WoodWeek – 30 June 2010

This week we have for you:

• Contractors' Key Indicators
• Tasmanian Contractors Astounded at Log Export Criticism
• ACC Concerned with Farming Accidents
• Scion Going Through Top Level Changes
• Carbon Market Kicks Off Tommorrow
• Best Practise Guideline for Log Loading - Correction
• NZ Wood Pellets Approved to International Standard
• Finland Opens HUGE Biomass Power Plant
• John Deere Launches Biomass Website
• Kathmandu founder goes shopping at Gunn’s Auction
• Backlash to Canadian Boreal Forest Agreement
• Buy and Sell
• ... and finally ... details of the next SURVIVOR Series

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 30th June 2010
Interest Rates		Diesel Price Watch
	90-day bill rate = 3.13%		Average (excl GST / all regions) = $1.05
Exchange Rates			Change (month) = 1%
	NZD/USD = 0.7119		Change(quarter) = 1%
	NZD/Yen = 63.59	NC	Change (year) = +6%
Labour Cost Index - Ag/Forestry/Fishing		Consumer Price Index
	Mar 10 quarter = 1006		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 30th June 2010
Interest Rates		Diesel Price Watch
	90-day bill rate = 4.96%	NC	VIC (excl GST) = $1.13
Exchange Rates		NC	NSW (excl GST) = $1.11
	AUD/USD =0.8750	NC	TAS (excl GST) = $1.20
	AUD/Yen = 78.19	NC	SA (excl GST) = $1.12
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%

Tasmanian Contractors Astounded at Log Export Criticism

The Tasmanian Forest Contractors Association is astounded at the credence that uninformed comment has been granted in the comments about the forthcoming export of low-grade pine logs, from northern and north-western Tasmania.

The facts are:
These are logs that currently have no domestic market. Their harvest and sale, provides the opportunity to re-plant with stock more suited to future markets and hopefully, domestic value adding.

Their harvesting and export, is creating much needed work for contractors, and the service industries and suppliers that depend on them.

The fumigation of the logs is a requirement of the destination country. Many other countries also require similar quarantine measures, including Australia, as a measure to protect their indigenous environment. Further it is a process that is conducted daily in various parts of the state, without mishap.

The Australian Quarantine Inspection Service details the total Australian expected use of Methyl Bromide at 350 tonnes per annum. This makes a nonsense of some of the wild guesses, of up to 1.5 million tonnes of fumigant to treat this shipment. The amount used to fumigate this shipment is a very small percentage of that already used in Tasmania for treatment of a wide range of products both imported into the state and exported for valuable income to Tasmanian businesses. In addition, TasPorts has proposed a safety exclusion zone that is nearly 20 times required by the revised National code. Tasmanian Contractors support Forestry Tasmania’s efforts to achieve viable sales of its timber, to markets which potentially do not require fumigation. In the mean time, the protocols for fumigation are well understood, with the primary focus being on safety.

ACC Concerned with Farming Accidents

A farmer is killed every 28 days in farming accidents in New Zealand while a farmer or agricultural worker is injured every half hour, says the Accident Compensation Corporation (ACC).

According to ACC, 13 farmers died in accidents on New Zealand farms last year. There were 18,600 injuries on farms and the most common causes of injuries were poor handling of animals, quad bikes and farm machinery. Nearly 1700 farm workers injured by cattle last year cost the country nearly $6 million in ACC claims.

Otago University has forecast that in any given year farm workers will lose control of quad bikes on approximately 12,645 occasions, resulting in about 1400 injuries. Not all of these will be registered as workplace injury claims with ACC.

Tractor accidents are also causing concern with more than 300 people injured by being run over, rolling their tractors or being injured by an uncovered power take-off (PTO) shaft. ACC general manager Keith McLea said tractor, cattle and quad bike accidents cost New Zealanders $12.4 million a year in ACC claims alone.

ACC has produced three new safety booklets with useful tips on handling cattle, driving tractors and controlling quad bikes to help farmers avoid preventable injuries.

Scion Going Through Top Level Changes

The Chief Executive of Crown Research Institute, Scion, Dr Tom Richardson, has announced he will be resigning after 5 years in the role. Dr Richardson leaves Scion in August to take up the Chief Executive Officer role at Crown Research Institute, AgResearch Limited. Scion Chairman, Dr Russ Ballard, has advised that the Board will initiate a recruitment process for a new Chief Executive and will announce this in due course. Dr Ballard commended Dr Richardson on his leadership of Scion.

“Tom’s significant contribution to Scion means he leaves the organisation as a strong, robust company that will continue to go from strength to strength. Tom will be greatly missed by the forestry industries. He has been an extremely dedicated and professional advocate for our industries, bringing an extensive knowledge of science and technology transfer to the role. On behalf of the board, I heartily thank Tom for his contribution to the organisation and wish him well for his future at AgResearch,” said Dr Ballard.

Dr Richardson said he has enjoyed his tenure as chief executive, and thanked the board and staff for their support over the years.

Scion, is the trading name for the New Zealand Forest Research Institute Ltd, the Crown Research Institute for the forestry industry. The new chair of Scion is Tony Nowell, an Auckland-based professional company director. Mr Nowell has a strong commercial background, particularly in the food and manufacturing industries, and an ongoing involvement in research in New Zealand. He has most recently been the CEO of Zespri and Griffins. During the 1990s he held senior roles in the Sara Lee Group, culminating in the role of Regional Vice-President for Asia.

Carbon Market Kicks Off Tommorrow

Demand continues to build in the New Zealand carbon market with the official start date for emitters less than 24 hours away. All of the trading we have seen this week has been in spot NZUs with prices in the mid to high $17’s and the market is $17.75 bid against an $18.25 offer. There has been a sale of New Zealand AAUs overseas - whilst the price was not disclosed – our understanding is it was below the local price.

At this point - demand appears greater that supply though more sellers may emerge if the market trades in the mid $18’s. The emergence of overseas buyers, whilst small, has bought the international focus onto the NZ market – effectively the only other country outside of the EU with a fully functioning ETS.

Research continues to suggest that the supply-demand equation is more balanced than the market thinks it is – as mentioned last week – the supply of NZUs is expected to be lumpy and infrequent whilst demand is proving to be more constant. Many forest owners we have spoken to are quite content to hang onto their post 1989 credits they have – many don’t need the cash – some are waiting for higher prices and some have harvest obligations in the coming years. This view also applies to the pre-1990’s though we do expect a few to monetise these credits.
A trade at $18.00 in spot NZUs equates to a saving of nearly $5.50 per tonne versus the CAP when taking into account holding costs.

As highlighted last week - the CER Buy/Write strategy will also deliver below-CAP positions but the spot NZU is the cheapest credit domestically.

Please see www.nzcarbonmarket.com for live carbon prices

(Source: Nigel Brunel,OMFinancial, Carbon Market Weekly)

Best Practise Guideline for Log Loading - Correction

The Department of Labour, Land Transport NZ and the Log Transport Safety Council have been working together to produce a new best practise guideline for log loading, in light of incidents such as the accident we reported on last week this is good news for the industry. See here to print out a copy. Also please note this is an updated version that corrects some misinformation regarding log loading practise that was in the PDF regarding last week's story. The department has apologised for this and sent us their latest version as a correction.

NZ Wood Pellets Approved to International Standard

Nature’s Flame fuel has been endorsed by DIN CERTCO, Europe’s leading product quality standards body for residential wood pellet fuel.

DIN CERTCO is an arm of Germany’s Institute for Standardisation and its wood pellet certification criteria is being used as the basis of a proposed European Standard. Achieving certification required Nature’s Flame to demonstrate quality assurance through its entire production chain, says General Manager, Kerry Ellem.

“It’s a difficult and reasonably expensive certification to get and to maintain because it certifies our processes as well as the quality of the final product,” Mr Ellem says.

“It is the proxy European quality standard and having the DINplus certification mark on our packaging is an important part of what customers look for in selecting wood pellet fuel.”

Nature’s Flame is about to ship a 600 tonne cargo of pellet fuel to Italy. Packaged in 15kg bags, the consignment is for a customer which supplies the household market in northern Italy.

The Solid Energy business is also exporting bulk cargos which are helping European electricity generators reduce emissions from their plants.

Nature’s Flame fuel also carries BioGro international certification of its ash, meaning it can be confidently applied in organic gardening and does not need to be sent to landfill. Nature’s Flame took part in the work which resulted in Australia-New Zealand standards determining the power output, efficiency, and emissions of wood pellet fires (AS/NZS 5078:2007 and AS/NZS 4886:2007).

Background: Nature’s Flame wood pellets are made at plants in Taupo, Rotorua and Rolleston, near Christchurch, from untreated pine wood residues. The business was established in 2003, part of Solid Energy’s commitment to help New Zealand in its transition to clean, affordable and renewable energy forms. In New Zealand, its fuel is supplied in 15kg bags for the home-heating market and delivered in bulk direct to customers’ bunkers by trucks operating in the Central North Island, Auckland, Canterbury, Otago and Southland. In the 2004 EECA Energywise Awards, Nature’s Flame was joint winner of the Meridian Energy Renewable Energy Company of the Year.

Kerry Ellem was appointed Nature’s Flame General Manager on 1 June and is based in Taupo. He replaces Eric Gillan, who has returned to a contracting role in the forestry sector after making a significant contribution to the business over three years. Solid Energy’s Renewable Energy General Manager, Andy Matheson, says Kerry Ellem’s significant experience in the forestry area, from plantations to wood processing and international sales, will be an asset to Nature’s Flame. Mr Ellem was the Chief Executive Officer of Selwyn Plantation Board Ltd between 2000 and 2008, held senior management roles with Masport Ltd, Winstone Pulp International Ltd and James Hardie Building Products and has an extensive background in both domestic and international sales and marketing, forestry and forest products processing.

Finland Opens HUGE Biomass Power Plant

Finland's largest biomass power plant has been inaugurated by the country's environment minister. Kaukaan Voima Oy's power plant, located at UPM's Kaukas mill, has been fully operational since last November, with the cold winter making it possible to test the plant at maximum capacity. The plant which costs 244 million Euros to build will annually consume about 20,000 truck loads of fuel, including bark, branches, tree tops, stumps, small dimension wood and peat. The facility will generate 385MW of thermal power and 125MW of electricity.

(Source: TTJ Online)

John Deere Launches Biomass Website

Last week John Deere Construction & Forestry launched a woody biomass website www.woodybiomass.com designed to educate and inform about the importance of harvesting woody biomass. The user-friendly website explains what woody biomass is, why harvesting it is important, how it works as a fuel and what types of innovative public policies are needed to encourage responsible harvesting and the use of woody biomass.

Three short videos on the website include scientists providing insight to help educate the interested public, loggers and other industry members, policymakers and the press. The videos include:
“Harvesting a Cleaner Environment,” which shares how woody biomass can be processed into liquid fuel,
“Healthier Forests,” which discusses how uncollected forest floor residue can be an accelerant in forest fires,
“Stronger Rural Communities,” a review of how harvesting woody biomass helps provide out-of-work loggers with a new revenue stream and revitalize rural communities.

Kathmandu founder goes shopping at Gunn’s Auction

Tasmanian entrepreneur Jan Cameron yesterday spent almost $1.5 million on land being sold off by Gunns. The Kathmandu founder bought more than 1400 hectares at the auction in Launceston, ranging from $100,000 for 40 hectares at Meander to $950,000 for more than 1110 hectares at Soldiers Marsh and 251 hectares at Nunamara for $440,000. She was also succefful in acquiring 200 hectares of Gunns land comprising 12.5 hectares at Mount Leslie, 90 hectares at Henrietta Plains, near Yolla, and 45 hectares at Parawee.

Ms Cameron moved to Tasmania in 2006, after setting up the Kathmandu clothing chain in New Zealand 22 years ago, before buying the Chickenfeed chain for $170 million last year and donating its profits to local charities.

Backlash to Canadian Boreal Forest Agreement

The Canadian Boreal Forest Agreement - a deal which was recently announced between 21 member companies of the Forest Products Association of Canada (FPAC) and several environmental groups has triggered a significant response with people in Canada's rural forestry-based communities . With tacit if lukewarm approval for the agreement from some provincial governments, the response from people in the forest industry and resource-based communities has been swift and damning.

One letter stated "Can the fostering of a greater level of local and Aboriginal community involvement in decisions about the economic management of Crown forests make any sense as an objective when NINE Environmental Groups with GLOBAL ties are allowed by the Governments of Canada and Ontario to blackmail twenty-one Forest Companies into signing away our rights of employment in 29 million hectares of Crown Forest and plotting to bar us from nearly 150 million more? (The full text of the letter can be found here).

Below is a selection of the comments received in response to the news of the agreement:
"Forest based communities are as good as dead. Centralized government and international environmental groups which are really businesses and international companies come to an agreement. It DID NOT include those who will be most affected. That is, local people living and working in forest communities."

"The only way local people will have any opportunity to determine their future is to become active socially and politically. A one time conference won’t be successful."

"Union members who work in R3 communities better get active and start boycott campaigns at companies like IKEA who bend to Forest Ethics, Greenpeace etc. If you don’t you won’t have to worry about negotiations because there will be no operations."

(Source: The Working Forest newspaper)

Buy and Sell

... and finally ... details of the next SURVIVOR Series

THE NEXT SURVIVOR SERIES
Six married men will be dropped on an island with one car and 3 kids each for six weeks. Each kid will play two sports and take either music or dance classes. There is no fast food.

Each man must take care of his 3 kids; keep his assigned house clean, correct all homework, complete science projects, cook, do laundry, and pay a list of 'pretend' bills with not enough money.

In addition, each man will have to budget enough money for groceries each week.

Each man must remember the birthdays of all their friends and relatives, and send cards out on time--no emailing. Each man must also take each child to a doctor's appointment, a dentist appointment and a haircut appointment. He must make one unscheduled and inconvenient visit per child to the Emergency Room.

He must also make cookies or cupcakes for a school function. Each man will be responsible for decorating his own assigned house, planting flowers outside, and keeping it presentable at all times. The men will only have access to television when the kids are asleep and all chores are done.

The men must shave their legs, wear makeup daily, adorn themselves with jewelry, wear uncomfortable yet stylish shoes, keep fingernails polished, and eyebrows groomed. During one of the six weeks, the men will have to endure severe abdominal cramps, backaches, headaches,have extreme, unexplained mood swings but never once complain or slow down from other duties.

They must attend weekly school meetings and church, and find time at least once to spend the afternoon at the park or a similar setting.

They will need to read a book to the kids each night and in the morning, feed them, dress them, brush their teeth and comb their hair by 7:30 am.

A test will be given at the end of the six weeks, and each father will be required to know all of the following information: each child's birthday, height, weight, shoe size, clothes size, doctor's name, the child's weight at birth, length, time of birth, and length of labor, each child's favorite color, middle name, favorite snack, favorite song, favorite drink, favorite toy, biggest fear, and what they want to be when they grow up.

The kids vote them off the island based on performance.

The last man wins only if... he still has enough energy to be intimate with his spouse at a moment's notice.

If the last man does win, he can play the game over and over and over again for the next 18-25 years, eventually earning the right to be called Mother!

That's all for the week AND the month - got any good jokes to share? - Hit reply and email us - THANKS, John Stulen, Editor