WoodWeek – 10 September 2014

Click to Subscribe - It's FREE!

Greetings from your WoodWeek team. This week we have logging export and business updates for you for both New Zealand and Australia. Also, there will be widespread concern among forestry people as the case proceeds in Levin, following the Police laying charges in the case that caused Lincoln to die while tree-falling. It appears that close communication between WorkSafe NZ and Police has resulted in this unprecedented action. At this point no one outside of the case can speculate on how or why this has taken place until the judicial processes have been carried out.

Moving to the markets, on the export front there seems to be some small recovery in prices, yet volumes and inventories in Chinese ports remain stubbornly high. Pruned log prices in China have moved up by 5% on average for the month to August. Meanwhile, closer to home, sawn timber use in NZ is estimated to be increasing, at the expense of exports. Looking to broader economic news, many will be pleased to see the New Zealand dollar weakening in value against all our major trading partners in August.

In Australia there is good news in the re-building of their forest industry with New Forests making another purchase announcement. This week, New Forests is launching Forico Pty Limited, an integrated timber plantation, forest management and timber export business based in Launceston, Tasmania. The announcement comes as New Forests and KordaMentha, receivers of Gunns Ltd, have now completed the sale of the ex-Gunns Tasmanian forestry estate.

In the mix of wood and politics, the plot continues to thicken with National announcing one sum for afforestation while announcing a ten- fold greater sum for farmers to mitigate some pollution. Not hard to see where they see the voting power. New 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 is not happy with the farming handouts, while 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.

Meanwhile, in Australia, separate amounts of government spending in Tasmania and South Australia will be welcomed by industry participants there.

Finally, the release of the full technical conference programme for ForestTECH this year is complemented by further good news for those planning to register. 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.

Subscribe a friend | Unsubscribe | Advertise Here
Share |

This week we have for you:

Recent Comments

Surprise as Levin police lay charges

Police in Levin have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013.

The 46-year-old Horowhenua man was arrested and charged today and will appear in the Levin District Court on Thursday 4 September, 2014. The man has also been charged with serious workplace health and safety charges by WorkSafe NZ.

Mr Kidd and his colleagues were felling trees on a forestry block on State Highway 1, near Levin, when he was struck by a falling tree.

Detective Sergeant Peter Vine of the Levin CIB says: "There have been investigations by WorkSafe NZ and Police that involved an extensive inquiry phase and a large number of witness statements were taken, and legal advice was sought."

"Throughout this process we have remained in frequent contact with Mr Kidd's family and we have met with them recently to communicate the next steps in our investigation."

As the matter is before the court Police has no further to comment to make at this stage.

To read more about the action being taken in this case click here

"Arrest a surprise" - to read more click here

Sources: Various

Comment on this story    

ANZ Commodity Price Index

The ANZ Commodity Price Index recorded its sixth consecutive monthly decline, falling 3.3% in August (-7.2% y/y). The latest monthly percentage decline is the second largest of the past six months and takes the index back to a 17-month low, 12% below the all-time peak measured six months earlier.

Dairy prices were unambiguously weaker in August, with three dairy product prices recording a double-digit percentage falls. Whole milk powder prices led the decline, falling 15% from July. Skim milk powder prices posted a 13% fall and butter prices dropped 10%. Cheese prices fell 9% and casein prices dipped modestly (less than a 1?4 of a percent). Other price declines were registered for pelts (down 5%), apples (-4%), kiwifruit (-2%) and sheepmeat (-1%).

It wasn’t all one-way traffic, however. Beef prices lifted 13% in the month, setting a new record high. Aluminium prices increased 4% to an 18- month high and wool prices recovered 2% from a dip last month. The prices of seafood, wood pulp, sawn timber, logs and venison were all unchanged in the month.

The meat sub-group has posted its eighth successive monthly increase and aluminium prices have risen for each of the past three months. At the other extreme, dairy prices have fallen for a sixth consecutive month, with the dairy sub-group falling to a 23-month low.

The New Zealand dollar weakened in value against all our major trading partners in August. This had a dampening influence on commodity prices, once converted to the local currency. Consequently, the ANZ NZD Commodity Price Index eased just 0.4% in August (-12.5% y/y), with prices 17% below their March 2011 peak.

Comment on this story    

NZ Log Prices

In-market log prices have stabilised in China, with A-grade log prices currently sitting at US$125/JAS, up from US$120/ JAS a month ago. Agrifax’s average for the past month is US$123/JAS, which reflects the fact that prices fell lower during the month, but have now bumped back up. Pruned log prices in China have moved up by 5% on average for the month to August.

Despite earlier reports of inventories starting to decline, further deliveries of NZ logs that were held back on NZ ports have meant that supply is still exceeding consumption in China. Various reports on inventory levels put the total at 4.5-5 million tonnes on ports, though there may have been regional declines in some areas offset by larger deliveries to other ports. However, the decline in deliveries does appear to have done enough to restore confidence that the lower price will correct supply in the market. With prices bouncing off the bottom in August it’s widely suggested that the low point has now been found, and prices will slowly recover from here.

The major barrier to recovery for in-market prices in China continues to be the high inventories and an increase in inventories in July is a setback. This not only pushes out the recovery by a month, but the volume added to inventory in July will likely take more than an extra month to clear. Overall the Agrifax Log Price Indicator was up by less than one point in August, which arrested four months of consecutive drops. Slight rises in export log prices was the turning point for the indicator, and offset the slight declines in domestic structural log prices.

Freight and foreign exchange movements helped returns at the wharf-gate for NZ exporters, and in-market log prices are now expected to have found the bottom of their fall and moved back up slightly during August. However, ports in China still have very high inventories which are reported to have climbed during July. This means that although supply is correcting downwards to the new prices, inventories may take longer than expected to decline back to normal levels.

Sawn timber use in NZ is estimated to be increasing, at the expense of exports. With building consents continuing to climb, demand for sawn timber during summer is expected to increase. This suggests that structural logs will continue to be in high demand and with harvesting declining there may be pressure on prices for the fourth quarter.

The Agrifax log price data is a weighted average of prices collected each month from a range of New Zealand log buyers and sellers. Log prices shown in the table will vary regionally and by supplier and should only be used to provide a broad trend of log price movements.

Comment on this story    

New Forests launches 'Forico'

New Forests today announced the launch of Forico Pty Limited, an integrated timber plantation, forest management and timber export business based in Launceston, Tasmania. The announcement comes as New Forests and KordaMentha, Receivers of Gunns Ltd, have now completed the sale of the ex-Gunns Tasmanian forestry estate.

Forico has been established to manage the 175,000 hectare freehold forestry estate as well as affiliated operations. Forico’s plantation estate includes 100,000 hectares of sustainable timber plantation, primarily Eucalyptus nitens located across Tasmania, and also includes a nursery, two woodchip mills and a wood fibre technology laboratory. Forico will initially have 35 staff and will manage an integrated operation from nursery production of seedlings to plantation establishment and management and ultimately to woodchip production and sales.

“Forico will be a leading Tasmanian business in plantation forestry,” said David Brand, CEO of New Forests. “We see the opportunity for the Tasmanian plantation forestry sector to be a sustainable, internationally competitive industry, and we will invest in the business to increase productivity and efficiency and to support innovation.”

Forico will be led by CEO Bryan Hayes, who brings a wealth of experience in hardwood plantation management and in the hardwood woodchip export markets. Mr Hayes commented, “Today is a day for celebration, and we believe Forico’s launch and business model will be a step change for plantation forestry in Tasmania. Forico brings a focus on privately-owned, high-quality plantation forests and is fully capitalised without debt. Our focus will be on value creation for our owners and the communities in which we operate – to support this we will seek to meet the highest environmental standards and certification.”

New Forests now manages over AU$2.5 billion in institutional capital invested across more than 500,000 hectares of forests, rural land, and conservation investments. The company’s investments comprise the largest Australian timberland investment portfolio as well as the Timberlink Australia processing business and timberland and conservation investments in Southeast Asia and the United States.

“Our clients are attracted to owning timber plantations because these assets offer attractive total returns from a combination of cash yield from timber sales and capital appreciation from biological growth,” explained Dr Brand. “As long-term investors our clients seek not only financial returns, but also want to support companies that establish positive community relations as well as being a good employer and having strong relationships with contractors and other local businesses.”

About New Forests - New Forests (www.newforests.com.au) is a sustainable real assets investment manager offering leading-edge strategies in forestry, land management, and conservation. Founded in 2005, they offer institutional investors targeted opportunities in the Asia-Pacific region and the United States and have over AU$2.5 billion in assets under management. New Forests’ clients include pension funds, superannuation funds, and other institutional investors. The company is headquartered in Sydney, Australia with offices in Singapore and San Francisco.

Comment on this story    

New planting support welcomed in NZ

National’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.

Comment on this story    

ForestTECH 2014 Update

New 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, tony.brown@fcnsw.com.au to register. Participants will need to bring their own Windows laptop to run LAStools. Information about LAStools can be found by clicking here.

New Zealand:

(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 event. At this stage with the interest already generated, best register early to avoid missing out.

Comment on this story    

NZIF criticises planned dairying payments

New 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."

He added, "Do foresters, who are just another land user like farmers, 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 labelled the policy, "A National Party disgrace".

Comment on this story    

Australian log price index

The 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.

You can find more information attached here: June 2014 update of the Australian Pine Log Price Index.

Comment on this story    

Global competitiveness: NZ up; Australia down

New Zealand has improved its rank on the Global Competitiveness Index and extended the lead over Australia, according to an annual survey compiled by the World Economic Forum.

The country is now ranked 17th on the Global Competitiveness Index, up one place from last year when it broke into the top 20 for the first time. This is New Zealand’s highest position to date, and represents an overall improvement of eight places since 2012.

In contrast, Australia’s highly restrictive labour markets continued to drag on the country’s competitiveness ranking, which slipped one place to 22 - well short of the 15th position it occupied in 2009.

Dr Oliver Hartwich, Executive Director of the New Zealand Initiative – which helped compile the survey data – said the continued improvement reflected the strength of the country’s institutions and regulatory settings, particularly in the education, health and labour sectors.

“The investments that this country has made over time into things like the rule of law, property rights and flexible labour markets are paying dividends now, and the results can be seen in our high rate of GDP growth,” he said.

Hartwich said the report emphasised the need to continue investing in the factors that contributed most to business competitiveness, and not to take the complacent attitude to economic reform seen in Australia over the past few years.

“This country has huge economic opportunities sitting right on our doorstep with the emergence of Asian economies such as China, Indonesia and Malaysia onto the world stage,” he said.

“If we want to grasp these opportunities and improve the lives of everyday New Zealanders, we need to not only double down on the areas where we are strong, but also focus on where we are weakest, such as the quality of our business networks and infrastructure investment.”

Hartwich said a number of other factors could also boost the country’s competitiveness, such as unpicking the restrictions of foreign direct investment, freeing up capital for investment by tackling the housing affordability crisis, and reducing bureaucratic red tape.

The annual Global Competitiveness Report is compiled from 111 indicators, categorised into 12 pillars of competitiveness in four main sub-indices: basic requirements, efficiency enhancers, and innovation and sophistication factors.

The next most competitive countries were Switzerland, Singapore, United States, Finland, Germany, Japan, Hong Kong, Netherlands, United Kingdom, and Sweden.

To see the full report click here

Comment on this story    

Snippets - Gov't funds for Australian forestry

Money to stay in Tasmania forestry
$7m carrot to remain in forestry - Forestry workers in Tasmania will soon be given access to $7 million in Commonwealth Government handouts as an incentive to remain in the industry.

Resources Minister Paul Harriss yesterday announced Tasmanian harvesting contractors would be able to apply for a share of the money later this year to help grow their businesses and build capacity. The unspent cash is leftover from the previous government’s forestry exit package kitty.

"It’s not about getting people back into the industry," Mr Harriss said. "It is about those who are ready, willing and able to get on with business in a conducive ‘can do’ environment."

Forest Industries Association of Tasmania chief executive Terry Edwards said the money would not go a long way and needed to be spent wisely. Mr Harriss said other funding would also be made available for saw millers and residue processing.

To read the full story click here

Source: The Examiner


Timber industry urged to use partnerships funding to develop alternative products
The Institute of Foresters Australia says the local industry should use the latest round of South Australian Government funding to develop new and alternative products, such as bioplastics.

Applications for the remaining $10.46 million in the South-East Forestry Partnerships Program are now open.

President Rob De Fegley says it is important the industry looks to develop new markets and value add. He says there are number of opportunities that would be possible in the south-east.

"Biomass would be an immediate option but some of the more longer term and exciting products like the bioplastics, bio polymers, some of the biofuels, they're not immediately usable commercially but there's a lot of work being done around the world and Australia is certainly an option that could utilise some of these areas," he said.

He says the future of the local forestry industry, including greater export volumes, is promising. "Asia is running short of wood fibre because of the growth in China and also of emerging growth in India and the current suppliers to those markets are running out themselves," he said.

"There's been a significant transfer of forest areas in Malaysia and Indonesia into oil palms so those areas won't be able to continue to produce."

Click here to read more

Source: ABC News

Comment on this story    

Stora Enso wood to sugar plant for USA

Following its recent acquisition of the US-based biotechnology company Virdia, Stora Enso is investing EUR 32 million (NZD 503 million) in a demonstration and market development plant to be built at Raceland, Louisiana, USA.

The plant will be used for industrial validation of the newly acquired extraction and separation technology developed by Virdia that enables cellulosic biomass, such as wood or agricultural waste, to be converted into highly refined sugars. The investment serves the feasibility of the technology on industrial scale in the future, possibly also in some of Stora Enso’s existing pulp mills.

The demonstration plant will be located in the vicinity of existing sugar cane plantations and will use bagasse waste as feedstock. Sugar cane bagasse is a sustainable, non- genetically-modified feedstock that does not compete with food. It will be used to produce high purity five-carbon sugars and in particular xylose. These sugars will be converted and upgraded for applications in, for example, food and personal care.

Comment on this story    

The art of Coffee - Part 2 ...

A few more amazing works of art from Kazuki Yamamoto for you…
I especially love the second one!

Comment on this story    

... and finally ... farming funnies

A man was walking in the country when he saw a pig with a wooden leg sitting outside a barn. As he was wondering what happened to the pig, the pig's owner came along. The man asked the farmer how the pig came to have a wooden leg.

The farmer said, "Let me tell you, that is some pig! Our house caught fire last April and he dragged my kids to safety!"

"Is that how he lost his leg?" the man asked.

"No," replied the farmer. "But a month ago, I almost drowned and that pig swam through icy water to pull me to shore!"

"So that's how he lost his leg," the man asked.

"Oh, no. Just a week ago, my wife's car slid off the road onto the train tracks. That pig broke through the window and helped her out just as a freight train came through!" the farmer said.

"So THAT'S how he lost his leg!" the man said.

"No, sir," replied the farmer.

"Then HOW did he lose it?" the man begged.

"Well, sir," the farmer replied, "when you got a pig that terrific, you don't want to eat it all at once!"

Have a safe and prosperous week.

John Stulen
PO Box 1230
Building X91, Scion Campus, 99 Sala Street
Rotorua, New Zealand
Tel +64 27 275 8011
Web www.woodweek.com

Share |

We welcome comments and contributions on WoodWeek. 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.

Subscribe! It's Free!
Advertise Here
Copyright 2004-2014 © Innovatek Ltd. All rights reserved
Bookmark and Share