and I’m looking forward to a long term relationship that will bring benefits to them and the local people of Rotorua.”

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Tasmanian tree-sitter claims record

The Australian reports that an icy Tasmanian winter won't stop Miranda Gibson setting an Australian record for a tree-sitting protest. Ms Gibson will reach 209 days perched 60m from the ground in the Tyenna Valley, in southern Tasmania, on Tuesday. Environmental group Still Wild Still Threatened says that betters the 208 days Manfred Stephens spent atop a tree near Cairns in 1995. The world record is regarded as the 738 days spent by Julia 'Butterfly' Hill in a California redwood forest between 1997-99.

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Weaker pulp markets see chip and pulp log prices fall

The global pulp market is mired in uncertainty: uncertainty when China will move into buying mode, uncertainty about where the European economy is heading and uncertainty if low spot prices for softwood market pulp will push pulp mills in Europe and North America to take market-related downtime.

In this environment, pulp mills are trying to squeeze their costs to remain competitive and to be able to run at full capacity. Because wood fibre costs currently account for between 52-71 percent of the total production costs depending on region of the world (source: Fisher International), the primary focus in the cost-cutting has been on reducing the price they pay for wood chip and pulpwood prices over the past six months.

This has created the situation in which many fibre suppliers have been forced to accept lower prices for their fibre. As a consequence, wood fibre prices fell throughout the world in the 1Q/12, according to the Wood Resource Quarterly, which caused the two global wood fibre price indices to decline to their lowest levels in over a year.

The Hardwood Wood Fibre Price Index (HFPI) experienced the biggest decline, falling by 3.5 percent from the 4Q/11 to US$109.67/odmt. Since its all-time high last fall, the HFPI has come down seven percent in just two quarters. Wood costs were down the most in Europe and Japan. The price premium for hardwood fibre over softwood fibre is currently the lowest since 1Q/11.

The Softwood Wood Fibre Price Index (SFPI) fell a more modest 0.4 percent from the previous quarter, which was four percent lower than in the spring of 2011. Softwood fibre price trends were mixed, with increases in Oceania, Chile and the US South and falling prices in Europe, Western Canada and Japan. With continued soft pulp and paper markets during the second quarter, wood fibre costs are likely to continue to weaken in many key markets around the world in the coming months.

Source: Wood Resources International LLC,

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Australian union highlights need for anti-dumping agency

Australia's Construction, Forestry, Mining and Energy Union (CFMEU) is calling on the federal government to establish an anti-dumping agency, saying it could save hundreds of jobs in Southwest Victoria and Southeast South Australia. According to CFMEU, almost 30% of framing lumber used in the country's home building and construction market is imported and priced at below the cost of production.

Brad Coates, secretary of the union's Greater Green Triangle district, said this had forced companies including Carter Holt Harvey, Kimberly-Clarke and Gunns to cut hundreds of jobs at their processing facilities. He predicted that hundreds more jobs would be lost if imports of cheap timber continued, and said reducing the level of imports by just 10% could save up to a thousand jobs.

Coates predicted that if no action was taken, the industry would face a 'tsunami' of job cuts within 12-18 months. He said it would be a waste of time to hold a review on the situation as the need for an anti-dumping agency had been recognized two years ago.

Source: ABC News, Ballarat

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China engineers digital vs. print showdown

If China succeeds in achieving one of its goals in the current five-year plan, 80% of its more than 1.3 billion residents will read books or periodicals by 2015. To accommodate that target, China details in its 12th Five-Year Plan period (2011-2015) that the nation will “accelerate the construction of farmers' libraries, and urban and rural newspaper reading boards.”

The plan also says “by 2015, each Chinese citizen will have, on average, 5.8 books and 3.1 periodicals every year; every 1,000 people will have 100 daily newspapers; every 10,000 people will share 1.3 publication outlets.”

That can only be good news for the paper, publishing and printing sectors, and promise of their growth is affirmed by market research firm IBISWorld’s report that the “book publishing industry in China is set to generate revenue of US$9.5 billion in 2012, up 3.1% from 2011.” According to the report, “textbooks continue to account for the largest share of industry revenue.”

Source: Industry Intelligence

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What if we lived in plastic houses?

Living in chemical-free homes made from sawdust and recycled plastic is a giant step closer thanks to some clever research carried out at the University of Canterbury.

The research, led by UC’s Professor Shusheng Pang (Chemical and Process Engineering), has been eight years in the making. It has involved UC academics and students, as well as representatives from Scion (a Crown Research Institute), AgResearch (a specialist research organisation) and Mastaguard (a product supply company).

More than NZ$1m worth of government funding has been pumped into the research project. Right now, it’s on the cusp of commercialisation. More >>

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Buy and Sell

...and one to end the week on...using old watches

Finally, those living in the USA can buy Ukrainian-made motorcycles! Production of Ukrainian Harleys was launched by Ukrainian immigrant Dmitry Khristenko who now lives in the States. Dmitry makes his motorcycles using old watches. Check them out!

And on that note, have a great weekend. Cheers.

Brent Apthorp
Editor, Friday Offcuts
PO Box 904
Level Two, 2 Dowling Street
Dunedin, New Zealand
Ph: +64 3 470 1902
Fax: +64 3 470 1904
Web page:

This week's extended issue, along with back issues, can be viewed at

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