Friday Offcuts 3 May 2019
From Launceston, Tasmania this week, the Coalition Government took their opportunity to appeal to voters and the forestry industry as part of a national live televised forest industries debate. They announced that if re-elected, that they’d be offering AU$500 million in low interest loans to plantation growers, that they’d be remove barriers to entry for plantations and farm forestry in the Emissions Reduction Fund and that the South West Slopes area of NSW, around Tumut and Tumbarumba, would be immediately added to the list of initial Regional Forest Industry Hubs. The AFPA plans to carefully weigh up the election promises around forestry and wood products and will be scoring each of the main parties before voters get to the ballot box.
This week President Xi Jinping confirmed that China had signed $64bn in deals at a Summit for the Belt and Road Initiative (BRI) that was being held in Beijing. China said that they’re committed to more sustainable financing standards following criticism that many of the BRI projects are going to leave host countries mired in debt. Changes were also promised to put to try and allay concerns around costs and possible corruption and environmental damage. This week – to put a forestry or lumber trade focus on the BRI we’ve included a recent article written by Jane Guo, the China Operations Manager for Forest Economic Advisors, which looks at the immediate implications to wood products trade through the BRI.
In this week’s issue, we’re also for the first time calling for Expressions of Interest to present at the annual forestry technology series, ForestTECH 2019. It’s going to run again in both New Zealand and Australia in mid-November. So, if you’re involved in forest resource monitoring, data collection, remote sensing, GIS, forest mapping or inventory management and are willing to share information on the development or refining of new technology around the collection, processing and management of forest resource data, we’d like to hear from you.
And finally, for all you kiwis out there heading out to your ponds and maimai’s this weekend for the opening of duck shooting season, let’s be careful out there. That’s it for this week. Enjoy this week’s read.
This week we have for you:
Carbon Farming Initiative water rule scrapped?A contentious rule preventing new forestry plantations will be scrapped by Labor if it wins the Australian election. Labor agricultural spokesman Joel Fitzgibbon said that, if elected, Labor would remove the Carbon Farming Initiative water rule, which is claimed to be preventing the establishment of new forest plantations.
The Emissions Reduction Fund currently excludes farm forestry projects where annual rainfall exceeds 400mm, ruling out key forestry regions. The Government is reviewing the so-called water rule amid lobbying from the Australian Forest Products Association and National Farmers’ Federation — both calling for commitments to remove the rule ahead of the election to encourage plantation investment, and boost carbon abatement efforts and lagging timber supplies.
The AFPA estimates Australia’s timber industry will need more than 400,000 hectares of new timber plantations over the next 10-15 years. AFPA chief executive Ross Hampton in a recent media release said Labor’s commitment would help trigger investment in the sector, particularly on farms.
“We have been blocked out of the carbon policies in Australia for the last 5-10 years and so we’ve been saying to the parties ‘come forward and say that these artificial impediments to farmers participating in the carbon market are going to be removed’.”
Mr Fitzgibbon said if Australia was to reach its carbon emissions targets, barriers to investment must be removed to encourage people to plant more trees. “A Labor Government will get rid of the so-called water rule as quickly as we possibly can because that restriction is holding both investment and jobs back,” Mr Fitzgibbon said.
Source: weekly times
Expressions of Interest – ForestTECH 2019ForestTECH is this region’s premier technology series. It’s run for Australasia’s forest resource managers, planners, inventory foresters and GIS and mapping specialists by the Forest Industry Engineering Association (FIEA). Since 2007, it’s the one event every year that focuses on this particular part of the forestry industry.
Forest owners, forestry managers, key researchers and technology providers now also pick up the opportunity of building in their own client meetings, workshops and discussion groups around the event.
Well over 250 delegates attended the ForestTECH series in November 2018. All of the major forestry companies in Australia and New Zealand were represented. With the technology series now well and truly making its mark on the forestry technology calendar, representatives from major Indonesian, Malaysian, South African and South American forestry companies also attended ForestTECH 2018.
The focus for ForestTECH 2018 was “unlocking the true value of data”. New systems for better measuring, managing and analysing this information were reviewed. Emphasis was also put on research findings and operational implementation of some of the key research findings from in-forest trials and the three-year, AU$1.8 million collaborative research project on remote sensing jointly funded by Forest & Wood Products Australia (FWPA), forestry companies, universities and government.
What’s planned for 2019?
Key themes for this year’s event will include;
- Storage, processing and management of "big data"
- The practical application of automation, robotics and sensors by forest managers
- Integrating virtual and augmented reality into forestry operations
- Results and lessons from reconciling remote sensing data into the field
- Satellite tools for mapping, planning and operations
- New innovations in mobile forest apps and collection tools
- Results from remote sensing research and in-forest trials
- Workflow solutions for data collected from airborne and UAV systems
- New mapping and GIS applications
- Changing skill sets required by today’s forest resource managers
At this stage, we’re now calling for early expressions of interest for presenting at this year’s November series. It’s planned to run in Melbourne, Australia on 13-14 November and then again in Rotorua, New Zealand on 19-20 November.
Further details can be found on the event website. Information on exhibition opportunities will be sent out in the next month or so. If interested in presenting this year, please contact the Programme Manager, email@example.com BEFORE Friday 24 May.
Caterpillar selling purpose-built forestry businessIn August 2018 Caterpillar Inc. announced plans to sell its forestry business to Weiler Forestry Inc. Caterpillar and Weiler have now entered into a definitive agreement to sell Cat’s purpose-built forestry business. The deal will close in Q3 2019.
In November last year, Gough Cat announced that they'd entered into an agreement with United States company Weiler Incorporated to distribute its forestry product line in New Zealand.
“We remain committed to supporting our forestry customers and the forestry industry,” said Ramon Younessi, Caterpillar Construction Industries Group President, in a statement.
“Caterpillar and our dealers have an established relationship with Weiler that spans many years. The process of developing this binding agreement has further enhanced our confidence in Weiler’s ability to deliver purpose-built forestry machines, while Caterpillar continues to offer forestry excavators and other core equipment, allowing the dealers to provide a complete product portfolio and the optimal solution for forestry customers.”
Among the core equipment Caterpillar will continue providing is forestry excavators designed for log loading, processing and other forestry applications. As part of the agreement, Weiler will acquire Cat’s purpose-built forestry product line, including wheel skidders, track feller bunchers, wheel feller bunchers and knuckleboom loaders. The company will also own Cat’s operations in LaGrange, Ga., Auburn, Ala., and Smithfield, N.C.
Once the deal is closed, Weiler Forestry will design and produce purpose-built forestry products, which will be available through the Cat dealer network.
Laminex Australia to restart productionLaminex Australia has unveiled an innovative business partnership to enable expansion of its South East Queensland manufacturing operations, whilst also securing 42 local jobs in Gympie by taking over the operation of a particleboard plant destined for closure.
A long-standing Australian manufacturer and trusted name in quality products and design, Laminex Australia has assumed control of the former Carter Holt Harvey particleboard plant in Gympie, which in February was confirmed it would close imminently under its prior owners.
A member of the Fletcher Building Group (ASX/NZSX: FBU), Laminex Australia will lease the manufacturing site from the Corbet family, who has taken ownership of the facility including surrounding land adjacent to the plant. Both business decisions will collectively achieve the benefit of ongoing sustainable land use, a continuation of local timber processing in Gympie and keeping dozens of regional manufacturing jobs at the site.
Laminex’s Gympie Monkland Manufacturing Plant which is now operational will conduct continuous timber processing, producing particleboard flooring to specifically support growing demand for this product in Queensland and other markets.
The company has offered 42 positions, many of which were former Carter Holt Harvey employees and contractors at the site, and the ready-to-go workforce has been inducted into Laminex’s operations. Laminex Australia will undertake new regional manufacturing activity and with support through the Queensland Government’s Jobs and Regional Growth Fund will maintain dozens of direct jobs that would have been lost.
Laminex Australia Executive General Manager, Justin Burgess, welcomed the targeted support provided by the Queensland Department of State Development for its Gympie operations. He said Gympie Monkland, its sixth Australian manufacturing site, would operate alongside Laminex’s Gympie Toolara plant, which processes medium density fibreboards.
He said both sites had a combined workforce of up to 300 people making Laminex Australia a top three employer across the entire Gympie, Wide Bay and Burnett region. “Today is a great step forward for the Gympie region and an exciting leap for the Laminex team,” Mr Burgess said. “It also importantly delivers a future expanded manufacturing footprint for us in South East Queensland and is a catalyst to pursue synergies and drive future growth”.
AU$500 million low interest loans to plant treesAt a national live streamed forest industries debate, hosted by the Australian Forest Products Association (AFPA) in Launceston this week, Senator Richard Colbeck, Assistant Minister for Agriculture and Water Resources, announced that a re-elected Coalition Government would provide AU$500 million in low interest loans to plantation growers.
Chief Executive Officer of AFPA Mr Ross Hampton said, “This is a very welcome development in this campaign. Both major Parties have agreed Australia needs 400,000 additional hectares of production trees over the next ten years, with plantings to be focused in Regional Forest Industry Hubs. However, the Parties have very different approaches to the mechanism to trigger those plantings.”
AFPA was this week highly critical of the Government ruling out removing the barriers to entry for plantations and farm forestry in the Emissions Reduction Fund (ERF). Labor has unequivocally said it would do this if elected.
Last night however the Government has put on the table its own plan for tree planting with a AU$500 million low interest loan promise. Mr Hampton said, “the Government has clearly acknowledged that having a Plan without a mechanism to prompt tree planting was inadequate – and that’s a great step forward. AFPA will analyse the AU$500 million low interest loan promise over the next few days to assess its effectiveness.
“The National Forest Industries Debate also saw the announcement by the Government that the South West Slopes area of NSW, around Tumut and Tumbarumba, would be immediately added to the list of initial Regional Forest Industry Hubs. The ALP announced yesterday that it would fund all 13 of AFPA’s proposed Regional Forest Industry Hubs, including South West Slopes in NSW and Southern Tasmania”.
“Both Parties also affirmed their commitment to rolling RFA’s with 5-year reviews. AFPA will be assessing all promises against the goals of our 20,000 jobs growth plan and scoring the Parties before polling day,” Mr Hampton concluded.
XLam closing its NZ operationsAfter months of deliberation and consultation, cross laminated timber company XLam yesterday confirmed fears it would close its New Zealand operations at Nelson.
A statement from the company said the operations are no longer considered commercially sustainable and that “a new business model” would “usher in a more commercially competitive and sustainable way for the company to supply CLT to the market.” Xlam said the move would allow more efficient servicing of demand for its product in New Zealand.
“As demand for off-site fabrication, mass timber construction and CLT continues to grow, so too does the XLam business, with a focus on improved customer solutions and increased manufacturing utilisation”.
Chief executive officer Shane Robertson said the decision followed an extensive business review of current operations. “The existing highly manual, capacity-constrained operation in Nelson has been confirmed to be commercially unsustainable for future CLT manufacture,” he said.
Future supply to New Zealand would be met from the company’s relatively new operations at Wodonga, with a staged closure at the Nelson plant over the next few months. The company will establish a new warehousing and distribution operation in the Waikato region, and new offices at Nelson.
It has also promised to keep all 37 staff members at Nelson employed “at least until July” with “emerging opportunities” in New Zealand and Australia offered first to current staff and at least some deployments already in place.
Source: The Fifth Estate
Focus on hauler guarding, noise and workplace facilitiesFocus on workplace facilities, noise and hauler guarding WorkSafe wants to bring to the New Zealand industry’s attention concerns that have come to light during visits by Inspectors to forestry harvesting sites in recent months. These concerns relate to the provision of workplace facilities, mobile plant noise and hauler guarding. WorkSafe has indicated that in future Inspectors are likely to take action when they come across these problems.
Hauler guarding: WorkSafe says Inspectors have observed that fall and entrapment guarding on haulers is sometimes missing or ineffective. In the past, the risks created by this ineffective guarding might have been managed with rules and procedures. However, WorkSafe indicates it doesn’t think this is sufficient and that mechanical or technological solutions should be put in place. It says Inspectors will have a particular focus on guarding this year.
Noise: WorkSafe says it has also observed situations where workers in cabs may be exposed to sustained noise levels sufficient to cause permanent hearing damage. It says forestry companies need to be sure that the equipment they are buying is safe in their operating environment under actual operating conditions. Exposure to noise, as with other exposures, needs to monitored, and where risks are identified they need to be dealt with.
Workplace facilities: WorkSafe says Inspectors frequently visit workplaces where workers have to eat or seek weather protection in fuel-soaked containers, where there is no drinking water or facilities to wash hands and where workers need to toilet behind a tree. WorkSafe says from July it will begin enforcing regulations requiring forestry companies to provide appropriate facilities for workers. It says it appreciates the challenges this can present in a forestry context and will work with companies to find pragmatic solutions. Some of these pragmatic solutions have been identified during Safetree Contractor Certification audits, and FISC will share these with the industry and WorkSafe.
Labor shifts position on forest policyLabor has shifted its position on forest policy, abandoning support for more native forest reserves, as it attempts to retain three under-siege Tasmanian marginal seats. The party amended its platform in December to “support the implementation of” the 2012 Tasmanian Forestry Agreement, which includes placing 356,000ha of forest in permanent reserves.
However, sections of the timber industry no longer support the detail of the TFA, also known as the “forest peace deal”, and have been lobbying Labor to guarantee “no more forest lock-ups”. Joel Fitzgibbon, Labor agriculture, fisheries and forestry spokesman, told The Australian that while still committed to the TFA objectives of consensus where possible between industry, unions and green groups, Labor did not support further reserves.
“Labor also believes that Tasmania has struck an appropriate balance between timber production and conservation of its forests through the years of negotiations leading up to the TFA,” Mr Fitzgibbon said. “As such, we do not support a Tarkine national park nor the transfer of any other timber production forests into reserves.”
Ross Hampton, chief executive of the Australian Forest Products Association, welcomed Mr Fitzgibbon’s pledge not to support further “forest lock-ups”. “If Labor was to be elected, we will absolutely be reminding them constantly of this commitment that’s now been given in relation to no more locking away of productive areas,” Mr Hampton said.
Labor is desperate to hold three marginal seats in Tasmania — Bass, Braddon and Lyons — where in the past further forest protection has not played well, overall, with voters. A uComms poll released this week, commissioned by the AFPA, shows 84.6 per cent of voters in Braddon support the timber industry as being important or very important. (provide link to media release sent out on Tuesday to relevant section on the AFPA website)
Source: The Australian, AFPA
North American sawmill profit margins fallLumber prices in North America continued their decline from the 3Q/18 with another quarter of substantial reductions. Average lumber prices for southern yellow pine were down 12% quarter-over-quarter in the 3Q/18, which was then followed by a reduction of 17% in the 4Q/18.
With practically no change in log or chip prices, gross margins, and the EBIDTAs, have plunged in the Southern states, after having reach a 13-year high in the 2Q/18, as reported in the latest issue of the WRQ. However, the region’s sawmill margins were still well above their ten-year average margin. With lumber prices continuing to decline faster than log prices in early 2019, profit margins have continued to slide in the 1Q/19.
Sawmills in British Columbia have also seen the prices for lumber in the US market come down substantially during the second half of 2018. Despite the weaker lumber market, sawlog prices still increased from the 3Q/18 to the 4Q/18 because of tighter supply and a rise in hauling costs. Sawmills saw their gross margins plunge to unprofitable levels and many companies decided to take market-related downtime in late 2018 and early 2019.
In Europe and Russia, market prices for lumber were much less volatile than in North America, with only small price adjustments from the 4Q/17 to the 4Q/18. Log costs were unchanged in Finland during most of the year, while the costs for spruce sawlogs in Sweden jumped in late 2018. Gross margins for sawmills in both countries are still at healthy levels and, in the 4Q/18, were close to the highest they have been in four years.
Sawmills in Siberia continue to expand exports to China with fairly stable lumber export prices the past three years. However, in the 4Q/18, lumber prices fell to their lowest level in almost two years. This occurred at the same time as sawlog costs remained unchanged from the previous quarter, resulting in reduced gross margins for many lumber producers at the end of 2018. Sawmill margins for 2018 were slightly below their five-year averages, but still higher than the average for the past 14 years.
Source: Wood Resources International LLC, www.WoodPrices.com
NZ forestry exports updateFrom the current market report entitled - 'Situation and Outlook for Primary Industries' published by the Ministry for Primary Industries in March 2019 comes this summary for forestry exports:
Total forest products revenue is forecast to reach NZ$6.8 billion for the year ending June 2019, an increase of 7.0 percent from 2018, based on strong growth in log export volumes. Much of this growth has come from increased Chinese demand for New Zealand logs, supporting both robust prices and near- record export volumes.
Log export revenue reached a record NZ$972 million for the December quarter, almost 2 percent up on the previous quarter and 6 percent up on the same quarter last year. As a result, the log export forecast for the year ended June 2019 has been revised upward to NZ$3.6 billion.
Demand is expected to remain steady over the next year, with an expected increase in Chinese residential construction despite a weakening Chinese economy.
There is also an expectation that China’s government will increase spending on infrastructure to help stimulate the economy. Any increase is likely to support demand as New Zealand logs are often used for boxing concrete.
China’s Belt and Road’s impact on lumber tradeAccording to trade data sourced from China Customs, China imported 36.8 million cubic metres of lumber in 2018, a slight decline of 1.6 percent from 2017. Of total lumber imports, softwood lumber accounted for 24.9 million cubic metres, a slight decrease of one percent compared to 2017.
However, Russian softwood lumber exports to China were a whopping 15.65 million cubic metres in 2018, an increase of 10 percent compared with 2017. This is more than double the exports in 2014 and now represents a 63% share of the China market. Clearly, China’s “Belt & Road Initiative” (BRI) was partly responsible for the increase in softwood lumber volumes from Russia to China.
The Belt & Road Initiative is a massive program that includes many large-scale infrastructure projects with other countries. Proposed by Chinese President Xi Jinping in 2013, the main purpose was to shift overproduction to inland regions, taking advantage of China’s lower labour costs and capacity. At the same time, it’s designed to improve the supply chains of key suppliers and to crucial export markets, improving the competitiveness of Chinese goods and raw materials.
In 2018, the number of operational China-Europe block trains (a rail cargo shipping method whereby all the storage cars are shipped from the same point and arrive at the same destination) had exceeded 6,363 (vs. 3,678 in 2017), running between 56 Chinese cities and 49 cities in 15 different European countries. Among these, 2,690 were return trains that shipped from Europe to China, a significant increase of 111% from 2017.
Currently, about 50 to 60 percent of total container transportation costs of China-Europe block trains are being paid through local government subsidies since the regular cost is still very high. This is partly due to the lower number of “return-block trains” (from Europe to China) versus “go-block trains” (from China to Europe). Therefore, the development of the return train is one of the key factors that will determine whether China-Europe block trains can finally operate without government subsidies. Russian lumber has been one of the most important products shipped on the return-block trains. From the central government’s plan, the subsidy mechanism is expected to be cancelled in 2020.
Gold does grow on treesWell, maybe it would be more correct to say that trees grow in gold. Forget your metal detector, the leaves have it! That’s the concept behind a mineral discovery technique we pioneered which is now being used successfully by gold exploration and mining companies.
Marmota Limited, a gold mining company working out of South Australia, recently reported they had identified new gold targets using biogeochemical sampling at their Aurora Tank prospect.
Put simply, biogeochemical sampling involves taking samples of vegetation, such as leaves from trees and shrubs, and testing the material for the presence of gold or other chemicals that often associate with gold, so-called pathfinder elements.
Using this form of sampling, Marmota Limited have found traces of gold in tree leaves, and used this information to guide their drill program, showing that gold can in fact grow on trees!
Gold in gums
Our original work in Kalgoorlie in Western Australia demonstrated how gum trees, growing above known areas of gold mineralization, had detectable gold particles in their leaves and branches. The trees deep root systems act like hydraulic pumps to bring tiny traces of metals from orebodies deep underground.
The metals particles taken up by the roots travel into the plant tissues of the shoots and leaves. Even leaves that are shed still hold trace amounts of the metal. Collecting and analysing the leaf material can reveal which areas of land contain deeper regions of gold mineralisation. The video below shows how this process works.
Treasure revealed in forests of gold
From our initial trials in Kalgoorlie, our researchers completed Australia’s biggest biogeochemical survey, creating a modern-day treasure map, sampling hundreds of eucalypts and mulga trees in the Northern Yilgarn Craton in Western Australia.
The Yilgarn Craton makes up most of the Western Australian land mass and is one of the oldest ancient landscapes preserved on earth. The Eastern Yilgarn is renowned for gold and nickel deposits yet the Northern area remains largely unexplored for new mineral discoveries.
We mapped 130,000 square kilometres of Australian bushland in the Northern Yilgarn – an area the size of Greece – looking for information about possible deposits of gold and a range of other economically valuable mineral commodities. We found positive results for specific metals and pathfinder elements which can now be used to pinpoint areas to explore.
Biogeochemical sampling works!
Along with recently reported successes by industry, we further validated our method using convergent data from our groundwater surveys. The biogeochemical survey in the Northern Yilgarn overlapped an area we had previously surveyed using groundwater sampling and showed matching results!
We found that areas where gold was detected in groundwater samples coincided with areas where we detected gold in the vegetation samples. Greenfield exploration (i.e. in areas with minimal or no previous exploration) is expensive and risky.
Our geochemical sampling technique is helping mineral exploration companies hone in on new targets for the next big discoveries.
Robots help build high-tech show homeETH Zürich’s high-tech show home has just opened its doors. The three-story DFAB HOUSE has been built on the NEST modular building platform, an Empa– and Eawag–led site of cutting-edge research and experimentation in architecture, engineering, and construction located in Dübendorf, Switzerland.
The 2,150-square-foot house, a collaboration with university researchers and industry leaders, is designed to showcase robotics, 3-D printing, computational modeling, and other technologies and grapple with the interconnected issues of ecology, economy, and architecture.
One of the central innovations is using robots that build onsite, rather than create prefabricated pieces in a factory. This In Situ Fabricator (IF) technology, an autonomous “context-aware mobile construction robot,” helps minimize waste and maximize safety during the construction process.
To generate concrete geometries not permitted by conventional construction techniques, such as curvilinear shapes that minimize material use, researchers devised a Mesh Mould technology that was built with the aid of vision system–equipped robots. In the DFAB HOUSE, the Mesh Mould is realized as a 39-foot wall, a main load-bearing component of the house, which is able to carry around 100 tons. Despite its complexity—it has 335 layers with over 20,000 welding points—the robot took just 125 hours to construct the mesh.
Cantilevered over the Mesh Mould is the so-called Smart Slab, a 3-D printed concrete formwork that supports the timber structure above. Many of the concrete forms in the home are built with what the researchers are calling Smart Dynamic Casting, an automated prefabrication technology.
Robotic prefabrication is also used to make the Spatial Timber Assemblies that comprise the upper two levels of the home. The timber structure was devised as part of a collaboration between the university, Gramazio Kohler Research, and ERNE AG Holzbau, who used computational design to generate timber arrangements to fit into the larger structure. The timber assemblies also permit the creation of stiff structures that don’t require additional reinforcement.
Buy and Sell
... and one to end the week on ... insights
According to most studies, people's number one fear is public speaking. Number two is death. Death is number two. Does that sound right? This means to the average person, if you go to a funeral, you're better off in the casket than doing the eulogy.
And on that note, enjoy your weekend. Cheers.
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.
Copyright 2004-2020 © Innovatek Ltd. All rights reserved