Friday Offcuts 5 September 2014
Whilst the panel deliberates, it was announced this week that someone’s being charged for manslaughter over the death of a young Levin man killed whilst working in a forestry block back in December of last year. As well as serious workplace health and safety charges brought by WorkSafe NZ, the arrest and charge being laid under multiple sections of the Crimes Act by the NZ Police is a first for the country - and another reminder of the absolute commitment to change and potential consequences of negligence by employers.
You’re spoilt for choice this week for analyses of log and lumber exports and pricing trends - both from New Zealand and Australia. For New Zealand, Statistics New Zealand reported this week that seasonally adjusted export volumes fell 5.3 percent for the June 2014 quarter, their largest fall since the March 2008 quarter. Wood volumes dropped by 8.3 percent. Forestry product prices in the quarter fell 6.5 percent (influenced of course by a large drop off in log prices).
These trends are picked up in the detailed New Zealand log and sawn timber export summaries produced by Champion Freight and the log export update from Agrifax (although it’s pleasing to see that the average at-wharf-gate prices for NZ logs have climbed by 4-5% in August). For Australia, stories and links are supplied this week to both the KPMG Australian Pine Log Price Index for the period January to June 2014 and URS’s June quarter 2014 Timber Market Survey which provides information on softwood and hardwood timber price movements in eastern Australia.
With promises flying thick and fast at the moment as the New Zealand election race becomes a lot closer than many were predicting a few weeks back, the National Party has promised NZ$22.5 million to resurrect the Afforestation Grant Scheme for another five years. It would provide grants of $1300 a hectare to establish new forests of between five and 300 hectares (but wouldn’t be available for replanting logged forests).
In Australia, the SA Government announced this week AU$10.46 million in grant funding as the second phase of its AU$27 million South East Forestry Partnerships Programme. This is a continuation of the State Government’s commitment to transform the industry, develop new markets, and secure jobs in the South East. It also builds on the work already being done with the Cellulose Fibre Value Chain Study looking at how to develop higher-value forestry products for the industry in the area.
Finally, a number of major activities around this year’s ForestTECH 2014 event in November were announced this week. Two comprehensive programmes for the Rotorua and Melbourne events have just been finalised, the opportunity of winning two $1800 Panasonic toughpads (one for each country) have been added as an extra bonus for those to registering before the early-bird finishes on 17 October and another half-day workshop has just been set up to run at the end of the Australian event, a ‘hands-on’ half-day practical workshop for users of LAStools will be run by Dr Martin Isenburg from the USA. Details are contained in the story below. Enjoy this week’s read – there’s certainly plenty there.
This week we have for you:
NZ$22.5 million to support new forest plantingNational’s Forestry Spokesperson, Jo Goodhew, has announced a re-elected National-led Government in NZ will invest NZ$22.5 million over five years to further encourage and support the planting of new forests. The Afforestation Grant Scheme (AGS) is a grant to help landowners to establish new forests of between five and 300 hectares.
“The scheme is projected to result in around 15,000 hectares of new forest being established. Much of this is expected to be on low-quality land not ideal for farming” says Mrs Goodhew.
The criteria for the new scheme will include:
- Individual parcels of land between 5 and 300 hectares per grant application
- Planting must be on land that is not already forestry land
- A flat grant rate of $1300 per hectare from one funding pool for all applicants.
- In return for a grant, grantees will forfeit carbon credits to the Crown for up to a decade.
“We expect the majority of people taking up this scheme will be farmers and other landowners wanting to diversify and better use marginal land,” says Mrs Goodhew.
“The grant will go some way to alleviating the start-up costs of new planting, but we expect grant recipients to meet the long-term costs associated with developing and sustaining a forest.”
Forest owners say the government’s decision to reinstate the Afforestation Grant Scheme will be welcomed by farmers and regional councils fighting soil erosion in steep hill country.
“In the five years in which the previous scheme operated, it was an important funder of plantings on land that is less than ideal for production forestry because of the very steep terrain,” says Forest Owners Association chief executive David Rhodes.
Second review of Forestry Tasmania plannedTasmania's publicly owned forest Management Corporation is set for its second major review in two years. The Tasmanian Government has commissioned yet another review of Forestry Tasmania two years after a previous review recommended the state-owned company be split in two. The review was buried deep in the budget papers handed down last week and did not include a cost figure.
Treasurer Peter Gutwein says it will be carried out by three government departments. "It's headed up by Treasury, DPAC and State Growth," he said. "The review will draw on any private company expertise that it might need."
The latest review comes just two years after a lengthy and expensive independent review conducted by URS recommended the company be carved up as it posed a risk to the state's budget. It predicted ongoing multi-million-dollar losses at the company. Mr Gutwein said another review is now necessary.
Source: 7 News
Manslaughter charge follows logging deathIn New Zealand, a Horowhenua man has been arrested and charged with manslaughter following the death of a man during a logging operation. Lincoln Kidd, 20, was killed on December 19, 2013, while he and colleagues felled trees on a forestry block on State Highway 1 near Levin. Police say he was struck by a falling tree.
Police announced on Wednesday that a 46-year-old from the Horowhenua had been charged with manslaughter. He also faced workplace health and safety charges by WorkSafe NZ. The 46-year-old was to appear in the Levin District Court yesterday. For further coverage of this story Click here and here.
New announcements this week on ForestTECH 2014New announcements this week on ForestTECH 2014 In last week’s issue we covered an array of other events (see below) being planned by resource foresters around the eagerly awaited ForestTECH 2014 event being run in Rotorua, New Zealand on 19-20 November and again in Melbourne, Australia the following week on 25-26 November.
This week the completed programmes for both countries were completed. Click here for full details on the New Zealand ForestTECH 2014 event or Australian ForestTECH 2014 event or check out the event website, ww.foresttech2014.com.
Even better, a special deal for those registering before the early-bird registration date of Friday 17 October will go into a draw to WIN an $1800 Toughpad. There are two on offer – a Panasonic FZ-A1 Toughpad in NZ and a Panasonic FZ-M1 in Australia.
Also confirmed this week, another half day workshop following the Melbourne event has been set up (see details below).
Events being planned around ForestTECH 2014.
(a) A practical half day workshop has been set up for Australian forestry companies to share information on research and the operational deployment of LiDAR and remote sensing into their own operations. This is being led by FCNSW, HVP, Forestry Tasmania, HQPlantations and the Canadian Forest Service and is planned to run on the second afternoon of the two-day Melbourne event on Wednesday 26 November.
(b) A ‘hands-on’ half-day practical workshop for users of LAStools will be conducted by Dr Martin Isenberg from the USA in conjunction with the ForestTECH 2014 Melbourne event. It will be held immediately following the ForestTech conference, on Thursday morning 27 November at the event venue, the Bayview Eden.
Dr Isenburg, who developed LAStools to process LiDAR point cloud data, has been sponsored through the FWPA project PNC305-1213 "Operational deployment of LiDAR derived information into softwood resource systems" and by Forestry Corporation NSW.
People interested in attending the half-day workshop should contact Tony Brown of Forestry Corporation NSW, email@example.com to register. Participants will need to bring their own Windows laptop to run LAStools. Information about LAStools can be found by clicking here.
(a) Cengea Solutions have planned a one-day workshop for their Australasian clients the day before the Rotorua conference, on Tuesday 18 November.
(b) The Interpine Group is running a LiDAR analysis introduction course to learn how to manipulate and utilise LiDAR datasets (with a specific focus on forestry derived outputs, such as terrain and vegetation surfaces, vegetation related metrics, through to extracting plot and tree level) the day after the Rotorua conference, on Friday 21st November. The practical workshop is aimed at building on the ForestTECH 2014 conference content. It will allow people to start using the technology and understand how to utilise the data. Participants will be using forestry specific LiDAR derived datasets in software such as FurgoViewer, Quick Terrain Modeler, LasTools, Fusion and ESRI ArcMap. Further details can be found by clicking here.
Last year we had over 400 attend the ForestTECH 2013 event. At this stage with the interest already generated, best register early to avoid missing out.
Kimberly-Clark Australia awarded for innovationKimberly-Clark Australia has been recognised as an ABA100 Winner in both Innovation and Technology categories in The Australian Business Awards 2014, acknowledging the company’s commitment to driving sustainable solutions within the manufacturing industry after the installation of an AU$33 Million cogeneration facility at Millicent Mill in South Australia.
Accounting for around 90% of KCA’s energy footprint, Millicent Mill is the home of KCA’s Family Care brands (Kleenex® Tissues, Kleenex® Cottonelle® Toilet Tissue, VIVA® Paper Towel) and Kimberly-Clark Professional products. To combat this, in the second half of 2013 KCA completed installation of an innovative cogeneration facility at Millicent Mill. By capturing the waste heat in the exhaust of the gas turbine and using it as a replacement for natural gas in paper drying and steam production, the mill benefits from lower energy consumption, lower energy costs and the overall environmental benefits of reduced carbon dioxide emissions.
One of four cogeneration facilities for Kimberly-Clark globally, the recovery and reuse of the waste heat sets a new benchmark for energy efficiency and is a technology first for the company globally. Jacquie Fegent-McGeachie, Associate Director Corporate Affairs and Sustainability said, ‘Providing 100% of the mills steam and 92% of the mills total electricity, the cogeneration facility is expected to reduce carbon emissions by up to 80,000 tonnes per annum – the equivalent of powering 36,000 average homes for a year”.
The Australian Business Awards are a national, all-encompassing awards program honouring Australia’s business, innovation and technology leaders through the recognition of their ground-breaking vision, innovative products and exemplary execution of projects, technologies, service, programs, systems and other initiatives.
Log export updateNew Zealand
Average at-wharf-gate prices for NZ logs have increased by 4-5% in the month to August. Due to the significant reduction in global log trade seen in the past quarter, there has been a $2/t drop in shipping prices. The drop in the NZ dollar has contributed about $5/t to the average wharf-gate price too, but this is likely to be muted in export returns due to exporters’ hedging cover. Average NZ prices for August are $80/t, up from $77/t in June.
Average pruned log prices have increased $6/t at the wharf-gate, as there is some recovery in the large drops seen last month. Some exporters maintained pruned log exports at relatively high prices compared with the drops seen in unpruned logs, as pruned logs typically are not as closely linked to the property market. Premiums opened up for treated pruned logs, as this time last year there were major problems with sap-stained logs. Average pruned log prices at the wharf-gate are down $30/t or 20% since March, while A-grade logs are now down $45/t or 36%.
For the second quarter exports to China declined 1% year-on-year, the first decline exports there for a quarter since Q1 2012, which was when exports were declining from the 2011 price peaks. Overall exports, however, were still up 3% year-on-year for the quarter, with increases of 8% and 14% respectively for exports to India and South Korea.
China China’s imports declined in the month to June, with an 8% decline month-on-month. Imports for the second quarter were up 4% year on year, which although still above a year ago is still a large decline in year-on-year growth, which had been above 20% for the past year. Total imports in June were down 16% from this year’s peak in March. Volumes from sources outside Russia, NZ and the Pacific North West are still well above year-ago levels. Second quarter volumes from Australia were up 71% year-on-year, and from all sources outside the top five volumes were up 59% year-on-year. These figures were, however, down from 97% growth and 101% growth respectively in the first quarter.
Many property market analysts suggest that while local governments are attempting to ease the decline in house prices, banks are less willing to lend into the property market. Local governments introduced many restrictions on home buying to try to curb speculation in China’s housing market and indications are that these are being relaxed. But, developers are reporting tighter credit lines. This can be seen in the total new loans made in local currency, which was down to 385.2 billion renminbi, in July, a drop of 64% on loans made in June, and 45% below a year ago. The new loans figure in July was the lowest it had been since December 2009.
Pacific North West
Log exports from the US have been relatively flat over the past year, and for the second quarter, China’s imports of US logs were down 1% year-on-year, likewise for Canada. This is a large turnaround in growth for China’s imports of Canadian and US logs, all four quarters of 2013 had growth of above 15% year-on-year from the Pacific North West, and in the first quarter of 2014 there was 26% year-on-year growth in China’s imports from PNW.
US domestic demand is increasing, however, and this has resulted in very large increases of lumber exported from Canada into the US. US lumber imports increased 12% year-on-year for the second quarter, most of it from Canada. The upshot of increased demand for lumber in the US is likely to be increased harvesting, potentially leading to greater production of export quality logs, as a by-product of the increased harvesting.
In the long term though Canada’s annual allowable cut is reducing year-on-year. British Columbia’s annual cut is currently just below 60 million m³, and will decline to just over 50 million m³ by 2020. Overall, this will be a 25% decrease between 2010 and 2020. The US annual harvest on the other hand, is likely to increase significantly over the next 5-6 years out to 2020. Most of the increase will be in the US south though, where the freight difference means higher prices are needed to get these logs to the Asian markets.
NZ ports logging healthy profitsPort of Tauranga, New Zealand’s pre-eminent freight gateway, has reported an improved financial result for the year to 30 June 2014 and a strong outlook following a successful year extending its freight catchment across the country.
EBITDA increased 5.5% to NZ$142.5 million from NZ$135.0 million as an increase in bulk cargo transported across the Company’s wharves offset a temporary decline in container volumes. Total cargo volumes rose 3.5% to more than 19.7 million tonnes from 19.1 million tonnes a year earlier.
Trade trends - Imports increased 6.4% to nearly 6.4 million tonnes from 6.0 million tonnes in the prior period. This increase was driven primarily by imports for the buoyant agricultural and construction sectors. Total exports rose 2% to 13.4 million tonnes from 13.1 million tonnes in the prior period driven by dairy and forestry exports.
South Port New Zealand, the Bluff port operator, lifted annual profit 2.7 percent to a record as increased volumes of stock food and logs drove cargo growth.
Net profit rose to NZ$6.68 million in the 12 months ended June 30 from NZ$6.5 million a year earlier, the Bluff-based company said in a statement. Trading revenue rose 6.7 percent to NZ$31.3 million on a record 2.72 million tonnes of cargo going through the port. Imported stock food volume was twice the 2013 level, while log exports were at a record 390,000 tonnes, it said.
South Port anticipates similar cargo levels in 2015, though forecasts a "slightly lower" annual profit in the 2015 financial year as global demand for dairy and forestry goods comes off the boil.
South Australia backs up forest industry supportThis week SA Forests Minister, Leon Bignell, announced AU$10.46 million in grant funding as the second phase of the AU$27 million South East Forestry Partnerships Program. Almost AU$17 million has already been distributed as part of the program. Applications for funding close on October 31.
The Australian Forest Products Association (AFPA) congratulated the South Australian Government for taking tangible action to contribute to the growth of a sustainable and productive forest, wood and paper products industry in the state. AFPA CEO Mr Ross Hampton said, ‘The continuation of this grants program meets a key election commitment by the South Australian Government to contribute on a dollar-for-dollar basis with industry to transform, be innovative, develop new markets, and secure jobs in the South East.
‘These grants and the Cellulose Fibre Value Chain Study demonstrate the commitment to a thriving forestry industry in the area and should stand as an example for both the Federal Government and other state governments as to how they can support and transform a positive, regional industry.
Australian log price index releasedThe Australian Pine Log Price Index for the period January to June 2014 has just been released by KPMG.
The Australian Pine Log Price Index (“the Index”) is compiled by KPMG using data provided by Australian softwood growers. The Index documents changes in pine log prices achieved by large scale commercial plantation owners selling common grades of plantation softwood logs to domestic processors.
KPMG updates the Index biannually, with the two reporting periods being January to June and July to December. The Index has a base period of January to June 1998. KPMG acts as the independent Index manager and collects confidential data on log volumes and stumpage values for all sales, including long and short-term contracts and spot transactions, at the end of each reporting period. Quantity information on export sawlogs and export pulpwood is also provided.
Please find attached the June 2014 update of the Australian Pine Log Price Index.
NZ log and sawn timber exports weaker in JulyChampion Freight has provided another monthly detailed analysis of NZ Log Export Statistics and NZ Sawn Timber Export Statistics.
For the month of July there was an overall decline of - 17%, (NZ$34 mln) in Log Export value when compared to July 2013. This was led by declines in export to China and South Korea partially offset by gains in India and Taiwan. Export value for 12 months to July 2014 remained higher by +30% (NZ$572 mln) when compared to the 12 months to July 2013, with positive gains across the top 5 export markets over the same period.
For the month of July 2014 there was an overall decline of -19% in Timber Export value when compared to July 2013, equivalent to around NZ$14.5 mln. This was led by declines in value of exports to China (-43%), South Korea (-39%), and Taiwan (-41%), partially offset by Europe, Japan and the US (+37%, 70% and +7% respectively).
For more information on the export statistics, click here.
Wood treatment & modification focus in SeptemberWood treatment and companies from throughout Australasia will be meeting for the first time in many years. The focus is the Wood Innovations 2014 event running in just over a week in Rotorua, New Zealand on 17-18 September and a week later, on 23-24 September in Melbourne, Australia.
Thermal and chemically modified wood along with wood plastic composites (WPC’s) are now a commercial reality. They’re being produced in commercial quantities in both Australia and New Zealand. They’re competing with traditional preservative treated wood products and are growing their place in the local market.
Along with changes in traditional chemical wood treatments, Wood Innovations 2014 will be providing local companies with an essential insight into global trends, issues and opportunities for growth in wood treatment and wood modification. Programmes for both events were sent out this week to industry and can now also be viewed on the event website. For your information, attached here is the NZ Wood Innovations 2014 and Australian NZ Wood Innovations 2014 programmes.
Check out both the NZ and Australian programmes on the event website, www.woodinnovations2014.com In addition to leading Australasian presenters, key international presenters include;
- Gary Converse, Senior VP, Osmose Inc, USA
- Hans Ward, VP, KopCoat, USA
- Dr Ed Suttie, Director, BRE Sustainable Materials (Co-ordinator Project PerformWOOD), UK
- Dr Tony Kelly, Business Director Europe, Africa and Middle East, Arch Timber Protection, UK
- Edward Pratt, Director of Business Development (Founder) Accsys Technologies, UK
- Duncan Mayes, VP R&D & Technology, StoraEnso Oyj, Finland
- Juan Bravo, International Technical Manager, Plastics, Struktol, USA
- Tam Tekle, President & CEO, Tekle Technical Services, Canada
Further details and registrations can still be made on www.woodinnovations2014.com
Latest Australian timber products pricing outMajor structural softwood timber prices in Australia have increased for the sixth consecutive quarter, while most hardwood flooring products recorded strong price growth over the six months to June 2014.
The latest edition of the quarterly Timber Market Survey (TMS) report has just been released for the June quarter 2014. The TMS provides comprehensive information on softwood and hardwood timber price movements in eastern Australia.
Prices for key structural softwood timber products MGP10 and MGP12 have continued to increase during the June quarter 2014, although price growth was more moderate than in the previous quarter and ranged between 0.9 percent and 1.4 percent. Softwood treated products produced mixed results with structural timber prices rising by around 3 percent, while outdoor timber prices remained relatively flat or showed only moderate growth. Prices for panel and engineered softwood products also increased in the June quarter 2014.
All hardwood flooring and joinery products monitored by the TMS have shown price increases over the first half of 2014. Once again, Victorian Ash and Tasmanian Oak flooring products have led the way with price increases ranging between 2.3 percent and 3.9 percent. Prices for structural hardwood products generally showed moderate increases over the six months to June 2014 with stronger growth being recorded in the highest strength grades.
Further information and the latest Timber Market Survey report is available by clicking here.
The TMS collects price data through quarterly surveys of a representative sample of timber market participants in eastern Australia. All quarterly TMS reports contain pricing information for softwood timber, panel and engineered wood products. The June and December quarter editions also include pricing information for hardwood timber products. The TMS is prepared by URS Australia Pty. Ltd. and funded by seven major Australian forestry organisations: Forestry Corporation of NSW, VicForests, Hancock Victoria Plantations, HQPlantations, ForestrySA, DAFF Queensland Government, and Green Triangle Forest Products.
NZ taxpayer awards the polluterNew Zealand's National party announced it will spend NZ$200 million of taxpayers and ratepayers money to buy stream side land on dirty dairy farms. The New Zealand Institute of Forestry has consistently demanded the Government stop paying the polluters to pollute however they continue to do so.
President of the NZ Institute of Forestry, James Treadwell said "We have achieved the utmost perversity if this policy comes into place. This National government has allocated taxpayer funds through the irrigation accelerated fund to promote irrigation schemes to intensify dairying. Then in a ridiculous attempt to ameliorate the damage caused by uncontrolled dairy intensification, now propose to use taxpayer and ratepayer funds to buy back stream margins to reduce the totally predictable pollution".
The President continued his criticism of the policy stating "this National government has endlessly used taxpayer money to alleviate the pollution of farming and now adds a further NZ$200 million of taxpayer and ratepayer money to preserve the tax free capital gains of dairy farmers."
Foresters voluntarily agreed to set back from rivers to ensure protection of water and aquatic environments many years ago. There has been no taxpayer funding to help with this. Forestry’s long run baseline nitrogen emissions are close to natural levels, sediment levels are well below pastoral levels, bacterial contamination is at natural levels and streams within forests harbour much native biodiversity. "The NZ Institute of Forestry is interested to know if the taxpayer will pay foresters if we choose to reverse our decision to set back from stream sides, and if not why not" asks Mr Treadwell.
Mr Treadwell stated "subsidies paid to farming by ignoring their pollution along with this NZ$200 million far exceeds the value paid to farmers of old in the form of Supplementary Minimum Prices and Marginal Land’s Board grants."
Do Foresters, who are just another land user like farming, operate in a parallel universe to farming - one a land of rules, consents, regulation and costs (regardless of justification), and the other a wonderful regulation free world where nothing can be allowed to impact the bottom line! Mr Treadwell called this policy "A National Party disgrace".
Sale to New Forests of 50,000 hectares approvedNew Forests Pty Ltd. now has court approval of its acquisition of 50,000 hectares of former Gunns Ltd. Australian hardwood plantation, The Examiner reported on 25 August. The plantations were part of managed investment schemes involving some 9,000 investors, who will now share more than AU$40 million, The Examiner reported.
A judge in Victoria approved the sale by Gunns’ receiver KordaMentha to Sydney-based New Forests, a timberland investment manager focused on the Asia-Pacific region and specializing in sustainable forest management and environmental markets, according to its website.
A spokesperson for the receiver, Michael Smith, said the court ruling gave certainty to the ownership of the trees. He noted that any potential buyer of the Tasmanian pulp mill site and permits not included in the New Forests deal now also knew whom they needed to negotiate with for timber.
KordaMentha has not given up hope of selling the Tamar Valley pulp mill assets—all that’s left of Gunn’s assets to dispose of--and Smith said negotiations with interested parties would start again in September.
Source: The Examiner
Sino-Forest high-profile fraud hearing to beginThe Ontario Securities Commission laid out its fraud case against collapsed forestry giant Sino-Forest Corp. and some of the company’s former key executives on Tuesday, as a hearing begins on the largest corporate fraud allegations to hit Bay Street since the Bre-X gold scandal.
The high-profile proceedings are a key test for the province’s financial markets regulator, as it takes on a murky and massively complex case that involves millions of documents and a tangled web of entities in China, where Sino-Forest claimed to control $3-billion worth of timber assets.
Ontario’s securities regulator has settled with a former executive of Sino-Forest Corp., the forestry firm that went bankrupt after a short-seller alleged it was a ‘Ponzi scheme.’ Andrew Bell reports David Horsley, the former chief financial officer of Sino-Forest, has agreed to testify in future hearings.
“It’s an important case. People are looking to the OSC to ensure that investor rights are being protected,” said Jonathan Ptak, a Toronto lawyer with Koskie Minsky LLP who acts for Sino-Forest shareholders in a $9-billion class-action lawsuit against the company, some of its former executives, and its Bay Street underwriters and auditors. The OSC’s Sino-Forest hearing is scheduled to continue until the end of June 2015. More >>
Buy and Sell
...and one to end the week on ... British humour
On a crowded train, travelling somewhere in Europe, a U.S. Marine
walked the entire length of the train looking for a seat before realizing that the only seat available was currently occupied by a well-dressed, middle-aged French woman's poodle.
And on that note, enjoy the upcoming weekend. Cheers.
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