Issue 128

6467

AFS/01-10-01 www.forestrystandard.org.au

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issue 128 | 07.06.10 | Page 1

Tigers, dragons stalk Gunns’ forest assets

This Issue • Illegal logging – fear of self-regulation • New report identifies gaps in education, training

Takeover rumours put industry on edge, threaten Tamar pulp project JOHN GAY’S dream to build a $2.5 billion pulp mill on the Tamar River near Launceston may just be that as four of China’s biggest plantation fibre producers circle Gunns Ltd heightening speculation of a takeover.

As the beleaguered former chairman of Gunns Ltd announced his retirement, wood-hungry Chinese companies with such names as Nine Dragons and Hunan Tiger are stalking plantation forest assets reputedly worth around $1 billion.

Mr Gay walked away from the Gunns board, as well as the

John Gay .. a dream still unrealised.

corporation set up to oversee the proposed pulp mill, on May

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27 – 37 years after he started his illustrious career with the Tasmanian forest giant.

Gunns share prices have been rolling about like peas in a colander every since and around 38% of the company has changed hands over the past week despite speculation of a takeover.

Major shareholder Perennial Investment Partners sold just under 40 million of its shares on May 28, a day when almost 121 million were traded and German-based Deutsche Bank has notified the stock exchange it has bought 44 million shares Cont Page 2

of custody – where to now?

• Demand changing in favour of plantation owners • URS survey – economic growth continues • Timber design awards in full swing

 Chain

www.timberawards.com.au

issue 128 | 07.06.10 | Page 1

industry news

‘Asian buyers are Making unlikely to pursue an a pulp mill project’ impact ..

across Australia’s forest and forest products industry .. since 1940

From Page 1

The Victorian Association of Forest Industries, representing the interests of the Victorian timber Industry

Victorian Association of Forest Industries Level 2, 2 Market Street Melbourne 3000 Tel: +61 3 9611 9000 Fax: +61 3 9611 9011 Email: info@vafi.org.au Web: www.vafi.org.au

Page 2 | issue 128 | 07.06.10

or 5.5% of Gunns.

Although the new Gunns leadership team says it is fully committed to financing and building the pulp mill at Bell Bay, it is uncertain whether an outside buyer would proceed with the stalled project.

One of the big ‘tigers’ eyeing off the rich plantation asset is China’s Asia Pacific Resources International, a leading developer of fibre plantations with one of the world’s largest pulp and paper mills.

Like three other Chinese companies rumoured to be sizing up the Gunns assets, Asian Pacific Resources is likely to be interested only in the plantation wood, shipping it off to China where it has sealed a 10-year multi-billiondollar project finance loan to construct what could be the world’s largest single pulp line.

Backed by the big four Chinese banks – the Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China and China Construction Bank – it would have little trouble financing a buyout of Gunns.

Financial analysts reckon it’s unlikely a buyer such as a Chinese pulp conglomerate would push ahead with a pulp mill in northern Tasmania that’s shrouded in controversy when it has the option to feed its own pulp mill in Asia where there are no strict environmental standards and governance.

Upon completion, Asian Pacific Resource’s second expansion project of its one million tonne pulp line will make the company the biggest pulp production base in China. The existing integrated pulp and paperboard mill in Shandong

How do you employ

apprentices?

Terry Edwards .. Gunns ripe for the picking.

has annual production capacity of 315,000 tonnes of pulp and 170,000 tonnes of paperboard.

With an added investment of about $A200 million on this second expansion, it will bring the annual pulp production capacity to 1.3 million tonnes from both pulp lines.

Other Chinese companies rumoured to be interested in Gunns include Nine Dragons Paper Co, founded by one the country’s richest women Zhang Yin, and Hunan Tiger Forest and Paper, which recently placed a $US126.52 million order with the German-based Andritz AG to purchase equipment and technologies for its pulp mill with capacity of 400,000 tonnes a year of bleached softwood kraft pulp.

Another frontrunner reported to be in the buyers’ circle is Asia Pulp and Paper, ranked one of the largest vertically integrated pulp and paper producers in Asia.

Its combined pulp, paper and packaging capacities in Indonesia amount to more than seven million tonnes, using fibre from plantations and wood residues of plantation Cont Page 3

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industry news

Drive for FCS certification SAVE puts native forests on alert

THE

From Page 2

development. APP currently has its principal operations located in Indonesia and markets its products to more than 65 countries on six continents.

“I must agree Gunns is cherry ripe for the picking, but it’s impossible to predict any outcomes,” Terry Edwards, chief executive of the Forest Industries Association of Tasmania, told T&Fenews.

“Gunns has significant additional assets apart from its strong plantations resource,” he said.

[Institutions have invested more than $451 million in Gunns in the past three years to buy Auspine and ITC Timber].

Meanwhile, environmental groups have stepped up

DATE! 9 September 2010 Sofitel Melbourne on Collins

Chinese plantation workers prepare acacia seedlings at a nursery in Pelalawan, in Riau province. The plantation is owned by Asia Pacific Resources International, a major developer of fibre plantations that is showing interest in the Gunns plantation assets in Tasmania.

campaigns to try and force Gunns to end old growth logging in Tasmania, spurred by the departure of John Gay. Old growth forests are managed by Forestry Tasmania Their hopes are based on the

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interest that Gunns has shown in getting certification from the Forest Stewardship Council aimed at tightening its security on export markets such as Japan.

Old growth is an interesting concept; it doesn’t actually occur in the FSC system. FSC works on the concept of high conservation values. A lot of people regard old growth forest as of high conservation value and that needs to be tested through a certification process.

“We are very concerned about the native forest issue,” Mr Edwards said. “Decisions, good or bad, will transfer to native forest operations on the mainland, particularly Victoria,” he said.

“The issue about native forests is being driven in part by the move to FSC certification and the question about the definition of a high conservation value forest, which at this point is completely unknown.

“It could mean all native forests or it could mean all old-growth forests. It’s an unknown factor and FSC Australia is still trying to work out a definition.”

Mr Edwards said he was closely communicating with industry counterparts in Victoria and with NAFI as the native forests issue unfolds.

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issue 128 | 07.06.10 | Page 3

industry news

Illegal logging: fear of self-regulation Industry tense as it awaits federal policy outcome LONG-ESTABLISHED timber trader Paul Elsmore, chief executive of the Simmonds Group, which operates across the entire eastern seaboard with offices in New Zealand, fears the illegal logging issue in Australia could end up with a system based on selfregulation rather than proper enforcement.

His concerns are expressed ahead of an announcement by the Forestry Minister Tony Burke, expected soon, on the federal government’s official policy on illegally harvested timber and timber product imports.

The announcement, eagerly awaited by the timber importing sector, will follow a final illegal logging Regulation Impact Statement (RIS) presented to Mr Burke by the Department

of Agriculture, Fisheries and Forestry (DAFF).

“I think Labor’s position is a long way from where it needs to be,” Mr Elsmore said in an ABC National radio program

last week.

“I think the Minister is a long way from where he needs to be. And Tony Burke has been to air to say that he is across the top of the issue (and that)

DNA the way to help combat illegal logging .. Paul Elsmore, CEO Simmonds Lumber, with Darren Thomas, managing director of Double Helix Tracking Technologies, Singapore, at the recent supply chain seminar in Melbourne.

government is legislating.

But we’re yet to see strong evidence of that.

“My fear is that it will become voluntary and that there will be no legislation that relates to the point of entry.”

Mr Elsmore said if illegal products were to be stopped coming across the borders of Australia, it really came down to border control.

“In my opinion, it is the only way in which this can be done. All of this product comes across the wharves or borders of Australia, so this material arrives into this country, in a container, and that is where you need to decide whether this product is from an illegal source or is it in fact legal,” he said.

“The importers of such products Cont Page 6

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issue 128 | 07.06.10 | Page 5

industry news

DNA certification small percentage of importing cost From Page 4

need to have the appropriate paperwork in place at that point in time.

“There has to be something in legislation that says this is what we require to determine legality.”

Simmonds Lumber is helping to pioneer a new timber certification system using DNA techniques, an innovative technology developed by the Singapore-based Double Helix Tracking.

Mr Elsmore says any effective system of timber certification needs to demonstrate a clean and transparent chain of custody all the way from the plantation to the point of entry in Australia.

But before doing anything else, he says, we need to demonstrate that the logging concession itself is legal.

Describing the new technology, Mr Elsmore said: “There is a third party auditor, a certification body, that goes into a concession to firstly verify that that concession is in fact legal.

The concession owners and so forth, are paying the royalties, and they’re looking after the indigenous people and so on.

“That is the first part of the audit before we do anything. Once that’s achieved, and it’s a lot of work, it’s a hell of a lot of work to put all of that together, and in fact, to get the concession owners to agree to do so. It’s a big step.

“From there, you need to track the logs from that concession – and some of these concessions are in extremely remote areas – that then have to be audited right through that system until that timber is eventually loaded into the container and sent off

Page 6 | issue 128 | 07.06.10

Michael O’Connor .. sustainability a much bigger and more complex issue than mere legality.

Richard Stanton .. the government should introduce a mandatory requirement on all importers.

to Australia.”

He says a certification system based on DNA sampling works much like pathology tests when you go to the doctor, with samples sealed and sent away to a laboratory.

It’s a small sample, around about the size of 50c piece, that’s taken from the outside level of the wood of the tree.

It’s then packaged, sealed and sent through to the University of Singapore which puts the Cont Page 7

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industry news

CFMEU defends timing on announcement From Page 6

entire database together.

The sample then undergoes the DNA process and then is placed into the database.

“So, you can take a table leg that starts off as a log, it then moves through to let’s say, China, to be further processed, it then moves through to Vietnam to be packaged and so forth. It then comes on down to Australia,” Mr Elsmore explained.

“So you sample the log at the concession level and that sample would be able to be matched when it arrives in Australia, and you could then determine from the database put together by the University of Singapore whether it has come from a legal concession.”

Mr Elsmore said on the program he believed DNA certification would not add significantly to the cost of imported timber, even though it sounded pretty high tech.

“There’s been a lot of reports coming through from the consultants that government have used to say that the cost is horrendous,” he said. “I don’t believe that’s the case. Our cost to our consumer here in Australia, using this technology, in my opinion is extremely low.”

He said as a percentage to the total cost it was a single digit

Andy Roby .. illegal logging reduced along with the reduction in available forest.

number below 5%.

The CFMEU has defended the Rudd government over the time it is taking to announce its illegal logging policy.

Speaking on the ABC program, national secretary Michael O’Connor said Australia needed to be promoting sustainability in countries like Indonesia and PNG; sustainability was a much bigger and more complex issue than mere legality.

“I know that people are impatient about wanting change to happen, but I think the main thing in this area is that dealing with forestry issues in developing countries is not easy, and you need a number of approaches to do it successfully,” Mr O’Connor said.

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“You can’t do that without addressing some of the social justice issues in some of these areas, and if you don’t have any regard for the people who currently rely on forestry operations in Papua-New Guinea or Indonesia, then again I don’t think you’re doing the right thing.

“And so you’d need certainly a legal regime that says that illegal logging is going to be dealt with, and dealt with forcefully by government, and just putting a ban on illegal logging just in itself, without looking at all the other aspects of this problem, is also I think a bit self-centred.”

A3P chief executive Richard ‘My fear is that it will become voluntary and that there will be no legislation that relates to the point of entry’ – Paul Elsmore Stanton said he appreciated the difficulties the government faced on placing a ban on the importation of illegally logged products.

“These products are so difficult to identify, particularly when we’re talking about manufactured wood products or pulp and paper products,” he said.

“But equally we think that the

Dealing with forestry issues in developing countries is not easy.

government should introduce some mandatory measure that applies to all importers of wood and paper products. We don’t think it’s acceptable for it to be entirely voluntary, if you like. So what we think the government could do is introduce a mandatory requirement on all importers that they put in place a system to ensure to the greatest extent possible, that the products that they import do not come from illegal sources. “ Speaking on the ABC program from Washington Cont Page 8

issue 128 | 07.06.10 | Page 7

industry news

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Page 8 | issue 128 | 07.06.10

From Page 7

DC, Democratic Congressman Earl Blumenauer said Australia should lend its weight to multilateral action to end the illegal timber trade.

“This will be essential, because if we have points in the line of defence against illegal logging that are weak, they will be exploited by the cheaters and the criminals,” he said.

“It’s going to end up undercutting what we’re all trying to achieve. So it needs to be comprehensive, it needs to be enforceable, and Australia is positioned in terms of the regard that people have for it around the world, and its geographic location, to be able to have profound impact in changing this unfortunate pattern.”

Dr Mark Zirnsak, director of justice and international mission for the Uniting Church in Victoria and Tasmania said banning illegal timber could achieve a similar outcome to what was achieved by banning blood diamonds.

“There were conflict diamonds coming out of certain countries in Africa, and horrendous human rights abuses. We had countries come together collectively, they worked together, they got approval from the World Trade Organisation, and they set up what was called the Kimberley process, which is still in place today.

“This basically means unless diamonds have been certified through this process, they can’t be imported into the countries that have signed up to the Kimberley process and they can’t be sold there. And it’s had a fantastic impact on combating those conflict diamonds and in curbing the human rights abuses that were attached to

them.”

Indonesian has announced a two-year moratorium on logging old growth rainforests, in a deal with Norway for which Indonesia will be paid more than a billion dollars. And the European Union is engaged in a program called Forest Law Enforcement Governance and Trade, aimed at eliminating the trade in illegal timber.

Andy Roby has been working for the program in Indonesia developing a new accreditation scheme to ensure that only audited legal timber is exported to the European Union, agrees that the situation with illegal logging in Indonesia is improving.

Speaking from Jakarta on the ABC program, he said illegal logging was running at 80% when he started his work there in 2002-2003, and those were government quoted figures.

“Now the government has reduced its estimate of illegal logging to something below 50%, and there’s a number of reasons for that. There’s more law enforcement from the Indonesian government, and we’ve seen that particularly across the border between Kalimantan on the island of Borneo and Malaysia where we know that before a lot of illegal timber was going across that border.

“That’s more or less stopped.

And of course the other reason why illegal logging has gone down is simply the availability of forest has reduced. Most of Kalimantan has been allocated now in concessions. But we are still worried about the timber coming out from land clearance operations, many of which we think are illegal.

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industry news

Report identifies gaps in industry training activities ESTABLISHMENT of an education and training committee is recommended in a new report reviewing current education activities within the forest and wood products sector.

The report by Rob de Fegely is based on more than 80 interviews with industry leaders.

Available on the FWPA website, the report also reviews activities occurring in other countries and other industries within Australia. The review provides a comprehensive catalogue of current activities, identifies gaps and potential areas of investment for FWPA. The report highlighted the wide diversity of education activities from primary and tertiary education, vocational needs of attracting new recruits to the sector, postgraduate and midcareer programs.

The report makes a number of recommendations to overcome existing gaps and identified needs, including an education and training advisory committee; establishment of an up-to-date forest industry website; a limited primary and secondary schools program; as well as a tertiary program incorporating vocational study, university level training and mid-career programs.

FWPA and its predecessor have always had a number of R&D projects as well as activities under the Capacity, Adoption and Promotion program that address needs in relation to education. However, in recent years, FWPA has received increased request from various parties to enhance its role in education support.

“FWPA needs to ensure that measurable outcomes in the

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Weekly distribution is over 6,400 copies, delivered every Monday. Advertising rates are the most competitive of any industry magazine in the region.

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Rob de Fegely .. report focuses on education and training.

area of education can be delivered through collaboration, coordination and focusing on areas where FWPA has a core competency,” FWPA managing director Ric Sinclair said in response to the review.

The recommendations outlined in the de Fegely report will allow FWPA to form a work program and respond to the priorities outlined by federal minister Tony Burke who has requested all R&D corporations take a strong role in educating future scientists, improving the knowledge and skills of producers and encouraging people to work in the sector.

The minister is seeking activity to encourage a diversity of people in primary industries, including a greater role for Indigenous Australians, women and young people.

In addition, an analysis of recent market research commissioned

by FWPA shows that younger people are more likely to have a negative perception of wood products and forest management compared to the overall population.

“This finding reinforces the anecdotal view that younger Cont Page 15

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issue 128 | 07.06.10 | Page 9

issues ‘If all the forest resource that produces the products we are interested in is certified, then we need to undertake a major promotion and education program to advise this. We can then present a position that CoC is not needed for Australian-grown products as they all come from a certified forest’

Chain of custody: where to now?

IT was almost 18 months ago that there were calls for a ‘united industry’ position on the ‘managing the expectation on the take up of chain of custody’.

The response from this exercise indicated that at that time there were quite different and divergent views on this matter.

No industry position was agreed and the process was left to take its own course.

The situation now in 2010 is as follows: AUSTRALIAN forest certification is now more than 90% (10.47 million a total – 9.92 million ha AFCS and 547,000 ha FSC). It is now highly likely that virtually all of our locally

produced timber products come from a certified source.

CoC is still limited, and mainly restricted to sawmillers (first stage processors).

FEW, if any, ‘full supply chain’ CoC links currently exist.

THE Green Building Council’s Mat-8 sustainable timber now recognises both AFC and FSC for one Green Star point – but currently it requires a full CoC. [Concern also is that over the next 12 months GBCA might introduce a ‘residential’ rating tool that has the potential to dramatically increase market demand – as over 80% of timber products are supplied to this market].

THE Queensland Department

More than 90% of Australia’s forests are already certified.

By ALASTAIR WOODARD

Wood Products Victoria TPC Solutions Pty Ltd of Public Works has introduced a ‘Sustainable Timber Policy’ (2009) that says: “The Department will purchase timber from suppliers that can demonstrate the legal and sustainable origin of their timber by way of chain of custody certification...and “In the first year of this policy, it is expected that 60% of the timber procured will be CoC certified timber”.

TIMBER merchants around Australia are now starting to question what CoC is going to mean to their businesses. How practical is it – multiple stocking requirements: uncertified, AFS,

FSC, other? And what is it going to cost?

Merchants keep getting referred to the certification providers AFCS or FSC for answers and solutions (hardly the right source recognising their vested interest) – but a simple, economic and practical approach is yet to be articulated.

Industry needs to get its head around this issue and investigate and develop a better solution NOW. Once an appropriate path is agreed upon, industry needs to spread the word to its own supply chain and ‘manage the expectation around CoC’ with government procurement and green specification developers.

So what is the best approach?

The thought at all times needs to be how do we maintain the credibility of certification while still making it as easy as possible for the customer and the supply chain, particularly the merchant? I suggest some options: No CoC for Australian grown products: 90%-plus of our forest are already certified.

Under this scenario we need to stocktake how much of our product comes from certified

Cont Page 11

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issues

Industry might consider its own ‘Australian certified’ wood brand, whatever the scheme From Page 10

forest – and that product that doesn’t needs to be chased down and the forest if necessary certified.

If a market driver such as the GBCA is successful in generating a demand for certification in the residential sector, I think most consumers/builders will not really care about AFCS, FSC, PEFC or SFI If all the forest resource that produces the products we are interested is certified, then we need to undertake a major promotion and education program to advise this. We can then present a position that CoC is not needed for Australian grown products as they all come from a certified

Packs of different certified products could be bundled and sold together as ‘Australian certified timber’.

Timber merchants around Australia are now starting to question what CoC is going to mean to their businesses and how it might add considerable cost to sorting in the timber yard.

forest (Greens won’t like this as they want the market just asking for FSC).

Last point of transformation: If you have to have some level of CoC then it really should only be up to the last point of transformation where the final product is labelled and branded (stamped) with the certification logo. People that trade in the product beyond that point should not have to have CoC (ie for sawn timber: sawmillers would purchase timber from a certified forest and undertake chain of custody for their own organisation; the sawn timber they produced would be branded with the certified CoC mark – from this

point on, the timber is then clearly recognisable as certified to those who retail it, specify it or use it).

If we are to pursue this approach we would need some strong collective lobbying of government and the GBCA, etc.

Australian certified timber: If a market driver such as the GBCA is successful in generating a demand for certification in the residential sector, I think we would all agree that most consumers/builders will not really care about AFCS, FSC, PEFC, SFI, etc – they will just want ‘certified timber’ (again the Greens wont like this as they want the market just asking for

FSC).

If this is the case, an approach industry might consider would be its own ‘Australian Certified Timber’ brand. Any certified product whatever the scheme (assuming it was credible) could then be over-branded with this mark and sold collectively as ‘Australian Certified Timber’.

This would mean merchants wouldn’t have to keep AFS timber segregated from FSC and packs of different certified products could be bundled and sold together as ‘Australian Certified Timber’.

If you have to have some level of CoC then it really should only be up to the last point of transformation where the final product is labelled and branded Full CoC: A full CoC certification process along the supply chain up to and including the merchant or retailer. Key issues that still need addressing to improve this option include mutual CoC recognition of different certification schemes (so merchants don’t have to segregate AFS timber from FSC), and ‘group CoC certification’ initiatives.

If it’s your timber, make sure it’s in the competition.

Ring the architect, builder or owner; pay the fee; organise the photos.

The 2010 Australian Timber Design Awards is your chance to have your timber products showcased. If you’ve supplied timber or timber products to an eye-catching house, office block or resort development, make sure your contact knows about the Timber Design Awards. Let us know about the project by email at info@timberawards.com.au

ENTRY FORMS AND INFO AVAILABLE AT

www.timberawards.com.au Entries close 16 July

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issue 128 | 07.06.10 | Page 11

Timber & Working with Wood Sydney 18-20 June Entertainment Precinct, Moore Park Adelaide 23-25 July Adelaide Showground Canberra 3-5 September EPIC Centre Melbourne 15-17 October Melbourne Showground 10.00 – 5PM DAiLy

NEW PrOGrAMME FOr 2010!

Neil and Liz Scobie Liz: Artist in Decorative finishes for wood Neil: Maker of fine furniture

Guilio Marcolongo Woodturner

Tim Skilton Woodturner

Patt Gregory Woodwork for Women

Theo Haralampou Woodturner

Stan Ceglinski Traditional Woodworker

Neil Ellis Woodturner restorer/finisher

Kerry Neill Groom Creations

David Foster Restoration & Maintenance Expert

Programme highlights for 2010 include: 2010 Bush Craft Competition • Woodwork for Women • Honey Dipper Competition Joinery Techniques for making fine furniture • How to get a good Finish Painted Textured Finishes for woodworkers • Preparing the Wood • Turn a Table Leg All new for the kids – Ballerina and UFO spinning tops!!

Making, playing and selecting a didgeridoo Full 2010 presentation programme on our website www.eee.net.au Want to avoid the queues pre purchase your ticket online www.eee.net.au

Page 12 | issue 128 | 07.06.10

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BIODIVERSITY

Fish and forests most traded commodities THE use of fish and wood products continues to grow and are fast becoming the world’s most traded commodities in their respective fields.

At the same time, both sectors, crucial to biodiversity, are facing the pressing threat of climate change, according to a report

MicroPro

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aquaculture sectors.

A selection of articles show how ISO standards contribute to harmonising test methods in timber structures, adapting high-tech equipment to tractors and machinery for forestry, thus helping to protecting operators.

ISO’s new work on standards for

A L I VA A W

AUSTRALIA! N I E BL

the growing sector aquaculture are also described.

Bambang Setiadi, the new chair of the ISO committee on developing country matters (ISO/DEVCO) says ISO standards for the more traditional activities of wood products and for the newer enterprise of aquaculture help to ensure business efficiency is balanced by the intelligent and responsible use of resources.

ISO’s standards are powerful tools for taking action and the report showcases stories from companies benefiting from ISO standards, such as a Namibian fish processor and a large Brazilian company in the paperboard market implementing management systems standards for quality and environmental or food safety as well as occupational health and safety.

er & Fastenre r e t t e a B Hardwance** rm Perfo

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Visit: www.osmose.com.au or phone: 1800 088 809 Osmose® and MicroPro® are registered trademarks of Osmose, Inc. or its subsidiaries. A Better Earth Idea from Osmose sm and Treated Wood Just Got Greener sm are slogan marks of Osmose Inc and its subsidiaries. MicroPro timber products are produced by independently owned and operated wood preserving facilities. GREENGUARD® is a registered trademark of GREENGUARD Environmental Institute. * See separate limited guarantee document for more details. ** See MicroPro fastener and hardware information sheet. © 2010 Osmose, Inc._002_0410

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The report also features an exclusive interview with Pieter Burghout, CEO of the Building Research Association of New Zealand (BRANZ) highlighting the benefits of ISO standards “International Standards generally are well recognised worldwide as providing proven industry best practice solutions to building and construction methodologies,” Mr Burghout says.

“In many countries, such as New Zealand, international standards are helping put detail to otherwise non-prescriptive performance-based building codes.”

issue 128 | 07.06.10 | Page 13

industry news

Business confidence high as housing stimulus takes effect Economic growth continues: URS timber market survey ECONOMIC growth in Australia continued to improve, despite the easing of economic stimulus measures by government, according to the URS March quarter timber market survey.

The Reserve Bank of Australia reported that GDP grew by 2.7% in 2009, a substantially better result than the growth reported in many other developed countries, which on average recorded economic growth of 1.3%.

Westpac Economics forecasts Australian GDP to continue increasing to around 3.2% over 2010. However, recent uncertainty in international financial markets associated with the rising risk of default

The March quarter showed general increases in softwood timber prices, reflecting the strengthening of the housing construction market.

of several European countries and the consequent fall in the Euro means the outlook for economic growth in Australia is now less certain.

According to RBA, business confidence in Australia is

China new market for low quality logs FORESTRY Tasmania has loaded a trial shipment of lower quality peeler logs for a potential new market in China.

Managing Director Bob Gordon said the shipment was part of Forestry Tasmania’s ongoing program to find alternative markets for lower grade wood to counter the effects of the temporary international downturn in the woodchip market.

“While these logs are not good enough for the Ta Ann rotary peeled veneer mill, our Chinese customers see potential in using these logs for laminated veneer,” Mr Gordon said.

“The export shipment is also helping FT to meet increasing demand for sawlogs. In order to supply sawlogs economically, we must have customers for

Page 14 | issue 128 | 07.06.10

lower quality wood.”

Mr Gordon said exporting the logs would help familiarise new markets in China with the suitability of eucalypt for LVL .. “and the good news is that in the longer term it will lead to more export opportunities for timber processed in Tasmania.”

The Tasmanian Forest Contractors Association welcomed the trial shipment of lower quality peeler logs.

Executive officer Ed Vincent said embers, were delighted in FT’s success in establishing the Chinese peeler trial.

“Hardwood contractors, who have been greatly impacted by the downturn in international markets, applaud any initiatives that help underpin the forest industry,” Mr Vincent said.

high, driven by strong levels of investment activity in the mining sector. While the mining sector is one of the major drivers of the Australian economy, recent announcements by the federal government to restructure the tax on this sector have the potential to impact future investment plans.

The URS survey says housing prices have been on the rise over the past 15 months, increasing by an average of 15% above the lows experienced in late 2008. Melbourne and Sydney experienced the biggest price increases.

Price rises have likely been driven by a combination of factors including government housing stimulus measures, population growth and the improved outlook for the economy combined with some pent up demand for property following the economic downturn.

Turning to timber commodities, the URS survey showed imports of softwood sawn timber continued to increase in the March quarter from 130,000 cub m in the December quarter 2009 to145,000 cub m.

Historic movements of softwood sawn timber show imports are currently on track to

return to June 2008 levels. The strengthening exchange rate since the March quarter 2009 has contributed to the increase in timber imports. Exports of softwood timber declined slightly over the September and December quarters 2009.

Australian plywood and veneer (including LVL) imports have shown a similar trend to softwood sawn timber this quarter.

The strengthening Australian dollar against the US dollar has provided good conditions for Australian firms to import more plywood and veneer.

In particular, the volume of plywood and veneer imported from the US increased again this quarter, much of which is likely to be LVL products.

Exports have increased over the last two quarters. Although the majority of export volume is veneer (65%), contribution to growth over the last two quarters has been split evenly across plywood and veneer.

The March quarter showed general increases in softwood timber prices, reflecting the strengthening of the housing construction market, says the URS survey.

The prices for major house framing products (MGP 10 and MGP 12) increased. The treated F7 products experienced a minor fall in price.

The key structural products, MGP 10 and MGP 12, have continued their price recovery, but ongoing growth will be needed to match the prices of mid-2008. Most softwood timber products appear to be on an upward price trend, with the exception of Treated F7.

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industry news

International demand changing in favour of plantation owners Perfect storm brewing for forest sector

A PERFECT storm may be brewing for the forest sector, says New Zealand Forest Owners chief executive David Rhodes.

On his return from a world forest and wood products conference in Tokyo he said the balance of international supply and demand appeared to be changing in favour of the owners of forest plantations.

“On the supply side, huge areas of natural forest across the globe are being protected in reserves and national parks.

Also, the international pressure on illegal loggers is finally starting to tell – products from illegally logged and uncertified forests are becoming harder to sell,” Mr Rhodes said.

“Meanwhile, there is growing consumer demand for products that are renewable and recyclable. Also the ambitious bioenergy targets of many countries are driving demand for wood pellets, black liquor and other forest-based fuels.”

Mr Rhodes said burgeoning populations and a growing middleclass, particularly in China, India and elsewhere in Asia, were driving a rapid growth in demand for food and

David Rhodes .. pressure on illegal loggers is finally starting to tell.

fibre from a diminishing area of productive land.

The world population stood at 6.8 billion and was growing by 200,000 a day, with projections that it would peak at 9 billion by 2050. In 1990 there was 7.9 ha of land per inhabitant; in 2050 there would be 1.45 ha.

“Forests and the benefits that flow from them are going to be extremely important in such a world,” Mr Rhodes said.

Also, since most of this growth will be happening in New Zealand’s backyard and in our trading markets, it would appear that forest owners have

a very promising future.”

Running in parallel with the likely increased demand for forest products is growing recognition of the important role forests play in mitigating climate change.

“The forest and wood processing industries provide solutions which are environmentally friendly, renewable and which ensure sustainable growth. All of which contribute to carbon emission reduction,” Mr Rhodes said.

A3P chief executive Richard Stanton, who also attended the international meeting, agreed with the central message that,

at a broad, global level, wood supply is contracting and demand for wood as a raw material for a wide range of products (including energy) is increasing.

“This represents a fantastic opportunity for those who can grow and manufacture woodbased products sustainably and competitively and should have flow-on positive economic, social and environmental benefits in wood producing areas,” he said.

“However, the global numbers are obviously an amalgamation Cont Page 16

Long-term FWPA investment plan From Page 9

people are unlikely to choose to study forestry or seek employment in the forest sector because of their negative perceptions,” Ric Sinclair said.

“However, further market research will be required to understand and validate these perceptions.”

The FWPA board has taken an

active interest in the de Fegely review and will consider a long-term investment plan to address this very important area of activity in a strategic manner that can lead to measurable outcomes.

The de Fegely report can be downloaded from the corporate publications section of the website: www.fwpa.com.au

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issue 128 | 07.06.10 | Page 15

ABARE REPORT

Forest sector investment shrinks, but the signs point to recovery in demand THE effect of the global financial crisis on our major trading partners and a sharp decline in Australian housing activity are impacting on Australia’s forest industry.

Data released in ABARE’s Australian Forest and Wood Products Statistics: September and December quarters 2009, reveal that investment in forestry, log harvesting and forest product exports all suffered significant setbacks in the past financial year.

According to the report, the value of forest product exports decreased by 5.2% in 200809.

“Much of this decline was led by weak demand for Australia’s woodchip exports, the value of which fell by 7% in 2008-09,” ABARE’s deputy executive director Paul Morris said.

“Woodchips continue to account for more than 40% cent of the value of Australia’s forestry exports, and more than 80% of these go to Japan.”

NAFI chief executive Allan Hansard said the slowdown

Wood markets are beginning to recover – but will there be enough of the resource to satisfy future demand?

was mostly the result of the economic downturn in Japan, the main market for Australian woodchips.

“As the economy slows, we use less paper,” he said.

Mr Hansard has been in Japan in recent weeks meeting paper companies at the annual International Council of Forest

and Paper Associations.

He said there were signs demand was beginning recover and the industry’s thoughts were turning to whether there would be enough of the resource to satisfy future demand.

“What we need to do in Australia is make sure we can get good, sustainable investment into forestry and plantation development to meet that future demand,” Mr Hansard said.

Peter Morris said the high Australian dollar and a growing preference for plantation woodchips contributed to the decline. The collapse of two major managed investment scheme companies also contributed to a reduction in new plantation establishment, from 72,000 ha in 2008 to 50,000 ha in 2009.

Additionally, domestic demand for structural timber products declined, mainly because of weak housing starts, which fell by 17% in 2008-09. This reduced demand for sawnwood and wood-based panels, with

consumption of these products falling by 13%.

The weak demand for forest products led to a contraction in forest harvest volumes, from 28.2 million cub m in 2007-08 to 25.2 million cub m in 200809, a fall of 10.7%.

“This is the largest decline in forest harvesting that ABARE has recorded,” Mr Morris said.

The decline in harvest volumes was most pronounced in native hardwood logs for woodchips.

In contrast, logs harvested from plantations increased 6% in 2008-09, mostly because of a large rise in the Western Australian harvest.

“There are signs of recovery in some export categories,” Mr Morris said. “Exports of veneer continued to increase, China’s demand for woodchips continued to grow, and Plantation Energy exported its first significant shipment of wood pellets from its new WA plant to the European market.”

Largest sustained mitigation benefits will be from sustainable forest management From Page 15

of a broad range of individual producers, consumers, markets etcetera. If Australian forest growers and wood products manufacturers are to benefit from this opportunity they have to be internationally competitive and the Australian Government has to provide a stable and supportive environment for the industry to operate in.”

The annual meeting of the International Council of Forest and Paper Associations (ICFPA) and the 51st session of the FAO Advisory Committee on Paper

Page 16 | issue 128 | 07.06.10

and Wood Products (ACPWP) was held in Tokyo, Japan, on May 27 and 28.

‘Forests and the benefits that flow from them are going to be extremely important’ – David Rhodes Major topics included the role of forestry and wood products in mitigating climate change, the production of renewable energy from forest biomass; increasing costs of energy, land, transport and other key production inputs; water management policy; and efforts to eliminate

illegal logging.

ICFPA member associations, including A3P, NAFI, and the NZ Forest Owners, will continue to remind their national governments and international climate change negotiators that the largest sustained mitigation benefit will come from sustainable forest management strategies that maintain or increase forest carbon stocks, while producing an annual sustained yield of timber, fibre or energy from the forest.”

In a statement issued following

the conference, Michael Peter, executive director of Forestry South Africa, said wood was a recyclable and renewable material with a life cycle that doesn’t stop at harvest. In fact, not only was carbon stored in trees but, once trees were harvested, the end products as well as the replanted areas continued to store carbon.

“Whenever consumers buy sustainably grown wood products, they help the forest industry keep forests vibrant and growing through reinvestment and new plantings,” Mr Peter said.

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events

Timber design awards in full swing as entries arrive from across nation

String of sponsors, categories still available ENTRY to the Australian Timber Design Awards has now been open for about a month with submissions coming in from all around Australia.

Category sponsorship from within the timber industry is also proceeding well with only a few categories still available, such as public and commercial buildings, the Rising Star Award (previously Young Designers Encouragement Award) and the Peoples Choice Award.

Confirmed sponsors include many of the major industry producers such as Boral Timber, Hyne, Wespine and Carter Holt Harvey and recycled timber supply icon Kennedy’s Aged Timber.

Industry associations supporting the awards include Decorative Wood Veneers, Engineered Wood Products Association of Australasia and the Australian Timber Flooring Association along with industry leaders Australian Forestry Standard and Forests and Wood Products Australia.

Following the great success of the award’s 10th anniversary last year, the organising committee has decided to continue the presentation of regional awards

Tree of Knowledge Memorial, northern region finalist and overall winner of the 2009 Timber Design Awards as well as the national awards for public and commercial buildings and Best Use of Australian Certified Timber. All the timber was supplied by Kennedy’s Aged Timber.

within the program. These will be available for all seven primary entry categories, along with an overall regional winner.

Presentations will be made in Brisbane, Sydney, Melbourne and Perth in early October.

Michael Green, principal of McFarlane Green Biggar Architecture of Vancouver Canada, who will be touring Australia in September as a lecturer for FWPA’s WoodSolutions 2010 program, will be a guest judge and will

Letterbox House, overall southern region winner last year and winner Best Use of Timber Flooring. Sponsored by Boral Timber, the entry featured spotted gum flooring. Entrant McBride Charles Ryan Architecture also won Residential Class 1 New Buildings.

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join the panel in Sydney for the final selections.

The national winners will be announced at a gala timber industry dinner in the Crystal Palace Room of Sydney’s Luna Park, on October 29 with popular comedian Vince Sorrenti as MC. All sponsors are invited to attend and their participation acknowledged as part of the national presentation program.

Companies wishing to join the list of prominent timber industry sponsoring organisations who are doing their best to help promote and encourage outstanding timber design in the built environment professions should contact TDA in Sydney on (02) 8424 3700.

The Australian Timber Design Awards website provides all the information you, your staff or customers may want to know about the 2010 competition including the entry procedures and conditions, entry categories, sponsors and a full list of previous winners. View www.timberawards.com.au

Blues Point Hotel, central region finalist last year in the public and commercial buildings category, sponsored by Carter Holt Harvey and featuring Shadowclad cladding. The entry won a special judges’ award for an outstanding external application presented to Carterwilliamson Architects.

This year the website will also host the judging of the Peoples Choice Award. From August 1, all entries will go on public view providing a voting process for all website visitors to choose a favourite.

Another recent addition is a Timber Inspiration section in the winner’s gallery. Categories such as landscaping, cladding, flooring or decking can be selected by scrolling through the handy slide show. Find the link at www.timberawards.com. au

editorial inquiries tel: +61 3256 1779

issue 128 | 07.06.10 | Page 17

events

Timber industry awards night puts the WOW factor into your business!

ARE you too busy to think about anything but your dayto-day business operations.

Are these kinds of events ‘just not your thing’?

Well I can tell you why the Queensland Timber Industry Awards are important for industry and what a great evening the gala event is, but perhaps the opinions of your peers and other industry personnel can help to explain why we put so much effort into organising this special occasion and why every sector should join the party: “The timber industry awards function awards excellence in our Industry by acknowledging those businesses that have been judged to be better

than most. Additionally, and perhaps more importantly, it provides an excellent networking opportunity in a social environment across the industry.” – Rod McInnes, Timber Queensland.

“Winning the award for our category twice in a row was extremely satisfying.

From being nominated by our peers, and in some cases ‘opposition’ is an unreal feeling – WOW actually! Then to actually win, it gave us a great sense of pride knowing that we are a leader in our field. The awards are important to show that we are serious about what we do and we care about our industry. The gala evening provides much opportunity to promote our

Sawdust, woodchips powering Ballarat mill A BALLARAT, Vic, timber mill has started generating its own electricity using sawdust and woodchips.

The material is compacted into bricks and fed into a machine set up by green energy company Kinetic Renewables.

Managing director Gregory Paxton says one tonne of waste timber product generates one megawatt of electricity, which is enough to power 600 homes.

He says the technology allows the mill to make good use of its waste materials.

“Normally the site operator would try and sell it into the garden mulching area but .. it’s a very low-level market opportunity there or they would try and burn it off or they would send it to landfill, so this initiative converts what is otherwise classed as waste into a usable fuel to produce electricity in a renewable way,”

Page 18 | issue 128 | 07.06.10

Mr Paxton said.

Timber Queensland has organised a seminar – Bioenergy Under the Microscope: Fact or Fiction? – in Brisbane on July 1 to focus directly on this emerging industry.

The seminar will deliver answers to the who, what, where and why regarding bio-energy products and opportunities, provide an overview of government policies relating to bio-energy and help businesses The seminar agenda and registrations details are available at www. timberqueensland.com.au (tickets $50 members; $90 nonmembers).

More information is available from Timber Queensland’s communications manager Clarissa Brandt on (07) 3358 7906 or email clarissa@ timbequeensland.com.au · See notice P. 15.

By KAREN JOHNSTON

Chief Executive TABMA Queensland industry and showcases those who are trying to be the best they can be.” – Mitch O’Mara, Tradeware Building Supplies.

“I appreciate the awards night and congratulate those who are recognised as being the best in their field. The most enjoyable thing about the annual event for me is catching up with so many friends. There are plenty of industry functions throughout

the year but none like the TABMA Queensland event that brings together people from all aspects of the industry.

The food and entertainment is always good and it’s great to see so many like me that let their hair down on the night.”

– Myles Forsyth, Forsyth & Romano Group.

We also have more event sponsors eager to show their support for industry.

Welcome Tilling Timber, Simmonds Lumber, Thora Wholesale Timbers and ForestWorks. These illustrious organisations join our early-bird sponsors Gunnersen, Timber Queensland, Wade Sawmill, Kennedy’s Classic Aged Timbers and Asian Pacific Timber Marketing.

So though the Queensland market is patchy and times are tough waiting for confidence and activity to surge, know that you have something special to look forward to on October 9.

Hoo-Hoo helping hand

THE president of Brisbane Hoo-Hoo Club 218 Pieter Verlinden (right) presents a cheque for $2000 on behalf of club members to Phillip Dalidakis, chief executive, Victorian Association of Forest Industries.

The donation presented in Melbourne will help pay for the costs associated with putting the forest industry’s case before the Victorian Bushfires Royal Commission. The industry’s submission is expected to cost about $43,000.

The donation adds to $1000 presented by the Jurisdiction 1V division of Hoo-Hoo International. Mr Dalidakis said he was greatly appreciative of the contributions from industry towards VAFI’s case on bushfires and the donation from Brisbane Hoo-Hoo was a great gesture from an interstate organisation.

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Contact: John McLachlan

john@skookum.co.nz +64 274 932 612 New Zealand Geoff Strang Ph +64 9 276 2402 +64 274 304 981

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issue 128 | 07.06.10 | Page 19

G +6

Chain of Custody

BRUKS CHIPPERS FOR SALE

I N F O R M AT I O N S E M I N A R B R U KBrisbane S 8 2 0 • Thursday, August 20, 2009 The Chipper On Logan Conference Centre C MBruks 820 Drum433 Produces High Quality 433Export Logan Road, Stone’s Corner Chips from Slabs and Trim Blocks.

LIMITED TO 60 SEATS

TWO Chippers to Choose from: important and timely seminar, organised by TABMA Queensland, - This One Refurbished in Sweden - will One Good Original helpVery reduce some of the confusion relating to chain of custody. It Condition

will ensure the Queensland timber industry has the information required

Technical Data: with legislation,Key speakers will present information for compliance • 30-60 m³ chips/hr there will be a question and answer forum.

• 2and knives • Infeed opening – 540mmx365mm(WxH) Speakers include: • Max solid wood thickness – 250mm • Colin MacKenzie, manager, timber application and use, Timber Queensland • Chipper drum speed, 720 rpm • Simon General Manager, Engineered Wood Products Association • No. of feedDorries, rollers – 2/4 (upper/lower) • Feedwork power rating – 2.2/4 kW Australasia • Main power rating – 110 kW • Kayt Watts, chief executive, Australian Forestry Standard Ltd (AFS) • Weight – 4200kg

of

• Michael Spencer, chief executive, Forest Stewardship Council (FSC)

Also Available: Registration fee: $65 pp (TABMA member) $80 pp (non-member) • Includes hot breakfast BRUKS 820 tea.

CSNote: Drop Feed DrumBreakfast Chipper and morning Arrival 7:30am.

7:45 am. Presentations begin at 8 am.

RSVP by Friday, August 14, to: Australia Tabma Queensland, PO Box 532, Ph (1800) 600 053 500 Brunswick Street, Fortitude Valley 4006 Tel: (07) 3254 3166. Fax: (07) 3254 4599. Darren Ousey 0407 041 947 Mob: 0438 295 136

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DIRECT PENETRATION via email.

WEEKLY opposed to monthly alternatives.

NEWS that is up to date that will ensure readership.

COST EFFECTIVE advertising rates.

S

Display Ads

Display Ads Minimum 4 issue booking

Full Page Bleed Half Page Vertical Half Page Horizontal Third Page Horizontal Quarter Page Vertical Eighth Page Front Page Third Horizonal Front Page Masthead

Rate per Issue + GST $330 $182 $182 $143 $120 $72 $176 $77

Size Specifications Height x Width 303mm x 216mm 254mm x 93mm 125mm x 190mm 73mm x 190mm 125mm x 93mm 60mm x 93mm 73mm x 190mm 33mm x 45mm

Classifieds

Classified Ads per week

Half Page Vertical Quarter Page Vertical Eighth Page Horizontal Full Page Bleed

$182 $120 $72 $330

220mm x 93mm 107mm x 93mm 51mm x 93mm 303mm x 216m

Extras: Video and Animated ads - Add 20% per issue Artwork Specifications: Please supply all artwork as High Resolution (300dpi) Pdf’s or jpegs.

Send artwork to production@industryenews.com.au

DEADLINES Booking – Noon Wednesday for Monday edition. Material – Noon Thursday Terms: Account Clients- 14 days New Accounts: Payment on Booking All Classifieds- Payment on booking (Credit card preferred)

All prices quoted plus GST and based on Art being supplied.

We can create artwork if required – Eighth/Quarter $44 Half $66 which will be billed if complete art is not supplied to our specifications.

Video: Maximum 3 meg swf file. Animation: gif file Due to the regularity of timber & forestry e news and the tight deadlines no customer proofs can be sent.

Advertising Sales Custom Publishing Group Advertising: Tel +61 7 3256 1779 Email: cancon@bigpond.net.au

T: (07) 32561776

e: cancon@bigpond.net.au

Production T: (07) 3841 8075 3392 9810 issue 128

| 07.06.10 | Page 21

e: production@industryenews.com.au

www.industryenews.com.au