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Friday Offcuts – 26 November 2010

On Wednesday we finished the forestry technical series, ForestTECH 2010. We’ll be covering in future issues some of the new developments and practices being employed by forestry companies to improve the management of their forest estate and operations. For those unable to get to either event, a link to the full set of proceedings is given in the lead story in this issue.

This week we have a couple of stories around carbon forestry. The first builds on some earlier work by a New Zealand forestry company that undertook a detailed study into quantifying their operations carbon footprint (copies of which can be accessed via the story below). The data is being used by the company to improve their own business and operations. It appears that the wine industry has now gone one step further and is including this data on the label – as a selling point or as a means of maintaining or growing their market share.

The other story picks up on new research that questions forests’ ability to help offset global warming. A couple of recent studies (one which includes Australian Scientists) questions growth models that have been used in official climate change forecasting. It's suggesting that based on this research, there may well be implications for some types of forest carbon projects such as reforestation and improved forest management.

Finally, our thoughts go out to the small Greymouth community in New Zealand still reeling from the 29 miners that died at the Pike River mine this week and the forestry workers and communities in Tasmania that have been hit with announcements this week on closures of Gunns hardwood veneer, sawlog and woodchip operations.

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"Carbon footprinting of forest products - what do you think?"

Nice to have but of little immediate benefit to business
Likely to provide payback through improved business practices
Helps push our green credentials but unlikely to increase sales
Like FSC - will become a requirement for doing future business

Plantations could replace native-forest logging in Victoria

Australian timber industry officials and environmentalists are already arguing over the Victoria government's new proposal for forest peace, following a study released last week that says plantation timber could replace most of the state's native forest logging within five years, The Age reported.

The Conservation Foundation and the Wilderness Society commissioned the study by the National Institute of Economic and Industry Research. It found that, by 2015, plantations could meet the entire demand for timber for lower-value products such as woodchips and pulp. The study stated most higher-grade sawlogs used for floorboards and joinery would come from plantations within a decade.

The Wilderness Society's Luke Chamberlain said the report showed that plantation timber, mostly from western Victoria, could immediately replace most wood taken from native forests. Philip Dalidakis, head of the Victorian Association of Forest Industries challenged the study and called for the Wilderness Society to take a more conciliatory approach. The study used flawed modelling and assumptions that undervalued the native forest industry, said Dalidakis.

The state government is believed to have commissioned its own study but its results have not been released, reported The Age. Premier John Brumby's government has proposed stakeholder talks in an attempt to reach a Tasmanian-style forest peace plan. Source: www.forestweb.com


ForestTECH 2010 wraps up in Australasia

The forestry technology series, ForestTECH 2010, set up and designed by Australian and New Zealand forestry companies finished in Albury this week. Close to 200 forestry managers, forest owners, technical foresters and forestry consultants attended ForestTECH 2010 in New Zealand last week and again in Australia on Tuesday and Wednesday this week.

The focus this year was on some of the new tools, technologies and research that are available for forestry managers to improve their planning and operations around selection of the tree crop, plantation establishment and management. The key themes covered in this latest ForestTECH series included; • Genetics and Tree Breeding • Nursery Technologies • Land Preparation • Fertiliser/Herbicide Trials, Technologies and Application • Plantation Silviculture, and • Fire Fighting Technologies.

Further details on some of the key papers and programme content will be provided in futures issues of Friday Offcuts. For those who were unable to get to this year’s forestry technology update, full copies of the event proceedings can still be ordered by clicking on the attached order form.


Carbon footprint a selling point?

Starting early next year, some consumers will be able to buy a New Zealand wine with a carbon footprint analysis on the label according to www.drvino.com. Mobius, a new sauvignon blanc from New Zealand’s Marlborough region, will sport a calculation of greenhouse gas emissions on a per glass basis. Bottles destined for Australia will be the first to receive the notations; other markets will follow with custom calculations from the Carbon Trust, a nonprofit.

With so little space on the label, the graphic and number are helpful for a cursory indication. Hopefully the estimates will be conservative as research has shown, the mode of transportation matters as much or more than the actual distance traveled, making it difficult to put one number on a bottle for countries as big as Australia or the US, where a lengthy truck journey can add more to the GHG calculations than an even longer sea voyage.

In May this year at the Wood Supply Chain Optimisation 2010 event, Nelson Forests outlined to the Australasian forest products industry their work – the first in this part of the world for a forest products business – on quantifying the carbon footprint of their business – from forest to market. Carbon foot-printing was an important tool for the New Zealand operation and increasingly was seen by the company as a necessary tool in the marketplace for doing future business. The presentation given by Andrew Karalus can be downloaded off the Supply Chain Management section of Tech Showcase on www.fridayoffcuts.com


Reshaping of Tasmania’s wood processing industry

The reshaping of Tasmania's forest industry has really picked up pace this week. Gunns chief executive Greg L'Estrange confirmed on Wednesday the closure of its northern Tasmanian wood chipping sites with the loss of some 150 jobs as part of a major operational restructure. The woodchip restructuring is expected to take at least several months.

The company also announced that it had brought forward the timetable to divest itself of all operations not related to softwood plantations and the proposed pulp mill. Gunns plans on selling all of its Tasmanian native forest mills.

Ahead of the company's annual general meeting this week, Greg L'Estrange confirmed he wants to sell all the company’s non-plantation operations including veneer, sawlog and woodchip mills across the state in the next 6 to 12 months but says it is not clear who will buy them. More than 1,500 workers could be affected by the closures.

The company will be getting rid of its Somerset veneer mill, the East Coast woodchip mill at Triabunna and the last of the Scotsdale sawmills. It’s also been reported this week that the Smithton mill, with about 100 staff, is likely to appeal to an Australian buyer rather than a foreign investor. The State Government has indicated hardwood supply contracts could be guaranteed until 2027 following the restructure of the forestry sector.


New Zealand Log Prices - November 2010

Supply and demand in China, New Zealand’s major export log market, appears to be reaching a balance. As such, in-market prices for New Zealand logs in China and Korea have slowed from the rapid rises witnessed through September and October. In-Market prices for a KS log have stepped over US$140/JASm3 and a KI log is currently priced around US$135/JASm3.

Strong demand for logs is continuing in India, however this market struggles to attract volume due to the higher shipping rates eroding returns in New Zealand currency. The remaining markets of Korea and Japan have also experienced strong in-market price rises. This is due partly to competition for supply with China, but also from the dramatic lift in value of the New Zealand dollar over the past 4-6 weeks.

Chinese demand for logs from New Zealand continues to be strong and very real. Tight domestic supplies are driving up local prices and forcing processors to look beyond the border for supply. The latest five-year program for China’s Economic and Social Development has stressed that accelerating urbanisation is an important mission over the coming years. Data from the State Council Development Research Centre (SDRC) indicates that China’s urbanisation rate has hit 46% and is expected to reach 63.6% by 2030. The SDRC adds that urban migrant’s demand for housing is likely to become the largest driving force for China’s economic growth during this time, and such growth would boost domestic demand in China by US$4.5 trillion.

The Combined Agrifax Log Price Index, which measures returns from the whole forest, has jumped up by NZ$3/T this month. It is now at NZ$87/T and back at levels last seen in June 2010. A slight reduction in pricing for pruned logs has offset gains made in the unpruned segment of the index. Rising export log prices have led the gains made in the unpruned segment of the index.

For more detailed reports contact AgriFax at: www.nzxagri.com/agrifax


Waipa Sawmill team celebrates 70th Anniversary

Last Friday night Red Stag Timber staged a gala dinner and presentation to recognise the 70th anniversary of the Waipa Sawmill. A huge crowd gathered to enjoy the evening, held at Skyline Skyrides. During the evening which was MC'd by Red Stag director Marty Verry there was an unveiling of a large carving to honour his father, Phil Verry who passed away in April last year.

The featured speaker for the evening celebration was Paul Shadbolt of ITI - a major customer of Red Stag Timber and Waipa for over 30 years. Close to 500 past and present employees and their partners enjoyed the dinner and celebration which was put on by Red Stag Timber.

The event was also the launchpad for a book documenting the history and people of the 70 years of Waipa Sawmill operation. Co-authored by Kevin O'Conner and Kevin Lyall, the book is entitled "The Cutting Edge - A History of Waipa Sawmill 1939 - 2010".


LIGNA 2011 Technology tour planned

The first LIGNA as a ‘stand-alone-show’ was in 1975. At the last exhibition in 2009 there were nearly 1800 exhibitors from 50 countries presenting their products. With over 130,000m2 and 80,000 visitors LIGNA is the world’s No 1 event for the timber and forest industry.

LIGNA 2011 takes place from 30 May until 3 June in Hannover, Germany. Weinig Australia and W & R Jack have been running tours to Germany to visit the Fair for over 20 years and are now seeking expressions of interest for LIGNA 2011.

Weinig will again conduct a week long ‘Pre-LIGNA’ tour to demonstrate machinery under working conditions in a range of operations in Sweden, Germany and The Netherlands. Planning is well underway, with visits scheduled to some very special sites, demonstrating the latest technology in use over a range of industries. To accommodate the broad spectrum of tour participants that have already expressed interest, the 2011 Pre-Ligna Tour will consist of two ‘streams’. After the first two days in Sweden, participants have a choice of Stream 1 – WindowsTour or Stream 2 – Wood Processing/Engineered Wood Products Tour.

The tour will be departing on Saturday 21 May and arrives back on Sunday 5 June 2011. For further details or to register your interest in next year’s tour please contact: Weinig Australia – Sam Rowe, srowe@weinig.com.au or W & R Jack Ltd, – Peter Cook or Warrick Small, weinig@jacks.co.nz


Cloud over CO2 storage in trees

Two separate studies have thrown doubt over forests’ ability to help offset global warming. Because trees rely on carbon dioxide to grow, it has been predicted that as CO2 levels rise in a warming world, trees would thrive on the increase, grow faster, and thus help soak up excess atmospheric carbon.

As a result of their findings, the authors of both studies have called into question the growth models for worldwide vegetation being used in official climate change forecasting for this century. The results of the studies may also have implications for some types of forest carbon projects such as reforestation and improved forest management, depending on the growth models they use. Ex ante, or upfront, crediting under some standards may see too many credits issued on forecast carbon sequestration with issuances having to be revised after later verification events during a project’s lifetime. More >>

Source: Carbon Positive


Details of Tasmanian forestry aid released

The Australian Federal Forestry Minister has announced the detail of a long-awaited assistance and exit grant package for Tasmanian forest contractors. A AU$20 million package was promised by both sides during the Federal election campaign for Tasmania's 142 log contracting and cartage businesses. Contractors have expressed dismay over the delay in getting that money rolled out.

Senator Joe Ludwig says the total package is worth AU$22.4 million. Of that, AU$17 million will be allocated for exit grants, to assist contractors who want to leave the industry. It’s estimated as many as two-thirds of all contractors engaged in logging public native forests 90 businesses may want to quit immediately.The remaining AU$5.4 million will be divided amongst "viable businesses" who wish to remain in the industry. Contractors have until December 13 to get their applications in. Each grant will be capped at AU$750,000.


EWPAA president re-elected for fourth term

New Zealand-based Rene de Vries, quality improvement manager at Carter Holt Harvey Woodproducts, Tokoroa, was elected a fourth-term president of the Engineered Wood Products Association of Australasia at the EWPAA annual general meeting on the Gold Coast last week. Newly-elected vice-president is Stuart Toakley of Borg Panels, Oberon, NSW.

At the EWPAA conference and dinner Gordon White, plywood product manager, Carter Holt Harvey Woodproducts, Onehunga, was awarded the President’s Trophy and John Hancock Award for excellence in engineered wood products manufacturing and marketing. The presentation recognised the company’s innovative Shadowclad powder-coated cladding suitable for both exterior and interior applications.

The Con Otto Award for product development and customer service was awarded to Austral Plywood, Brisbane, for its high-tech veneer grade optimisation. The Distributor Award for plywood and LVL products was won by Plywood Services, Archerfield, Brisbane.


ForestrySA embraces new aerial incendiary technology

ForestrySA began its annual fuel reduction burning program recently, with successful burns at Comaum and Wandilo using new technology. The prescribed burn program involves burning selected areas of native forest to establish strategic fuel reduced areas for forest and community asset protection.

And this year, for the first time, ignition of some areas is being undertaken using new aerial incendiary technology. The Raindance Systems ignition device was purchased over the past year by ForestrySA and paid for in part with funding from the Federal Governments Natural Disaster Resilience Program.

The device is fitted to a helicopter and deploys incendiary capsules at regular intervals into areas pinpointed for prescribed burning, allowing timely, rapid and accurate ignition and conduct of fuel reduction burns. This technique allows many more areas to be ignited in a shorter space of time, capitalising on the small number of days when weather conditions allow fuel reduction burning to be carried out.


Hart’s Reynolds Group wins US$6.5B Pactiv deal

Graeme Hart’s Reynolds Group Holdings is closing the gap on Fonterra Cooperative Group’s annual revenue after shareholders of Pactiv Corp. approved a US$6.5 billion takeover. Investors in Illinois-based Pactiv approved Hart’s leveraged buy-out, which will see the packaging company merge with Reynolds to create a group with pro forma combined revenue of US$9.78 billion (NZ$12.5 billion). Fonterra’s annual sales were $16.7 billion. Hart now presides over an empire with greater sales than Telecom Corp. and Fletcher Building Ltd. combined after almost 99% of Pactiv’s shareholders approved the US$33.25 a share offer. More >>


Maersk first with fleet CO2 emissions verification

Maersk Line and Lloyd’s Register have combined to deliver what’s claimed to be the first ship-by-ship verified carbon footprint assessment. Maersk says it will make available to its cargo customers the results of independent measurement and verification of the CO2 emissions of its container fleet, carried out by the classification society.

Jacob Sterling, head of climate and environment at Maersk, said the company wanted to make independent CO2 verification an industry standard to allow customers to make decisions on choice of shipping line based on environmental performance. Maersk will add the emissions results to a scorecard of performance measurement it makes available to customers.

Source: Carbon Positive


Plantation Energy Australia signs first Asian export deal

A landmark, AU$70 million supply agreement has been signed between Plantation Energy Australia and the Japanese company, Mitsui & Co. This four-year deal will see the manufacture and export of Australian energy wood pellets to Mitsui, one of Japan’s largest and oldest trading companies.

"Plantation Energy is delighted to conclude this off-take agreement with such a strong counterparty as Mitsui. Not only does it secure the long term future of Albany production, it also provides a secondary market to Plantation Energy's existing European business and brings the company one step closer in its plan to expand production to facilities in Victoria and South Australia," said Bob Warburton, chairman of Plantation Energy.

"Mitsui believes wood pellets will play an increasing role in both Japan and the rest of Asia as companies take a portfolio approach to meeting their emission targets," said Yukio Takebe of Mitsui. "The market for wood pellets in Japan is forecast to grow rapidly over the next five years and we are pleased to be able to turn to Australia to meet the market's needs."

Energy wood pellets, made using harvest residue from sustainably managed plantation forest, is a carbon neutral fuel source used widely throughout Europe. Global demand for pellets is expected to reach 30 million tonnes in 2015, up from just over 12 million tonnes in 2009. Read More Here




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...and one to end the week on...show him the card

A Department of Water Resources representative stops at a Longreach farm and talks with an old farmer. He tells the farmer, I need to inspect your farm for your water allocation.

The old farmer says, Okay, but don't go in that field over there.
The Water representative says, 'Mister, I have the authority of the Federal Government with me. See this card? This card means I am allowed to go WHEREVER I WISH on any agricultural land. No questions asked or answered. Have I made myself clear? Do you understand?'

The old farmer nods politely and goes about his work. Later, the old farmer hears loud screams and spies the Water Rep running for his life and close behind is the farmer's bull. The bull is gaining with every step. The Rep is clearly terrified, so the old farmer immediately throws down his tools, runs to the fence and yells at the top of his lungs.....

'Your card!............. Show him Your card!

And one more....A mate of mine has ‘acquired’ (Don’t ask questions) some i-pads, 5 in total. I’ve taken one for my own use so that leaves 4 to go to whoever gets in first. The first 4 replies - can have one if you pay for the postage. Photo of the i-pad model is below. A real bargain....so get in quick!! SCROLL DOWN!!

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

Brent Apthorp
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

This week's extended issue, along with back issues, can be viewed at www.fridayoffcuts.com

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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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