BUSINESS INTELLIGENCE
JULY/AUGUST 2009
HIGHER HURDLES The green building battle – p14
PERFORMANCE PUSH Looking for better wood – p6
TRANSMISSION TROUBLE
Certification message misses mark - p10
TREADING CAREFULLY
Treatment industry hanging tough - p18
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SHORTCUTS in-wood
MAJOR FEATURES 6
JULY - AUGUST 2009
CONTENTS
6
PERFORMANCE PUSH Leading structural timber suppliers strangely missing from companies backing new guaranteed performance wood research consortium.
8
DRIFTING HELP LINES After-sales technical service means different things on each side of the Tasman.
10
TRANSMISSION TROUBLE The message on chain-of-custody and how it works is not getting through to Australian distributors..
12
BLURRED BOUNDARIES Recycled wood is in big demand, but can consumers be sure that it is the genuine re-used stuff?.
14
HIGHER HURDLES
23
Timber industry sweats on Green Star rating review that in a fair world would see the end of an FSC monopoly.
18
TREADING CAREFULLY Tough times are forcing a greater sense of unity in the wood treatment industry.
22
TWIST IN THE TUMA Contributed article offering treated wood producers a chance to cut costs and red tape.
23
TIMBER ON THE UP The environmental impact of large commercial buildings would reduced if more timber was used.
24
24
THE TIMO REVOLUTION They marched into New Zealand and now they are on the look-out for fresh opportunities across the Tasman.
26
FRAMING MOVEMENT Douglas fir structural grades have scored a major market edge over radiata pine in some New Zealand locations.
28
THE BLACK LIQUOR LOOPHOLE Pulp and paper industry gets a windfall from US biofuels tax incentive.
30
DRAGGING THE CHAIN Australian Government urged to deliver on illegal logging promise.
32
PLAYING WITH SPECIES
30
Profi le on Dr Jenny Aitken – the brains behind The Tree Lab biotech story.
DEPARTMENTS EDITORIAL | 3 SHORT CUTS | 4, 5, 34, 35
Quick reads from around the industry.
LETTERS | 35
INDEX TO ADVERTISERS
WEBSITE DIRECTORY | 35
Lumberlink IFC, AHEC 2, GNS Science 4, ISO Ltd 5, Nelson Pine 13, Champion
Top sites and how to find them.
SUBSCRIPTIONS | IBC
Freight 15, Mahild 17, Genera 17, Arch 20, 22, Holtec 23, AFS 28, Ray White 29, SEW-Eurodrive 31, Asset 33, forestryinsights 35, timberDESIGN 36, MIFF OBC
Make sure you get your personal copy – every issue.
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EDITORIAL
Eco-innovative Siberian larch cladding panels on listed London house. (Latest Green Star plans for wood - p14.)
DOWN AT THE Business intelligence
JULY/AUGUST 2009
HIGHER HURDLES The green building battle – p14
PERFORMANCE PUSH Looking for better wood – p6
TRANSMISSION TROUBLE
Photo: AiR Architects
Certification message misses mark - p10
TREADING CAREFULLY
Treatment industry hanging tough - p18
PUBLISHER + EDITOR Tony Neilson Email: tony@neilsonpromotions.com
CONTRIBUTING WRITERS Michael Buckley Bill Dyck Peter Harington Dennis Neilson
ADVERTISING MANAGER Don Wilson Tel: +64 9 535 7275 Email: don_wilson@xtra.co.nz
AUSTRALIAN ADVERTISING Tony Neilson Tel: 07 3891 7221 Mob: 0408 166 543 Email: tony@neilsonpromotions.com
SUBSCRIPTION & CIRCULATION ENQUIRIES Email: info@inwoodmag.com (New Zealand) Marie Lee Mob: 021 921 257 PO Box 17124 Greenlane, Auckland 1546 (Australia & International) Mob: 0408 166 543
DESIGN Work Of Art Graphics
PRINT & PRODUCTION Sentra
PUBLISHER
In-wood Business Intelligence is a publication of Neilson Promotions Pty Ltd ACN 135 775 736. PO Box 7611 East Brisbane, QLD 4169, Australia. Tel (+61) 0408 166 543 Estimated readership 14,000 per issue – available only by subscription or special delivery. ISSN 1836-7534. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, transmitted in any form or by any other means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the publishers. Also, while the greatest effort has been made to ensure the accuracy of the information contained herein, the publishers take no responsibility for errors or omissions, or for any consequences of reliance on this publication.
Neilson Promotions
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PLUNDER & PILLAGE
N
Tony Neilson
ow here’s a revelation: I wish
to pay public homage to my old sparring partner, the pugnacious former New Zealand Minister of Forestry Jim Anderton (my God, this new National guy is boring) for the vision and political drive to create Kiwibank. While it is ungracious to make comparative criticism when one leaves one’s country for another, it has to be said that life in Australia’s subtropics (and in Albury Wodonga for that matter) would be so much better if there was an Aussiebank! Somewhere people could take their increasingly hard-won earnings, knowing that, like their Kiwi cousins, their bucks are in safe and caring hands; goodness, maybe even counted, neatly stacked and placed lovingly in the vault for the greater benefit of the proletariat! The huge success of Kiwibank is undoubtedly the result of timing. (Who could have predicted one of the worst economic disasters in human history? Certainly not the economists.) Then there is the appalling arrogance of the global banking industry and an obvious rekindling of the Kiwi spirit – manifest in the fresh and cheeky brand image of this 100% New Zealand-owned outfit, delivering on its promise and hammering the international opposition like a good Kiwi should! Of all the grief and stress that this hurricane of a recession has dumped on us, the continuing haughtiness and profiteering of the (other) banks remains the greatest obscenity! Rolling Stone contributor Matt Taibbi may have gone slightly over the top when he recently described investment bank Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” But it is seriously beyond the pale (ale) when the banks, obviously desperate to protect their investment from receiver fire sales, are becoming pub owners! Would you really want to tell your mates that you drink at the Pig ‘n’ Westpac, the St George & Dragon or the NAB’s Head? Or how about: the Plunder & Pillage, the Prophet & Loss or the Firkin Mortgage?
Interestingly, six influential Aussie economists combined in July to call for the Government to back a “people’s bank” to break the stranglehold of the nation’s big four lenders. There is also mounting concern that the fiscal looseness practiced by the likes of the Rudd administration is unsustainable, and that governments will attempt to disguise the extent of their debt through high inflation. Unhelpful fiscal policies have stifled growth and essential profitability in the wood industry for decades. Despite that, there are positive stirrings, as you will see in this issue. But many of those companies sheltering from the present financial storm could be swept away for good if interest rates are allowed to rise too far too fast! (Tip: Can’t say too much, but I have it on good authority that in-wood will be coming to you like never before via a new web-based product launching in September.)
New owners at the Firkin Mortgage Photo: istockphoto.com
3
SHORTCUTS
HOPES STILL HIGH FOR NZ WOOD The future of the NZ Wood promotional campaign remains uncertain following the loss of much of its funding in the new Government’s spending cuts. Wood Council of New Zealand (Woodco) chairman Doug Ducker told in-wood just before publication that the situation (getting the industry to dig deeper) was unchanged, but he remained optimistic. “With the combination of industry resolve and governmental support for forestry and wood products as a key sector associated with the Budget’s Primary Growth Fund [NZ$190 million across all sectors over four years], Woodco remains very optimistic that the campaign will continue. “It is important to remember that NZ Wood was always programmed to take in a 10-year horizon and while form and targets may change, we are only 30 months in with tremendous successes evident in awareness and profile of our super product.”
DIFFERENT PERSPECTIVES AS ANOTHER MILL CLOSES Unfortunate timing perhaps, but while another New Zealand sawmilling casualty was being announced in late July, the Ministry of Agriculture & Forestry (MAF) was trumpeting how well the primary sectors had ridden out the global recession. On the same day WPI International managing director David Anderson told 65 staff at the Prime Sawmill in Gisborne the recently upgraded plant was facing closure, MAF director general Murray Sherwin (pictured) was predicting steady increases in returns over the coming few years to 2013 for the forest industry. Anderson says heavy recent investment and productivity gains at Gisborne were “more than wiped out” by the downturn in international prices and the exchange rate. “The high New Zealand dollar is threatening jobs right through the manufacturing export sector, and things won’t get any better until the problem is addressed,” he says. Meanwhile, releasing the latest ‘Situation and Outlook for New Zealand Agriculture and Forestry’ (SONZAF) report, Sherwin says the forecast downgrade is by no means doom and gloom, particularly for those able to adapt to the changing global trading conditions. He believes the exchange rate has actually helped insulate New Zealand from some of the effects of the recession. “The value of the kiwi dollar against major currencies will be key to determining the value of exports in coming years,” he says. You can say that again.
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4
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in-wood July/August 09
SHORTCUTS
RUBBERWOOD GETS BIG GREEN TICK With the Greenpeace Good Wood Guide having increasing influence at the check-out, rubberwood producers like Malaysia should be very pleased with the latest ‘best-and-worst imported timbers in Australia’ ranking. Rubberwood ranks number one of the best five, because it is mostly from old rubber plantations and harvesting it doesn’t destroy rainforest. The NGO also says it is excellent for furniture [if clunky] and a good ramin substitute. Bamboo and FSC-certified plantation eucalypt, tuan and vitex (New Guinea teak) are also in there, along with bamboo! (Radiata pine from New Zealand, western red cedar, and American hardwoods don’t rate a mention.) Greenpeace likes Rubberwood
Top of the ‘worst’ list is Burmese teak, plus African mahogany, merbau/kwila, ramin and meranti.
ARK TAKES TO WOOD Australian environmental organisation Planet Ark is going into bat for wood, because choosing sustainably managed wood products reduces carbon dioxide in the atmosphere and mitigates climate change. It will work with Forest and Wood Products Australia (FWPA), with which it apparently shares environmental values on a range of issues. "Priority areas will include adoption of certification schemes for sustainable forestry practices, supporting forestry's contribution to biodiversity and developing programmes designed to maximise carbon sequestration in wood," says Planet Ark CEO, Sean Barrett.
www.inwoodmag.com
HOT PRICES Competition in the Australian wood panels market has been ultra-hot of late, with Samling-owned AWP apparently slashing prices by up to 30% for some ply lines from surplus Malaysian inventory. Aussie producers have been forced to follow suit, but Kiwi suppliers have reportedly retreated for the time being.
PERUVIAN RAILWAY TIES
The news from Peru’s wood export industry is not good, with a near-50% decline for the year ended March 2009. But in amongst the official figures from the Exporters Association of Peru (ADEX) is an interesting reference to a 262% increase in sales to New Zealand – mainly railway sleepers it seems!
5
RESEARCH
Photo: istockphoto.com
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in-wood in-wood July/August 09
RESEARCH
A new research consortium with powerful US participation will drive the development of guaranteed performance softwood products in Australasia, but without the support of New Zealand’s big three structural lumber producers, as PETER HARINGTON reports.
T
he recently launched Solid
Wood Initiative (SWI) – a joint venture between the New Zealand Foundation for Research Science and Technology (FRST), Forest and Wood Products Australia (FWPA), North American forestry company Weyerhaeuser Ltd and New Zealand growers and some processors – is of huge significance to the wood industries of Australia and New Zealand. In an industry with a history of little product change, the promise of a new era of guaranteed performance timber products and unprecedented efficiency and optimisation improvements has enticed many sawmilling players in Australasia to contribute significant funds to this new venture – matched by FRST (government) money. But New Zealand’s biggest structural timber producers – Carter Holt Harvey, Red Stag and Panpac – have not invested in the SWI and its resulting intellectual property. The groundwork for the initiative was laid by the Wood Quality Initiative (WQI) consortium, which has waved the flag for research
ing, and getting payback on, in the next few years,” Tom Boon of Taranakipine (previously Taranaki Sawmills) and a director of SWI told in-wood. Also investing in his own R&D at the proprietary product end of the line, Boon says it makes sense to combine resources with the rest of the industry in common areas of research. Tenon is another major New Zealand contributor and technical manager Wayne Miller is seeking more research effort at the product processing stage that he can pick up on and take to market. “We have seen a decline in research effort on solid wood and this is a way to [redress] that.” Tenon was encouraged to invest in SWI because it makes everyday use of tools and knowledge from its WQI involvement. Investment by FWPA was another important achievement – delivering what Mackie calls “the critical mass to be really effective”. FWPA chairman and managing director of Wespine Ron Adams is confident the consortium will deliver on its objectives. “Importantly, this research represents a great opportunity for both countries to combine expert industry resources and ultimately drive profitability
fore it is opened up in the mill. This work will follow on from the sonic testing tools developed by WQI, and becoming commonplace in log segregation. The appearance objective outcomes will include tools to segregate green boards for their potential to produce stable, clean timber products, and understanding and mitigating resin and surface checking. Objective three involves structural research: developing tools that predict and assure structural wood performance properties. Some of this work will adapt technology from other countries to Australasian radiata pine. Mackie says Weyerhaeuser already sells structural timber with a ‘total wall replacement guarantee’ and that product confidence comes from the tools it has to predict product quality. Co-operation between SWI and Weyerhaeuser should see that technology adapted for local application. Other work on structural timber will focus on drying schedules to maximise stability. The energy, drying and water objective will look at all aspects of drying efficiency, with a
“The commitment by those who have invested in us in hard economic times shows a real desire to improve products and efficiencies. They are all seeking a better fi nancial outcome from their businesses.” – DR K EITH M ACKIE in the processing sector for the last five years. CEO of the WQI Dr Keith Mackie – who will also head up the SWI – told in-wood that WQI shareholders liked what was achieved and wanted it to continue. “But WQI had run its course and we wanted it to go in different directions.” SWI will take the emphasis from the forest and logs to processing and valueadded phases. “The thing we like in the SWI model is deliverables, which eliminates the way-out stuff and keeps a focus on things we can be uswww.inwoodmag.com
through the production of better quality and higher yield solid wood timber.” Mackie expresses admiration for the organisations that have joined the initiative. “The commitment by those who have invested in us in hard economic times shows a real desire to improve products and efficiencies. They are all seeking a better financial outcome from their businesses.” The first of four areas of attention for SWI is the logs and stems objective: understanding the quality of the wood inside a log be-
particular focus on water conservation for the Australian participants. Even at this early stage, there is little doubt that SWI is a credit to those who have chosen to get involved: the architects of the robust research model and those courageous enough to risk capital in such difficult times.
7
INFORMATION
The extent to which the Australasian wood industry offers free technical advice and aftersales guidance to customers – particularly specifiers – is being approached differently on each side of the Tasman. 8
H
ow
the
wood
industry
fights
for its market share in the current environment will have a defining influence on its future, and it is fascinating to observe the Australian and New Zealand industries adopting opposing strategies when it comes to supporting their customers with technical advice. In New Zealand, the emphasis is on the collective approach, while Australia is increasingly handing back the ‘help desk’ to individual companies in a move away from collaboratively funded technical support centres. in-wood July/August 09
INFORMATION
“huge increase” over the past three years in the level of technical support being made available by the New Zealand wood products industry to architects, engineers, builders and consumers. “Through regular consultation with specifiers and merchant groups, NZ Wood is beginning to build outstanding technical resources on its website. It is fast becoming the recognised one-stop shop for everything anyone wants to know about wood and construction.”
challenge for the industry is to find ways to deliver this technical service on a user pays basis or a lower cost way of delivery. Obviously the internet is one of those mechanisms.” Sinclair sees a different path for dealing with specifiers who make enquiries about their timber projects. “Historically, these were provided free by associations. The challenge is to identify and direct enquiries with a potential commercial outcome to the right place. There
“Part of the issue is that with any free generic service it is not valued by the customers using it or the industry people funding it.” – Ric Sinclair
istockphoto.com
NZ Wood campaign manager Geoff Henley says the next phase of promotion is focused on technical support for specifiers and building designers. Assuming the money is available to make it happen, the future is about assisting the industry to use wood and feel comfortable with it, thus creating the ‘pull’ effect marketers talk about. Pine Manufacturers Association (PMA) CEO Lawrie Halkett says there has been a www.inwoodmag.com
The PMA is also promoting glulam (www. stratalam.co.nz) and solid wood timber buildings (www.solidwood.co.nz), and has developed websites and free phone services. It is no longer just the big corporates doing the promotion and providing technical information to merchants and specifiers, says Halkett. Another effective force is the Timber Design Society (TDS), which is developing a timber design service, allowing specifiers to call a free phone number and get instant technical backup, at least to the point of solving conceptual design issues. In Australia, however, the trend is in the opposite direction. In June, the Timber Design Association of South Australia shut up shop. According to former executive director Peter Llewellyn the association struggled financially for some time and its Committee of Management decided there was no alternative but to cease operations. In a last-ditch effort to save what is one of the last state technical advice services in Australia, Forest and Wood Products Australia (FWPA) was asked to help. “We were approached by SATDC to fund them and we declined on the basis that it was a lot of money ad infinitum,” FWPA chief executive Ric Sinclair told in-wood. “Part of the issue is that with any free generic service it is not valued by the customers using it or the industry people funding it. The
is an opportunity for companies to take it on and turn technical enquiries into sales opportunities and direct inquirers to self-help kiosks on the Internet.” He points out that telephone enquiries can be disproportionately time consuming. “A home handyman building a hobby project can take as long as a large project manager.” By Peter Harington
9
CERTIFICATION
BREAKDOWN AT THE DISTRIBUTOR POINT
“The distributors are what you might call the ‘transmission’ of the chain-of-custody ‘vehicle’, and unless they are part of the overall strategy, everything grinds to a halt.” – Chris White Photo: istockphoto.com
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in-wood July/August 09
CERTIFICATION
Australian efforts to legitimise wood products in the home market and to shut out illegally sourced product are apparently being strangled at the distribution level.
T
he problem was identified at
a late July forum in Brisbane on certification and green building where it was claimed that timber distributors were largely ignorant of the certification process, particularly chain of custody and its potential value as a business tool. “Distributors have not been involved enough in the education process and thus know little about how it all works,” Moxon’s NSW sales manager Chris White told attendees at the Australian Forestry Standard Ltd (AFSL) event. “We talk about a chain of custody, but there is a seriously weak link in that chain because there are still very few importers and wholesalers, merchants and even joiners who, to my knowledge, know anything much about the system – let alone getting themselves certified. “The distributors are what you might call the ‘transmission’ of the chain-of-custody ‘vehicle’, and unless they are part of the overall strategy, everything grinds to a halt. Merchants feel they have been left out of the promotional process,” he says. It is probably a good thing that demand for certified wood is well down on last year because there is not enough available anyway. “But when the market picks up again it will be important that the merchants are better informed and involved in the chain-of-custody process.” AFSL chief executive Kayt Watts agrees the problem needs urgent attention. “As soon as I hit the ground with AFS [about eight months ago] we launched a brand awareness and education campaign. We know we have
www.inwoodmag.com
to educate every corner of the industry, and I have already been through the door of every stakeholder timber association as part of the process,” she told in-wood. The Australian Forestry Standard (AFS) for forests and its associated AFCS chainof-custody (CoC) standard are endorsed by the Programme for Endorsement of Forest Certification (PEFC). Watts says momentum is building rapidly, with 10 new wood-related organisations and their processes being certified for forestry or product CoC every week. But she is nervous about talking up demand for the AFS/PEFC product until it is more widely available. “FSC has a very high profile, but the reality is that it is almost impossible to get in Australia, and that has angered their expectant customers. They have created a demand they can’t supply.” AFSL will also have to sort out its confusing brand position: is it AFS, AFCS, PEFC, or all three? Certainly it is a more complicated image than the FSC generic. Watts says that is also being dealt with and the marketplace can expect a clear distinction: AFS certification will apply only to the forest and any associated wood products entering the market will be eligible to carry what is likely to be a ‘PEFC Australia’ chain-of-custody brand. “Getting all of this together will put us in a great position to tell [remanufacturers and merchants] here is your source of product. Now all you have to do is add the rigour of being certified to the PEFC standard and then your customers can be assured the wood is
from one of those certified sustainable forests. That way we can also be sure no illegal wood will enter the chain in Australia.” AFSL is also developing a database of ‘guaranteed’ certified product suppliers for release by the end of the year. (Footnote: PEFC International re-endorsed the AFCS at the end of July for a further five years. Almost 9 million ha in Australia are certified to the standard.) By Tony Neilson
Distributors need to know more about the CoC process Photo: inwood/images
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RECYCLED
The Australian Architectural Hardwoods mill at Kempsey Photo: inwood/images
Demand for recycled Australian hardwoods may never have been greater, but at least one leading supplier believes too much is of questionable lineage, with potentially serious consequences for the industry.
12
C
ustomers wanting Green Star ratings on their
buildings are a major reason for what Australian Architectural Hardwoods (AAH) managing director Andrew Brodie modestly calls “strong and consistent demand” for recycled timber, but he says too many people are not getting what they think they are. The official definition of recycled wood is that it is reused, postconsumer – for which an architect can score the maximum two points under the Australian Green Star sustainable building system. But Kempsey-based Brodie believes the boundaries of that definition are being increasingly blurred by the activities of some operators. “It is definitely going on, and brings the industry into disrepute,” he told in-wood. “Credibility of the wood actually having been recycled is crucial to the whole industry. It is a massive problem.” He recommends customers looking for the real thing should check for nail marks and signs of distress in the wood. “But if it is immaculate, end-matched and graded to Australian standards it is very unlikely that it is recycled.” in-wood July/August 09
RECYCLED
“Credibility of the wood actually having been recycled is crucial to the whole industry. It is a massive problem.” – ANDREW BRODIE A Queensland government-sponsored effort to develop standards for the recycling industry had failed because participants could not reach agreement on a suitable model. “All we can do is try to bring some ethics back into the whole thing, which is why we have chain-of-custody and are undergoing a Green Star assessment,” he says. Despite a slowdown in the second quarter, Brodie says the recycled market is positive – driven by increasing awareness of green building: “Recycled is fashionable and politically and environmentally correct but I don’t think the financial crisis has really hit us yet.” Architects are his principal specifiers. “Builders are in there, too, but for first-timers, most people run with the architects – they are the ones who plan the feasibility of the job with the owners and have gone through all the planning and detailing with them.” AAH sources wood from Cairns to the mid-NSW coast and Brodie says the net is being spread ever wider. “Finding raw material has always been tough and we’ve got people fulltime out spotting; driving and flying around the country. It is very competitive.”
www.inwoodmag.com
The “fairly passionate” environmental activist who emigrated from New Zealand 30 years ago is also concerned about the way Australia’s hardwood forests are being managed. “Around here [Kempsey] they call it ‘managed forest’ but it is actually being clear felled – forestry in squares! Why does it all have to be taken in one go? It is no different to what’s happening in the Amazon. The only thing saving the situation from being a huge ecological disaster is the incredible resilience of the Aussie forest – it bounces back like no other in the world.” He would like a return to the forest practices of the 1970s: “Selective logging and forests where you could always go and see a mixture of ages and species and the forests were full of life.” The former builder got into recycling initially because he saw it as the only way to get the large, stable sections needed for the architectural jobs he was doing. “It fitted like a glove with my environmental beliefs.” By Tony Neilson
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GREEN BUILDING
Photo: istockphoto.com
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in-wood July/August 09
GREEN BUILDING
GREEN STAR SYSTEM CONTINUES TO THREATEN GOOD WOOD The Australian timber industry is sweating on a review of the Green Star rating system that in a fair and just world would see the end of the FSC monopoly on points-scoring certification of wood products. But, as Tony Neilson reports, the devil is again in the detail.
T
he Green Star rating system for buildings challenges
logic and justice but nevertheless seems to be sweeping the globe at a similar pace to swine flu. How can a sustainable building programme that rewards a bike rack with the same number of points as can be earned for using certified wood have any credibility with thinking architects, politicians or the public at large? Well, it does. And you had better get used to it because as the benchmarksetting US Green Building Council’s LEED (Leadership in Energy and Environmental Design) programme is now saying: “[Green Star] is coming to a home near you.” LEED for Homes is being designed to demonstrate that a high-performance sustainable house includes comfort, quiet, a healthy indoor environment, low maintenance and good looks.
Festering sore The USGBC – which also seems to set the base standards for Australian and New Zealand clones of the green building concept – is working with builders nationwide to develop a points system to “reinforce what builders are doing right environmentally”, says spokesman Jim Hackler. The Green Building phenomenon has taken off in Australia like nowhere else outside the US, but for the local wood industry it has become a festering
www.inwoodmag.com
15
GREEN BUILDING
“The process will not be based on the technical audit alone. There can be a political influence in the final outcome, and as to who gets the extra point..” – K AYT WATTS sore. This is partly because the Green Building Council of Australia (GBCA) insists wood must prove its sustainability, when many competing building materials do not. But it is mainly about the GBCA only recognising FSCcertified wood for Green Star rating points. Against background mumblings of environmental favouritism, timber interests and the Australian Competition & Consumer Commission (ACCC) complained it was anti-competitive for the GBCA to unconditionally accredit only one forest products certification system. When Kayt Watts took over as CEO of Australian Forestry Standard Ltd (AFSL) late last year, the first question she was asked by her board was: ‘What are you going to do about the GBC?’ “Because there was almost no FSC wood available, importers were bumping up the price to the extent that there was no incentive to use it. The FSC-only points policy was almost self-defeating, but it was the push-back to a fairly strong lobbying effort,” she says. After a year’s deliberation by a ‘timber expert’ reference panel (TERP) the GBCA released a new ‘draft framework’ review of the timber credit
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at the end of June – one of seven in the council’s Materials category addressing environmental impacts of building materials. And for marginalised forest certification and chain-of-custody (CoC) schemes like the Australian Forestry Standard (AFS) and PEFC (the world’s biggest CoC certifier), that is potentially very good news. But there is serious devil in the detail – the extent of which will become clearer when the ‘revised’ timber credit is released for comment at the end of July (right on our deadline). Speaking at an AFSL forum in Brisbane in late July, GBCA Queensland and Northern Territory Green Star rating tool manager Andrew Aitken signalled that AFS/PEFC and FSC would achieve ‘best practice’ recognition. However, there is palpable nervousness that the GBC’s global enchantment with FSC will still see that scheme emerge with the upper hand.
Unrealistic expectations The nub of the problem is embodied in the GBCA’s desire to be the final arbiter on what constitutes a full-points-earning timber certification process – requiring the world’s leading independent forestry and CoC certification schemes to ‘prove’ themselves to an organisation with little or no expertise in the matter. “PEFC and FSC are the most recognised global certification schemes; rigorously reviewed and with impeccable credentials. And for the GBCA to want to change the benchmarks and put them through the hoops again is ridiculous and will hurt the timber industry,” says Watts. But Aitken says the GBCA only wants to keep illegal timber out of Australian buildings – not wood per se. Under the new criteria, the certification schemes will have to re-accredit with the GBCA – all in pursuit of the two points available to wood in the Green Star ratings.
“It is possible to use illegal timber or shunned PVC in a building and still get a 6-star rating under current GBCA rules.” Entry level will permit the use of a non-recognised scheme’s timber but attract zero points. Tier 1 will denote a GBCA-recognised scheme and attract one Green Star point and Tier 2 will signify the special seal of approval from the GBCA board and thus receive two rating points (the maximum). “If we [AFS/PEFC and FSC] went through the process right now with no changes, it looks like we would both only get Tier One, because of the prescriptive review benchmarks,” says Watts. She is more concerned however about what happens following approval by the GBCA’s independent accreditation body. “The final decision as to whether you get Tier 1 or 2 is still going to be down to the council itself. The
in-wood July/August 09
GREEN BUILDING
“In this whole process there are only two points out of 100 available for timber, but if it is too much trouble and too complicated or costly, builders will stop using wood.” process will not be based on the technical audit alone. There can be a political influence in the final outcome, and as to who gets the extra point.” Scepticism is understandable given the long history of green organisations handing exclusivity and accreditation to the FSC. But this time, it will at least have to jump through the same hoops as the other schemes. “It appears the GBCA will not recognise the full global suite of FSC schemes, and therefore it should be more difficult for them than for PEFC and AFS, which are based on national standards,” says Watts. “In this whole process there are only two points out of 100 available for timber, but if it is too much trouble and too complicated or costly, builders will stop using wood. That’s the realistic bottom line. Why go through all those hoops to get two points when you can still get your major Green Star rating by not using timber?” Aitken admits it is possible to use illegal timber or shunned PVC in a building and still get a 6-star rating under current rules. Watts says AFSL will continue to lobby the GBCA. “I want to get this resolved in a positive way. The problem is that until the new criteria are resolved the built environment has only one product source [FSC] in the Green Star rating. But you can’t get FSC wood in Australia, which means timber is probably not contributing much at all to the green points in most structures.” New Zealand timber and building design sectors will be watching events in Australia with close interest because whatever happens there tends to make its way quickly across the Tasman to the New Zealand Green Building Council’s agenda.
In Green Star, a bike rack gets as many points as all the certified wood Photo: Norwich Cathedral - Richard Davies
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17
WOOD TREATMENT
The Australasian timber industry is based substantially on wood requiring some form of treatment to ensure its durability and fitness for purpose. But with unprecedented market shrinkage, a strong and united wood preservation sector will be vital, as PETER HARINGTON reports.
CCA-treated boardwalk on New Zealand’s world-famous Tongariro Alpine Crossing – still the best protection in tough conditions Photo: Neilson Images
18
in-wood July/August 09
WOOD TREATMENT
I
ncreasingly, the wood treatment
sector is being legislated away from the full suite of chemicals to which it has been accustomed. So, is the industry lining up the next generation of more consumerfriendly treatment systems to satisfy an ever more challenging marketplace? To find out, in-wood approached a number of leading suppliers and users of preservatives. Not all returned our calls and not everything we were told was printable, but the biggest issue according to those who did respond is the general downturn in demand for timber on both sides of the Tasman. One result of the prevailing market conditions is a perceived lack of longterm business investment by the chemical companies and the users. Peter Carruthers from Arch says, “Game-changing technology needs risk and capital infrastructure, which most in the industry don’t have an appetite for, so big changes don’t happen easily. Incremental changes are evolving slowly though.” Zeelam managing director Peter Hayward has a similar read: “It takes five years for field and other trials, and a lot of money for an H3 registration. No one can take that on in the current environment.” In contrast, Osmose spokesman Nick Livanes in Sydney points to “huge investment” in the development and trialling of micronised copper systems in the US and Australia. “This is a major change for the Australasian market to a new technology offering major benefits in terms of actives, leaching, fi xture corrosion etc.” Legislative outlawing of CCA, particularly in New Zealand – one of the last countries with unrestricted use – is the other big threat. Australia enjoyed free use until the first restrictions came on, starting with playground equipment concerns. In New Zealand, ERMA (Environmental Risk Management Authority) gave CCA the ‘big tick’ after a review two
years ago, but the issue is not dead. A mounting number of class action law suits against suppliers of CCA in the US are also likely to fuel nervousness. Some we spoke to grudgingly admitted that CCA has no future. So what will life be like after CCA? Most respondents believe we are unprepared for its abrupt loss. Two possible opions mentioned were micronised copper and the loosely categorised ‘organics’ group of chemicals. “If we have to move away from CCA,” says Hayward, “we must look at the organics. They have the advantage of not being bio-accumulative. In other words they break down naturally over time. So we are going to be preserving wood with something that breaks down and is planned to fail!” In Australia there are already reports of post-CCA alternatives failing, with mould and decay appearing on treated wood. On both sides of the Tasman it is expected that a strong farming lobby, usually the bane of the forest industry, will fight to keep CCA available for as long as possible.
Fire retardants A potential ‘golden egg’ is fire retardants. After the bush fires in Victoria earlier this year there was a backlash against wooden buildings and it is one of the subjects under close scrutiny by the Royal Commission. There was general agreement among the people we spoke to that the answer has not been found, although there are persistent rumours of new, more effective products “on the way”. Livanes says: “There has been a lot of attention on wood treatment of buildings in bushfire-prone areas and while some products exist, there is no magic bullet that makes wood fire-resistant, is cost-effective and, most importantly, will stand up to external weathering conditions.” According to Verda New Zealand
DBH is trying to make sense of framing treatment Photo: Neilson Images
“I think there is now more of a feeling that we are making conscious decisions to modify our behaviour and restrain those vociferous negative public comments.” – PETER CARRUTHERS www.inwoodmag.com
19
WOOD TREATMENT
“If we have to move away from CCA, we must look at the organics. They have the advantage of not being bioaccumulative. In other words they break down naturally over time.” – PETER HAYWARD managing director Grant Butterworth, the overriding threat to the industry is the end-oflife-cycle issue, including end-of- use disposal, chemical dumps and landfill space. Already, it is being used against timber by the steel and concrete industries, which like to point out that their products can be recycled. This is less of an issue in New Zealand, but is increasingly important in Australia where the industry has responded with the formation of the National Timber Products Stewardship Group (NTPSG). This group is concentrating on acceptable ways to dispose of waste wood,
looking initially at the feasibility of generating heat and electricity from furnaces burning treated waste wood. Frustrating for the New Zealand industry are the complex codes specifying treatment of framing timber. Many were hastily written as a response to the leaky homes controversy. Different treatment regimes apply to different framing components, depending on the perceived risk, which means fabricators and timber retailers carry duplicate stocks of LOSP and boron treated wood. John Harper of the Department of Building
and Housing (DBH) is leading an attempt to achieve some standardisation. “Our research is to see if high concentration boron can be used as an alternative to LOSP for this category of framing. There will be a general review of NZ3604 and NZ3602 sometime, but it is not programmed specifically. Boron is permitted if it is paint [protected] but there are flaws. We don’t see this as fit for purpose after timber is cut and notched.” The DBH has contracted the research to BRANZ and any code changes would follow the 18-month research programme.
The leading name in wood protection in New Zealand and Australia. •CCA •LOSP •Boron •Anti-sapstains •Timber care •Preservation plant engineering & consultancy For more information about the full range of market-leading Tanalised® products, please go to www.tanalised.com or contact Arch Wood Protection (09) 276 3646
20
in-wood July/August 09
WOOD TREATMENT
A better face The way in which the Australasian wood treatment industry conducts itself has also come in for criticism. Paul Maynard of Mattersmiths believes disharmony among treaters and chemical suppliers is a real concern. “Everyone is pushing their own barrow, and above normal competition [there are] dirty tricks, which bring all of us and our industry into disrepute.” TimTech managing director Ron Eddy believes the answer is straightforward: “The chemical suppliers should focus on growing the overall market rather than focussing on destroying the competition.” Carruthers sees some light: “Generally, this is healthy competition, but I agree that it can get destructive, and it has in the past. I think there is now more of a feeling that we are making conscious decisions to modify our behaviour and restrain those vociferous negative public comments.” Maynard agrees: “Disharmony among treaters and chemical providers has been a problem. Some people are saying LOSP is going to be banned from all framing, which is absolutely not true, but helps others to position their products. There is now some co-operation, with the industry starting to present a better face to the world.” Livanes says too much is made of what he believes are historical disputes. “What we have in Australia and New Zealand is very competitive companies in a free enterprise environment.” Regardless, the industry must still work hard to change public and specifier perceptions of wood treatment. “As an industry, we don’t sell our story well,” says Butterworth. “But that is understandable because as soon as you put your head above the parapet you are likely to get it shot off. The NZ Wood campaign has been great but it deliberately hasn’t pushed treatment issues.” When chemicals are brought to the public’s attention the first reaction is negative, according to Carruthers. “But people expect their wood to last in their buildings. The NZ Wood campaign has been great, even though it avoided the chemical issue specifically.”
www.inwoodmag.com
CERAMIC-LIKE PROTECTION ENERGISING NEW FIRE-RESISTANT TECHNOLOGY Hot on the heels of last summer’s murderously fierce, life-ending Victorian bushfires, CSIRO researchers in Melbourne are talking excitedly about tough new fire-resistant coating materials that can withstand temperatures above 1000 degrees C. The hybrid inorganic polymer system (HIPS) will apparently out-perform current commercial coatings used on building materials and structures, which break down at between 150 and 250°C. HIPS project leader Dr Damian Fullston says CSIRO is looking for coating manufacturers interested in partnering to customise the technology to meet product specifications for specific applications. “Geopolymers are an emerging class of ceramaSentinels of the bushfire mic-like inorganic polymers produced at room temdevastation at a Victorian sawmill peratures that have the potential to transform the Photo: VAFI building products industry,” he says. “Not only fire, blast and acid-resistant, they are also strong, castable, sprayable and extrudable – making their potential uses almost limitless.” Fullston told in-wood CSIRO had been working on the technology for several years, based on geopolymer work done within the Sustainable Materials Processing team. “Geopolymers are an energising class of engineering materials with environmental benefits from utilising industrial by-products such as flyash and blast furnace slag, and their room temperature curing.”
“Geopolymers are an emerging class of ceramamic-like inorganic polymers produced at room temperatures that have the potential to transform the building products industry.” – DR DAMIEN FULLSTON Asked about potential for loss of adhesion over time and in extreme conditions, he says customisation to target specifications will be key. “Working with industry partners allows us to develop HIPS technology for their product requirements. The challenge is finding the right HIPS formulation to achieve the desired properties.” To what extent will it alter the appearance of wood? “Current HIPS coatings are opaque and [can] be coloured with either pigments or dyes. If an industry partner wanted a transparent or translucent coating, we could do research in that direction.” Fullston expects final cost-competitiveness with alternative fire retardants will be driven by economies of scale. “Geopolymer resins can be cheaper than organic resins, since they are made from readily available raw materials. There is only a small component of polymer additives in the HIPS coatings.” Development of this technology and its applicaHIPS coating under severe tion in fire-challenged areas of Australia and the heat testing world will be watched with close anticipation. Photo: CSIRO
21
THE TREATMENT
SPECIAL FEATURE
Why does the timber industry and preservation in particular need such a legislative crutch to govern itself effectively and produce compliant products that are fit for purpose?
Photo: Inwood/Images
Treated wood producers and exporters have a chance to cut costs and red tape, according to Arch Wood Protection executive PETER CARRUTHERS, but there may be other considerations.
F
or those who might not already
know, ‘TUMA’ stands for the Timber Utilisation & Marketing Act and is a piece of state-level legislation in Queensland that impacts significantly on the production and sale of treated wood products. Although the direct implications, including the potential for punitive actions against producers and trade suppliers, are supposedly limited to Queensland, many in the industry know better. The TUMA influence spreads well beyond preservation – throughout Australia and further afield (ask New Zealand exporters about sending treated wood into the ‘Sunshine State’). In a new development, as part of a departmental amalgamation and rationalisation, the Queensland Government is reviewing TUMA to determine if it is necessary to maintain such a niche item of legislation in today’s economic and political environment. The draft review document points out that TUMA is not expensive to administer – about A$170,000 in the financial year 07/08. However only about A$16,000 was recovered by way of fees and charges. The longer-term average cost
recovery rate from industry and the market is reported to be 9%. Among other questions, the review asks if TUMA is to be retained, what level of cost recovery for administration is appropriate, taking into account the service delivered to industry and the degree of private and public interest provided by the legislation? If full cost recovery is an objective, many producers in Queensland and exporters to the state are likely to be most unhappy about their brand registration costs and other fees going up at least tenfold! Equally, there will be some who think the cost is small and TUMA is important to maintain quality and compliance in the industry, and that chaos would ensue without it. The review paper also asks what are the costs and benefits of prescribing requirements and standards for timber preservative treatment in legislation to industry, the community and the Government? Standing back for a moment, it is hard to think of other substitute building materials that have similar legislative structures. There doesn’t appear to be a Steel or Concrete Utilisation & Marketing Act, or equivalent. Why does the
timber industry and preservation in particular need such a legislative crutch to govern itself effectively and produce compliant products that are fit for purpose? Australian Standards (which closely mirror TUMA requirements) and ample legislation at federal and state level provide consumers with sufficient protection against defective goods and services or misleading and deceptive business conduct. Thus, it may well be argued that TUMA is essentially a piece of unnecessary Queensland Government legislation. Individuals who work for the Department of Primary Industries and Fisheries such as Jack Norton and Michael Kennedy (among others) have made substantial contributions to the industry over the years via research, committee work and stakeholder education. And that effort should continue. But surely our industry is mature enough to govern itself without the threat of punitive actions via TUMA. It is therefore important that people likely to be affected by this legislation have their say. You can submit a response at: http://www.dpi.qld .gov.au /cps /rde /dpi / hs.xsl/26_14271_ENA_HTML.htm.
Contributed by Peter Carruthers of Arch Wood Protection. To follow up with him or find out more about the latest Arch products, Email: PCCarruthers@archchemicals.com Website: www.tanalised.com
22
in-wood July/August 09
NEW STUDY
Using more timber in large-scale commercial buildings can decrease some environmental impacts of the building, according to a new Ministry of Agriculture and Forestry study.
T
he New Zealand research project, Environmental
Impacts of Multi-Story Buildings Using Different Construction Materials, modelled the life cycle energy use and CO2 equivalent emissions of four similar office building designs. Each used different materials as their main structural element: concrete, steel, timber and ‘timber-plus’. The latter also used wood-based non-structural elements. The timber-plus building had the lowest net environmental impact, producing 4571 tonnes CO2 equivalent and the steel building had the highest (6789 tonnes of CO2 equivalent). Timber was second lowest (5454 tonnes), followed by concrete (6627). MAF sector performance director Iain Cossar says the study provides valuable information on the life cycle environmental impact of various construction materials and the benefits of maximising the use of wood. “The report also fills an information gap concerning how much wood can be used in the construction and fit-out of commercial, large-scale buildings in New Zealand. It shows that increasing the use of timber can decrease the total energy consumption and environmental impact of the building over its 60-year lifetime. “The study found that from a technical point of view, a commercial building of up to six storeys could feasibly be constructed on a timber structure, something that does not typically happen in New Zealand.” The full life cycle of the buildings, including the initial embodied energy of the materials used, maintenance, transport, operational energy and end-of-life scenarios were included in the study. All four buildings were designed for a 60-year lifespan and were based on the design of an actual six-storey concrete building. The research used Life Cycle Assessments, which measure the environmental impacts associated with a product, process, or activity by identifying energy and materials used and wastes released through the course of a product’s lifespan. The study was led by researchers from the University of Canterbury and included work by Crown Research Institute Scion and Victoria University of Wellington. Full report available at: www.maf.govt.nz/forestry/publications. www.inwoodmag.com
“The study found that from a technical point of view, a commercial building of up-to six storeys could feasibly be constructed on a timber structure...” Photo: wood.forgood
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23
INVESTMENT
Funds will be looking for better than ‘full price’ deals Photo: inwood/images
They marched into New Zealand and brought stability to previous corporate forestry madness. In Australia their presence has been less obvious, but as DENNIS NEILSON writes, TIMOs are on the move again.
T
he growth of institutional timberland investment,
particularly via Timber Investment Management Organisations (TIMOs), has been widely reported in the forest industry. There are about 25 US-based TIMOs operating domestically and, increasingly, offshore. A growing number of European-based TIMOs/funds/companies are also looking to expand their business. In
24
all, about 50 fund managers are in serious timberland investment. Institutional investment reached New Zealand via the then TIMO RII in 1992. It was so profitable that others soon followed and by 2009. TIMOs and funds owned an estimated 750,000 ha (about 45%) of the country’s commercial forest. TIMOs currently involved locally are Hancock Timber Resources Group, GMO RR and Global Forest Partners. in-wood July/August 09
INVESTMENT
New Zealand is the most favoured destination for TIMO investments, followed by Australia where the same three players are present – owning around 280,000 ha of Australian timberland by 2009. Although only a few TIMOs have invested overseas, we can expect more activity in future. The ownership pattern in Australia especially is expected to change dramatically in the next two to three years, with several hundred thousand hectares of hardwood and softwood plantations set to change hands. Their influence on Antipodean forest ownership has been rapid and substantial, but has the fund and TIMO revolution been good for the industry? On balance, it has been positive in New Zealand – but let’s be honest, it did not have to be that good to upstage the abysmal forestry games played out by Fletcher Challenge and International Paper-controlled Carter Holt Harvey in their last years.
to reduce the exposure (in New Zealand) of their multi-billion-dollar tree investment to just a few offshore log markets. In Australia, the impact of TIMOs has been less dramatic, as even the most cavalier of forest owners did not wreck their forests as had occurred over the Tasman. However, TIMO funds enabled two state governments (Victoria and Tasmania) to swap trees for much-needed cash and were also used to mop up several private estates from semi-distressed owners. We can soon expect major TIMO investment into further state forest sales in Queensland and New South Wales; and perhaps into part or all of almost 300,000 ha owned by insolvent hardwood plantation companies. Buyers will acquire these assets at prices hugely discounted from reported asset values. Finally, at least one TIMO in Australia is branching out into exotic new species such as African mahogany. TIMO funds may yet develop a major new industry.
In Australia, the impact of TIMOs has been less dramatic, as even the most cavalier of forest owners did not wreck their forests as had occurred over the Tasman. TIMOs brought an equity-funded model, which resulted in ownership stability and the ability to rebuild shattered forest structures. Their funds ultimately enabled the transfer of a major proportion of Crown forest ownership into stable private hands. Some observers note that TIMOs are less willing than previous owners to support ‘good causes’, including some industry association projects and New Zealand wood promotion and development. That’s as maybe, and of course the industry will always ‘need’ more funds than are on offer. However, it appears TIMOs are at least supporting the most basic programmes.
A snip at US$1 A disappointment is the TIMO reluctance to invest in wood processing facilities. One notable example was the decision by GMO/Harvard to purchase the Central North Island Forest Partnership’s trees only. It reportedly pressured the then receiver to quit Waipa sawmill so rapidly that he sold it for a single US dollar. The New Zealand industry sorely needs $2-3 billion invested in wood processing if it is to add value to even modestly increasing harvest volumes. There have been tentative moves by some TIMOs/funds to invest in processing plants in New Zealand and overseas. Maybe this trend will continue, if only www.inwoodmag.com
But, not surprisingly, clouds are gathering over the TIMO Oceania plantation assets. Pension and endowment funds have been hit hard by the financial crisis and TIMO money is scarcer than it has been for several years. Those funds with cash are looking for bargains, so the days of ‘fully priced’ deals may be limited. Also, timberlands fund managers are being attracted to Latin America. A new RISI report has identified about 70 overseas timberland investors who have invested or want to invest in Brazil alone – compared with perhaps fewer than 10 presently involved in New Zealand. TIMO funds brought stability to the chaotic New Zealand forestry sector just when it needed it most. They have also provided a stable wood supply platform for much of the Australian softwood industry, and will likely fund several new Oceania transactions in the next three years.
25
BUILDING
FRAMING
South Island suppliers would benefit most from any code change Photo: inwood/images
DOUGLAS FIR WINS NEW STIFFNESS TESTS The prospects of Douglas fir gaining a market edge over radiata pine in some New Zealand locations may have taken a turn for the better, following recent research.
F
or more than 70 years leading
up to the leaky buildings crisis, Douglas fir was used as an untreated framing timber. But the subsequently amended New Zealand Building Code significantly restricts the use of untreated radiata pine and Douglas fir in domestic buildings – making no allowance for differences between the species. Douglas fir suppliers argue it is more 26
resistant to moisture uptake, more durable, stronger and stiffer than radiata pine. The latter distinction implies that even if Douglas fir framing decayed it would retain greater stiffness than radiata pine unaffected by decay. This is an important point as observable decay is the main criterion for replacing framing when a ‘leaky building’ is rehabilitated. The New Zealand Douglas Fir Cooperative in-wood July/August 09
BUILDING
Douglas fir suppliers argue it is more resistant to moisture uptake, more durable, stronger and stiffer than radiata pine. contracted Scion to run a three-year experiment to directly compare the loss of stiffness between radiata pine and Douglas fir under conditions promoting decay. Results indicate some decay in untreated Douglas fir does not cause the same amount of stiffness loss as it does in untreated radiata pine (see graph). Therefore, when leaks are rectified and the framing timber dried the structural integrity of Douglas fir is retained.
Graph shows relative loss of stiffness with time/decay between radiata pine and Douglas fir
Summary of test conditions: • timber was allplaner gauged 100 x 90 x 45 mm • samples had partially decayed feeder block ‘infected’ with brown rot attached at the centre of one 45 mm edge • samples were immersed in water for two hours before installation • every four to eight weeks samples were removed from tanks (in a partly shaded area), weighed, assessed for decay/mould and tested for deflection • because moisture content of all samples exceeded fibre saturation (26% MC) after 12 weeks, no corrections for moisture differences were required. The purpose of the comparative tests, conducted by Mick Hedley, Dave Page and Jackie van der Waals, was to provide information to allow a possible review of the status of Douglas fir framing in the New Zealand Building Code – particularly buildings where it can be used untreated or preservative (boron) treated. A Scion spokesperson told in-wood that Douglas fir (particularly from South Island sawmillers) could gain a significant commercial benefit if it could be used untreated in more diverse framing situations – as had once been the case.
www.inwoodmag.com
27
PULP & PAPER
Kraft pulp mills in the US could receive US$10 billion in ‘biofuel’ handouts Photo: istockphoto.com
A United States Government initiative to increase the uptake of biofuel blends by transport operators has left a loophole that has some in the pulp and paper sector rejoicing and others feeling seriously threatened. 28
O
n page 804 of the massive 2005 Highway Bill a
bunch of sharp-eyed consultants spotted a facility to allow tax credits for those burning biofuel blends. The alternative fuels clause was intended primarily to increase the use of ethanol and other biofuels and reduce the national dependence on imported oil. Kraft pulp mills have burned ‘black liquor’ – a mix of the chemicals used to break wood down and dissolve the lignin – since 1930. By burning off the lignin the chemicals can be recycled into the pulping process, generating process steam heat along the way. These steps are economic and environmental essentials to the kraft pulping process. in-wood July/August 09
PULP & PAPER
While the whole affair seems something of a comedy, there are ominous signs that the black liquor fiasco could distort world pulp markets. But the consultants worked out that if diesel was added to the black liquor, it could be called a ‘biofuel blend’ – with attendant tax breaks. The result is the US Treasury is already paying hundreds of millions of dollars to the pulp and paper companies, and inadvertently increasing diesel use along the way. The Washington Post estimates the loophole could result in up to US$10 billion in payments to the 10 largest paper companies. An average size American pulp mill can burn more than 175 million gallons of black liquor a year in its recovery boilers, which implies an annual tax credit of US$90 million each per mill. Most of the large companies own multiple mills. While the whole affair seems something of a comedy, there are ominous signs that this handout could distort world pulp markets, with US companies receiving what amounts
to a production subsidy. Already the Canadian Government has announced a $1 billion package to counter the US loophole. Each Canadian pulp producer will receive 16 cents per litre of black liquor they produce between 1 January and the time the package is used up. The funds are to be invested in projects that reduce energy consumption and increase production of power from renewable fuel sources. They have three years to spend the money and Canadian pulp mills are already bringing forward capital projects to upgrade plant and improve cost efficiencies, and will likely emerge more competitive than ever. A3P chief executive Richard Stanton says there should not be many direct commercial implications for the Australian industry because most of its pulp output is used internally. “However, there are broader implications as
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we watch how different countries support their industries through these financial times.” New Zealand’s only kraft pulp producer, the Carter Holt Harvey mill at Kinleith, relies heavily on exports to Asia, where North American competition is already tough. Despite repeated attempts, our requests for comment were ignored. (Footnote: Reports out of Washington indicate the ‘black liquor loophole’ could be closed by 1 October this year.)
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29
ILLEGAL WOOD
CALL FOR AUSSIE GOVERNMENT TO DELIVER ON PROMISE While the Australian forest products industry strengthens its defences against illegal wood, the Federal Government is accused of dragging the chain.
I
n June, associations representing most of the imported
timber and wood products industry agreed on a joint effort to develop a cross-sectoral Code of Conduct to verify that the wood they import is sourced from legal forest operations. The project will build on existing Australian and internationally recognised industry guidelines, codes, third party certification and responsible purchasing policies. A six-figure budget has apparently been agreed for the Timber Development Association NSW to lead drafting of a code of conduct for the industry. The effort is supposed to support the Australian Government’s commitment to work with manufacturers, wholesalers, importers and retailers of wood to ensure wood coming into the country is from legally verified forestry activities – irrespective of the country of origin. But Australian Plantation Products and Paper Industry Council (A3P) chief executive Richard Stanton says the Government is overdue to deliver on its election promise. “We have been pushing for more action in this area and we are frustrated that they are taking an awfully long time to deliver on that,” he told in-wood. “They are currently preparing a Regulatory Impact Statement, which essentially says here are the options they could adopt to restrict the importation of illegally logged timber, plus an assessment of the costs and benefits of all that.
CALL FOR AUSSIE GOVERNMENT TO DELIVER ON PROMISE
While the Australian forest products industry strengthens its defences against illegal wood, the Federal Government is accused of dragging the chain. 30
in-wood July/August 09
ILLEGAL WOOD
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“It was due at the end of June and still [late July] we haven’t seen it and I understand there will be further delay. I cannot see why the Government can’t take substantive action to address these issues and put some mechanism in place that says, if you are importing product into Australia, you should be able to make some statement about the legality of that material.” Stanton also believes there is a significant misunderstanding of how the major volumes of illegal wood are entering the country. “The focus in a lot of this discussion tends to be on tropical hardwood lumber for outdoor use. I’m not saying that’s not important, but in some respects it is not the main game. “It really is the paper sector that is suffering the most. A3P put its own house in order on this whole issue some years ago with its own set of guidelines. But there are importers of pulp and paper products outside our organisation bringing in a huge diversity of products, including sanitary, printing and writing papers about which there are fundamental questions as to their environmental integrity.”
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PROFILE
THE SCIENTIST BEHIND THE TREE LAB SUCCESS Energy and passion are the characteristics that drive respected biotech expert Dr Jenny Aitken – professionally and outside the lab, as PETER HARINGTON found out.
S
ince founding The Tree Lab Ltd in 2002, Dr Aitken
has spent much of her time cloistered in sterile laboratories, doing the work she loves and building a successful business around biotechnology services for the forest, horticulture and amenity plant industries. The core business of the Rotorua-based company is the transfer of plant material, usually called germplasm, across international boundaries. The
‘raw material’ is in the form of tiny plantlets that have been grown in sterile conditions after being propagated by tissue culture from the ‘mother’ plant. Roots are grown on the slivers of tissue in sterile media in sealed dishes. The germplasm is thus able to meet the phytosanitary requirements at most international borders. That allows Aitken to help forest companies bring new cultivars, species or elite genetic material from other countries’ breeding programmes into their forests. The Tree Lab operates a Level 3 quarantine lab, allowing plant material to be introduced from offshore, propagated for use in New Zealand or reexported. Aitken says the ability to move germplasm freely in and out of New Zealand requires a combination of “complying facilities” (as she has built at Rotorua) and an understanding of the protocols and legal requirements. “A lot of it is about relationships, communication and trust. I have worked closely with MAF people for years and I know them and they have got to know me.”
New species
Dr Jenny Aitken – has replicated her Tree Lab model in Chile
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Aitken and her staff are continually challenged by new species their clients ask them to propagate. “What keeps me motivated is getting a new species to play with,” she says with trademark passion. She is also able to call on an extensive network of colleagues worldwide, knowing that reciprocation will also be required some day. The Tree Lab model has been replicated in Chile to service South American clients more efficiently from within the continent – with the operation guided from New Zealand. in-wood July/August 09
PROFILE
A new project of special relevance to Aitken’s passion for academic research is a collaboration between The Tree Lab and Lincoln University in Christchurch – assessing the potential for introducing endophytes into forest tree species, especially radiata pine.
Returning to pure research will rekindle Aitken’s long-held enthusiasm for leadingedge investigation. The first 20 years of her career were spent at the Forest Research Institute (now Scion) where she was at the forefront of micro propagation research. She then moved
For the forest industry, the payback would be worth millions of dollars if the potential enhancements to growth and resistance to disease and insects can be realised. “Most plants have endophytes (naturally occurring organisms) but this work is identifying the most beneficial combinations.” For the forest industry, the payback would be worth millions of dollars if the potential enhancements to growth and resistance to disease and insects can be realised.
across to CHH Forests to head up its propagation research programme. Ten years later, she went out on her own. In total contrast to her sterile work environment, Aitken spends as much leisure time as possible in the outdoors. She goes to the gym to keep fit and healthy and her brain working,
but her great passion is fishing. As with her work, she takes it on with energy, and no little success: including a recent 6 kg snapper. With her partner and regular in-wood contributor Bill Dyck she fishes the productive waters of New Zealand’s Bay of Plenty near their coastal home, supplemented with trips to fishing hot spots like Great Barrier Island. When we did this interview, Aitken was packing for a trip to Prince Rupert in Canada to chase halibut, one of the world’s great fighting sport fish. “I am taking my ‘tools’ and calling in at a lab in North America on the way home to pick up some germplasm for propagation.”
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SHORTCUTS
THE TREES CAN DO IT
Massive loss of commercial forest to seemingly more lucrative land uses has changed the New Zealand landscape in many regions. But the trees could soon be back. NZ Forest Owners Association (NZFOA) president Peter Berg (pictured) says maximising long-term carbon storage will drive the economics of new Kyoto forests and encourage the planting of indigenous and exotic species other than radiata pine. “There will be a lot more trees in our landscape and our overall land use will be much more sustainable because of that,” he says in reference to efforts to encourage the Government to use trees to reduce the country’s greenhouse gas emissions. “If it gets the policy right, New Zealand will get trees and hill country erosion control at no cost to the taxpayer. The NZFOA is already in talks with officials about these issues and we feel we have been given a good hearing.” His cause is helped by the dairy market collapse.
BAMBOO EVERYTHING The bamboo phenomenon continues, with Nanjing Forestry University announcing in July that it had developed a new type of anti-seismic house built with “re-organised” bamboo-based material. The two-storey building, which features bamboo external walls, hallway, flooring, chairs and decks, stairs, ceiling lining and roof is expected to be used widely across rural areas of northern Jiangsu Province. It will also be cheap – averaging about US$73,000.
STANDARDS ALTERNATIVE Industry's concerns about the standards development process will see more involvement from Forest and Wood Products Australia (FWPA), including a longer-term strategic plan for development and revision. An industry workshop in July agreed that although happy with Standards Australia, use of other SDOs or the creation of a new SDO could be explored.
MORE MARKETING, PLEASE Companies attending the recent round of Export NZ regional forums for CEOs apparently thought now was a good time to devise and implement strategies. They also listed among their priorities “more marketing and PR” to publicise their success stories. We look forward to seeing the results.
ALMOST RIGHT When we reported last issue that German company Lanxess had released a water-soluble flame retardant in Australia for wood products, it generated more ‘heat’ than it should have from people wanting to get hold of the stuff. It seems Disflamoll will be available, but not to the public and not in ready-to-use form as the media release we received implied. It is an active ingredient in timber preservatives.
CONCRETE EVIDENCE Having recently been rapped over the knuckles by the New Zealand Advertising Standards Authority following dubious environmental friendliness and sustainability claims for its product, the concrete industry is back in the ring complaining that wood is getting too many breaks from politicians. The Cement & Concrete Association is challenging a pending Government plan – initiated by the ousted Labour administration – that all new government-funded buildings up to four levels must have a design option specifying wood or wood-based products as the main structural material. The concrete lobby says that is unfair and is also unhappy that the NZ Wood promotional campaign, which costs around $2 million annually, has been so heavily funded by the Government.
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in-wood July/August 09
SHORTCUTS
A GOOD MARKET SUMMARY
With so much conflicting commentary about the economy and how the forest products industry is faring, the following cogent summary from the Australian Timber Flooring Association in its latest newsletter caught our attention: “While the media continues to largely focus on negative aspects … there are good signs that the much-anticipated rebound is closer than once thought, as evidenced by several factors: • government is embarking on the biggest building program in Australia’s history, worth over A$22b • home loan approvals rose for a seventh month as the lowest borrowing costs in 49 years and a short extension to the First Home Buyers Scheme bolster demand among first-time buyers • the 12% consumer confidence jump in May 2009 was the biggest rise in 20 years • Reserve Bank of Australia governor Glenn Stevens believes economic growth will begin accelerating later this year • major trading partners are beginning to show signs of recovery, particularly China and India. “Anecdotally, feedback from members confirms that many are still busy, particularly suppliers and small to medium size contractors. Those feeling some effect of the downturn appear to be bigger contractors, some manufacturers and contractors in areas reliant on tourism.”
LETTER
TOO GOOD TO BE TRUE In-wood continues to be very readable and informative. Congratulations. The collapse of the Australian plantation schemes sounds very similar to the New Zealand plantation bond schemes of the late 1920s and early 1930s. I am pleased in one sense as the Aussie schemes seemed to be too good to be true and horrified in another sense as it has done terrible damage to the image of the plantation industry. I have real trouble understanding how you can make money growing only pulpwood (or biofuels). Wink Sutton Rotorua
MAKING IT TOUGHER
Indonesian forestry minister MS Kaban has announced that all timber products leaving the country must now be certified by an independent body consisting of representatives from the timber business sector and NGOs. The new directive involving new stakeholders in the certification process has apparently been well received by the environmental lobby.
LEFT AND RIGHT HANDS “The problem with communication… is the illusion it has been completed.” Three of New Zealand’s leading wood industry organisations learned what George Bernard Shaw was talking about when they realised they had organised annual conferences on the same days. While the Nelson-based New Zealand Pine Manufacturers Association (PMA) was confirming the details of its event to be held in Wellington, over the strait in the capital the office-sharing NZ Forest Owners Association and the Wood Processors Assn were locking in the same dates for their soirée – yep, in Nelson!
Lowest borrowing costs in nearly 50 years Photo: inwood/images
All say their venues are booked and deposits paid, and the clash is now inevitable – leaving those with dual membership facing something of a dilemma. Maybe a video link? Or is that old technology?
NEW! Wood and Climate Change – how forests can help to save the world.
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