WoodWeek – 26 May 2010

This week we have for you:

• Contractors' Key Indicators
• Calling All Women in Forestry in Northland
• Forestry Queensland Sold to Hancock
• New Sawmill Operation for Milton
• Global Pulp Prices Peak
• Gunns Sells Native Forest Blocks
• Gunns Customers Achieve FSC Certification
• Canadian Forest Groups Agree on Reduced Harvesting
• Indonesia to Sign Forest Deal with Norway
• Buy and Sell
• ... and finally ... a Note from the Men this week

Contractors' Key Indicators

Check out the latest changes in diesel prices, interest rates and exchange rates on both sides of the Tasman in this week's Key Indicators.

NZ CONTRACTORS' KEY INDICATORS 26th May 2010
Interest Rates		Diesel Price Watch
	90-day bill rate = 2.90%		Average (excl GST / all regions) = $1.06
Exchange Rates			Change (month) = -2%
	NZD/USD = 0.6702		Change(quarter) = +7%
	NZD/Yen = 60.41		Change (year) = +16%
Labour Cost Index - Ag/Forestry/Fishing		Consumer Price Index
	Mar 10 quarter = 1008		Mar 10 quarter = 1097
	Change (quarter) =+0.2%		Change (quarter) = +0.4%
N/A	Change (year) = N/A*	NC	Change (year) = +2.0%

*Note:The LCI has been re-expressed on a June 2009 quarter base (=1000).

AUSTRALIAN CONTRACTORS' KEY INDICATORS 26th May 2010
Interest Rates		Diesel Price Watch
	90-day bill rate = 4.81%		VIC (excl GST) = $1.11
Exchange Rates		NC	NSW (excl GST) = $1.12
	AUD/USD = 0.8178		TAS (excl GST) = $1.19
	AUD/Yen = 73.39	NC	SA (excl GST) = $1.15
Wage Price Index - All Industries		Consumer Price Index
	Mar 10 quarter = 103.6		Mar 10 quarter = 171.0
	Change (quarter) = +0.9%		Change (quarter) =+0.9%
	Change (year) = +2.5%		Change (year) =+2.9%

Calling All Women in Forestry in Northland

The first Network for Women in Forestry regional meeting is being held on Friday 28 May 2010 at the Kingsgate Hotel Whangarei, commencing at 4pm. The evening will give ‘Women in Forestry’ an opportunity to meet the committee & other like minded forestry women in their region. The evening will conclude with a dinner and networking.


Please encourage the ‘Women’ in your organisation to become involved. For further information contact:

• Damita Pearse - damita.pearse@gmail.co.nz
• Sonya Elmiger - sonya@blackburnegroup.co.nz
• Glennys Mold - mold1@vodafone.co.nz

Your committee comprises; Damita Pearse, Sonya Elmiger, Glennys Mold, Rona Wheeldon, Wendy Mickleson, Tracey Anderson, Kellie Hahn & Jill Mitchell

The group have agreed to the following objectives:
1. Facilitate a regional meeting at Whangarei on 28 May 2010,
2. Facilitate a regional meeting at Rotorua on 25 June 2010,
3. Facilitate a regional meeting at Nelson (date to be confirmed),
4. Facilitate a national meeting in conjunction with the FICA Annual Conference 12/13 October 2010,
5. Develop a regular E-Newsletter, and
6. Develop a website.

Forestry Queensland Sold to Hancock

Late last week the Queensland government announced the sale for $603 million of the Forestry Plantations Queensland (FPQ) plantation assets to Hancock Queensland Plantations (HQP) a new company managed by Hancock Timber Resource Group (HTRG). HTRG manages on behalf of institutional investors and has more than 2 million ha of timberlands (worth approx. US$8.5billion) across the US, Brazil, Canada, New Zealand and Australia.

The sale price was above the Queensland government's original expectations. HQP has won the right to grow and harvest the trees through the purchase of a 99 year licence. The sale also includes 35,000 ha of freehold land and provision for the establishment of 20,000 hectares of hardwood plantations by 2025 under an existing agreement. The remaining Crown land will remain Government-owned. A3P welcomes the announcement of HQP purchase of FPQ and is encouraged by the continued investment interest (international and domestic) in quality Australian forestry assets. A3P will continue to engage with Governments and stakeholders at all levels about the urgent and ongoing need for investment in expanding Australia’s plantation resource and replanting following harvest. The current investment environment is very competitive but plantation based investments provide real opportunities to expand and diversify regional economies in a sustainable manner.

New Sawmill Operation for Milton

A multimillion-dollar expansion of Southern Cross Forest Products Ltd is about to lead to the construction of what might well be one of New Zealand's highest-producing sawmills in the small South Island town of Milton. The expanding mill operation was announced at the Otago Careers Festival by Business Development Manger Mark de Lautour. An exact site is yet to be confirmed, but the company hopes to open the mill in the middle of 2011 and construction is expected to start within the next two months.

Operations at the new plant will be automated and controlled by computers, but Mr de Lautour said the new mill could employ up to 40 people. The expansion would also create employment in the local trucking and shipping industry. Initially about 500m³ of timber a day will be milled, however, Mr de Lautour said the mill was designed to handle double that amount...MORE>>

(Source: Otago Daily Times)

Global Pulp Prices Peak

Wood fibre prices for the global pulp industry have risen 11%, reaching prefinancial crisis levels in the 1Q/2010, reports the Wood Resource Quarterly.

Wood fibre costs for the global pulp industry have been in an upswing the past year and are currently at their highest levels since the beginning of the financial crises in late 2008. The cost of wood accounts for about 55 percent of the total production costs when manufacturing pulp, so it is the one cost component that often decides a pulp mills competitive advantage in the global marketplace.

The Softwood Wood Fibre Price Index (SFPI), which is based on wood costs in 16 regions in the world, increased for the fourth consecutive quarter reaching US$99.55/odmt in the 1Q/10, as reported in the Wood Resource Quarterly (WRQ). The Index was up 1.2% from the previous quarter and 11.9 % higher than the same quarter last year. Softwood fibre price adjustments in individual markets were mixed, with the highest increases occurring in the US South, Western Canada, France and Russia, while prices fell the most in Finland, Spain, Chile and Brazil.

Gunns Sells Native Forest Blocks

Gunns Ltd in Australia is selling 28,000 hectares of native Tasmanian forest in what has been described as one of the largest offerings of land in the state's history, The Mercury reported on 15 May.

In a recent market update, Gunns said the 28,000 hectares represented most of its native forests. Gunns' CEO Greg L'Estrange said the native forest blocks are surplus to the company's requirements as it moves to a plantation-based business, the Australian Broadcasting Corp. (ABC) reported on 17 May.

Agents Harcourts Rural Tasmania will offer the 106 blocks at a minimum of 80 hectares. The blocks average about 264 hectares, according to advertising. Launceston real estate agency Harcourts will auction the sites beginning in June. Harcourts Rural Director John Hewitt said he believes the sale is one of the largest land offerings in Tasmania, ABC reported.

(Source: www.forestweb.com)

Gunns Customers Achieve FSC Certification

Gunns’ major Japanese customers including NPI, Oji, Chuetsu and Itochu (Marusumi) have been granted FSC “Controlled Wood” status for woodchip grades supplied to them from specified areas from Gunns in Tasmania. Gunns CEO Greg L’Estrange said “This is a great outcome for the business, our stakeholders and the environment. ”He added “it is also encouraging to see our Japanese customers attain FSC Controlled Wood Status for woodchips supplied by Gunns.” “Certification provides certainty to consumers about the source of their wood products. Being independently audited by certifying bodies on a continuous basis demonstrates commitment to the responsible, sustainable management of forestry operations and the environment. It invites independent scrutiny of all aspects of the business in a completely open and transparent way.”

In other developments Gunns has also finalised negotiations for pricing its hardwood woodchip supply to the Japanese market. The price for eucalyptus, mixed-grade woodchips for the 2010 calendar year has been set at $189.50 per bone-dry metric ton (BDMT). This is a decrease of a mere $1.00 per BDMT from the 2009 price.

Canadian Forest Groups Agree on Reduced Harvesting

Last week 21 member companies of the Forest Products Association of Canada (FPAC), and nine leading environmental organizations, unveiled an unprecedented agreement – the Canadian Boreal Forest Agreement – that applies to 72 million hectares of public forests licensed to FPAC members. The Agreement, when fully implemented, will conserve significant areas of Canada’s vast Boreal Forest, protect threatened woodland caribou and provide a competitive market edge for participating companies.

Under the Agreement FPAC members, who manage two-thirds of all certified forest land in Canada, commit to the highest environmental standards of forest management within an area twice the size of Germany. Conservation groups commit to global recognition and support for FPAC member efforts. The Agreement calls for the suspension of new logging on nearly 29 million hectares of Boreal Forest to develop conservation plans for endangered caribou, while maintaining essential fibre supplies for uninterrupted mill operations. “Do Not Buy” campaigns by Canopy, ForestEthics and Greenpeace will be suspended while the Agreement is being implemented.

“The importance of this Agreement cannot be overstated,” said Avrim Lazar, President and CEO of FPAC. “FPAC member companies and their ENGO counterparts have turned the old paradigm on its head. Together we have identified a more intelligent, productive way to manage economic and environmental challenges in the Boreal that will reassure global buyers of our products’ sustainability. It’s gratifying to see nearly a decade of industry transformation and hard work greening our operations, is culminating in a process that will set a forestry standard that will be the envy of the world.”

Environmental groups, including the three organizations that have been mobilizing large customers towards green products, say the coming together of two traditional adversaries reflects a new commitment to a common goal.

(Source: Forest Prod Assoc of Canada)

Indonesia to Sign Forest Deal with Norway

Indonesia and Norway are expected to sign a $1 billion agreement on the forestry sector at a two-day meeting in Oslo this week, said a senior Indonesian government official. The Oslo Climate and Forest Conference, to be held on Wednesday and Thursday, is expected to be attended by at least 10 heads of states from countries with rain forests. The conference aims to come up with a nonbinding framework on the UN-backed carbon trading mechanism known as REDD (Reducing Emissions from Deforestation and Forest Degradation). The framework will be called REDD-plus Partnerships.

President Susilo Bambang Yudhoyono will co-chair the Oslo meeting. “The Oslo meeting is a very important step in realizing all the promises that have been made by [developed countries] and to sort out how the financing will be determined,” said Liana Bratasida, the environment minister’s assistant for global environmental affairs and international cooperation.

Liana said $3.5 billion in funding had been promised to rain-forest countries by Norway, Australia, France, Japan, the United States and the European Union. She also said the REDD-plus Partnerships that were expected to be launched at the meeting in Oslo would represent a major breakthrough in climate change negotiations. “If this can move forward then it might push other negotiations to move forward also,” Liana said of the new framework. Environment Minister Gusti Muhammad Hatta said the Oslo meeting would benefit Indonesia because Norway’s promised funding would boost optimism that the country could reach its emission cuts targets.

Indonesia last year made a voluntary pledge to cut its emissions by 26 percent by 2020 and by up to 41 percent if assisted with international funding. “If we get the funding from Norway, we will channel it for activities on peatland areas, considering that these areas have a bigger impact [in the release of more carbon dioxide],” Gusti said.

Buy and Sell

... and finally ... a Note from the Men this week

Dear Wife/Sweetheart/Girlfriend/Partner/etc >>> SOCCER WORLD CUP 2010 South Africa
1. Between 11 June and 11 July 2010, you should read the sports section of the newspaper so that you are aware of what is going on regarding the World of Soccer, and that way you will be able to join in the conversations with me at the time. If you fail to do this, then you will be looked on in a bad way, or quite possibly, be totally ignored. DO NOT complain about not receiving any attention during this time.

2. During the World Cup the television is all “mine” at all times, without exception. If you even take a glimpse of the remote control, you will lose it (your eye that is).

3. If you have to pass by in front of the TV during a game, I don’t mind, as long as you do it crawling on the floor and without distracting me.

4. During the games I will be blind, deaf and mute, unless I require a refill of my drink or something to eat. You are out of your mind if you expect me to listen to you, open the door, answer the phone, or pick up the baby that just fell on the floor … it just won’t happen.

5. It would be a good idea for you to keep 2 x 6 packs in the fridge at all times, as well as plenty of things to nibble on, and please do not make any funny faces to my friends when they come over to watch the games. In return you will be allowed to use the TV between 12am and 6 am unless they replay a good game that I missed during the day.

6. Please, please, please!!! If you see me upset because one of my teams is losing – DO NOT say “get over it … it’s only a game,” or “don’t worry they’ll win next time.” If you DO say these things – you will only make me angrier and it is quite likely I may love you less. Remember, you will never know more about football than me and your so-called “open words of encouragement” will only lead to break-up or major marital disharmony.

7. You are welcome to sit with me to watch one game and you can talk to me during half–time but only while the commercials are on and only if the team I am following is winning. Please note I said “one game”, hence do not try to use the World Cup as a cheesy excuse to spend more ‘quality time’ together.

8. The replays of EVERY single goal of EVERY single game are very important – I don’t care if I have or have not seen them – I want to see them as many times as possible!

9. Tell your friends – NOT – to have any babies, or any other child-related activities or gatherings that may possibly require my attendance because it is quite possible that one of the three outcomes will occur:
a) I will not go, or
b) I will not go, or
c) I will not go.

10. On the other hand if either any of your friends or mine invite us to their house to watch a game – we will be there in a flash!

11. The daily World Cup highlights show on TV every night is just as important as the games themselves. Don’t even think about saying “but you have already see this… why don’t you change the channel to something we can ALL watch” because the reply will be “refer to Rule #2 of this list”.

12. AND FINALLY … please save your expression “thank God the Cup only comes around every 4 years”, as I am immune to these words because before and after this comes the Champions league, Premier League, Italian League, Spanish Leagues, KPL, FA Cup, Euro Cup.

PS - If you happen to breakdown or get stuck on the road somewhere during this time, please be considerate and just call the AA or the police.

And on that note, enjoy the rest of your week. Cheers.

John Stulen
Innovatek Ltd Rotorua Office
PO Box 6160
Rotorua 3043
New Zealand

Ph:+64 7 921 1382
Fax:+64 7 348 1420
Web page: www.innovatek.co.nz

This week's extended issue can be viewed at www.woodweek.com