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issue 242 | 08.10.12 | Page 1
Chinese buyers stalking Gunns Government says new investors can ‘pick-up’ on pulp mill project
Big spender .. China buying up resources in Austrralia.
This Issue
•W ood: nature’s stroke of genius • Simon Crean for ForestWorks conference
Approvals point to a soft housing recovery
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A Better Earth Idea from Osmose
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dollar and the considerable money spent on developing the proposed $2.3 billion pulp mill. Chinese paper research and development group Shandong Bohui, with registered capital of more than $77 million, is interested in buying the Bell Bay and Tarpeena sawmills. It is understood there have been high-level discussions in the past week with paper giant around the two mills, which employ 350 workers and have an enterprise value of about $100 million. Chinese business man Hua
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CHINESE buyers are looking to add some of the assets of failed Tasmanian timber company Guns Ltd to their growing Australian resource portfolio that includes forestlands, irrigated cotton, dairy farms, cattle properties and frozen vegetables. Gunns, sinking under a $560 million debt load, was placed into administration on September 25 after losing the support of its banks. Administrators say a number of factors contributed to the company’s demise, including oversupply in the woodchip market, a high Australian
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issue 242 | 08.10.12 | Page 1
INDUSTRY NEWS
Simon Crean to address ForestWorks conference
THE federal Minister for Regional Australia Simon Crean will address industry leaders at the ForestWorks conference dinner at Parliament House Canberra on October 30. Mr Crean is a federal representative keeping a close eye on the IGA process on forestry in Tasmania and he is a strong supporter of the Tamar Valley pulp mill. The minister wants to get the IGA process to a conclusion. “If you’ve got it to a conclusion, why wouldn’t investors be interested in a world-class facility, given the increasing demand for paper and particularly packaging as the middle class of Asia grows?” he says. “And it’s a pulp mill project based on a totally sustainable resource, a pulp mill that would use state-of-the-art technology, world’s best practice, and a pulp mill that would be powered by renewable energy. “You can’t get more sustainable than that, and that’s the environment we have to create, but there are a number of elements that need to come together. “But the biggest advantage for Tasmania, in my view, in terms of securing its future, would be that pulp mill. In it there’s the potential for 3000 jobs, a huge boost for the Tasmanian economy but one where it’s playing to its strength, but doing it from a sustainable resource.” ForestWorks chief executive Michael Hartman said Mr Crean was one of the longest serving and influential ministers in Canberra. “His attendance at the industry dinner represents an opportunity to ensure he has the most current understanding about the ongoing contribution and significance this industry plays in the development of
Page 2 | issue 242 | 08.10.12
Simon Crean .. keynote speaker at industry dinner in Canberra.
Göran Roos .. opening speaker at ForestWorks conference.
Australia,” Mr Hartman said. Internationally acclaimed and world leading expert Professor Göran Roos will present exclusively by video in the opening session of the conference on October 30. His ‘future of Australian wood’
address will have important implications for the industry. Prof. Roos is chairman of VTT International, the global outreach of Finland’ Prof. Roos believes the first key to success is to embrace the fact that the Cont Page 6
5th Annual
INDUSTRY DEVELOPMENT CONFERENCE
Forest, Wood, Paper & Timber Products Industry
30 – 31 October 2012 Hotel Hyatt & Parliament House, Canberra Join together Discover & build opportunities to step up the value chain PRESENTED BY
REGISTRATION & QUERIES: Tel: 1800 177 001 Email: cday@forestworks.com.au www.forestworks.com.au/conference2012
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INDUSTRY NEWS
Pulp mill project resurrected under fresh capital structure? From Page 1
Wang’s Australian registered company Kingsland Timber has reportedly made offers up to $100 million for the Gunns’ Tasmanian and South Australian sawmill assets. The federal government continues to support the controversial Bell Bay pulp mill development; Prime Minister Julia Gillard says the project is ready for another firm to step in. “We continue to support a pulp mill project in this state,” Ms Gillard told reporters in Launceston last week. “Everything we need to do in terms of environmental approvals has been done,” she said. “So it is available for a new investor to come onto the scene and pick up where Gunns has left off and to develop the pulp mill.” Tasmanian Premier Lara Giddings sought out investors for the beleaguered Gunns pulp mill project during a recent trade mission to Asia. She said there were no firm proposals for the pulp mill but that she had raised it as an investment option, along with Tasmania’s dairy and mining industries, during her recent trip to China. Sources close to the industry said Chinese investors were the most likely buyers of not only the timber assets but also any resurrected pulp mill project. Gunns’ receiver KordaMentha said the pulp mill project might be resurrected under a fresh capital structure. Chinese investors have sought agricultural assets in Tasmania before and China’s sovereign wealth fund is poised to invest in Australia’s largest dairy farm, at Woolnorth, in the northwest of the state.
Still hope .. new investors could resurrect Bell Bay pulp mill project.
Forestry operations and increasingly manufacturing is expensive in China, which will need pulp well into the future. Given Tasmania’s proximity to Asia, Chinese interest in Gunns’ timber estate, sawmills and the pulp mill is likely to be high. Sidelining this, several sources have speculated that Gunns permits are not valuable, given the strong community opposition to the project. They say that despite the Chinese need for pulp, a buyer would prefer to build a pulp mill in China, buy Gunns’ forestry estate and ship the woodchips to China rather than deal with the continuing forestry issues in Tasmania Australia has been the biggest single destination for Chinese outward foreign direct investment worldwide over the past six years with investments totalling more than
Lara Giddings .. seeking investors in China.
$US38.4 billion, according to professional services networks KPMG. While China’s investment in Australia has been concentrated in the natural resources sector, the future will be different. Sectors that could increase their potential for greater Chinese investment
‘So it is available for a new investor to come onto the scene and pick up where Gunns has left off and to develop the pulp mill’ – Julia Gillard
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inflows include forest land, agriculture, financial services and infrastructure. During a trade mission to Australia earlier this year, China’s Ministry of Commerce forecast that the country’s private companies and wealth funds would invest up to $560 billion overseas by 2015. KordaMentha’s Mark Korda told the Australian Financial Review the receivers would review the pulp mill project next month with a view to recapitalising it, entering a joint venture or selling the permits to investors. “The pulp mill is a big project, worth several billion, but if someone wanted to invest in the pulp mill project directly they could – this is separate to Gunns’ legacy issues,” he said. Mr Korda added that the goal was to restructure Gunns’ forestry estate, and try to reunite the land and trees. Under managed investment schemes, growers own the trees, but not the land. “The land and trees are likely to be restructured,” he said. “In Timbercorp, the banks and growers agreed to sell everything while in Great Southern the MIS schemes were restructured.” The Greens, in minority government in Tasmania and federally, are against the mill, claiming the project was dead. Greens federal senator for Tasmania Peter WhishWilson said there would be no opposition to a foreign buyer, Chinese or otherwise, if it was looking to leverage Gunns’ assets into local investment and employment, but not if the aim was to resuscitate the pulp mill project. KordaMentha is expected to try to keep the business running as long as possible, and sell the
Cont Page 4
issue 242 | 08.10.12 | Page 3
INDUSTRY NEWS
China slowly buys up Australian land at offers too good to refuse
From Page 3
pulp mill permits. The timber estate could underpin the pulp mill, which was Gunns’ plan originally. Gunns already had accountancy firm Grant Thornton Australia working on an independent expert’s report for managed investment scheme growers. Tony Rundle, Tasmanian Liberal premier from 1996 to 1998, said Chinese interest was most likely in the assets. “Tasmania is desperate for any investment at the moment and any Chinese investment would be significantly welcomed,” Mr Rundle said. “We have seen the success of the Chinese-led bid for Cubbie Station and there is some Australian interest in that – Tasmania is a desperate situation at the moment and
Rich prize .. Chinese investors ‘cotton on’ to advantages buying up of valuable Australian resources.
Concerns that Australian resources will be mined and harvested and taken out of the country
people there would welcome investment, without being sensitive about it.” He predicted more Chinese interest in Tasmanian assets, but accused the state minority government of deterring funds. China is slowly buying up Australian land by making farmers an offer they can’t refuse. Property owners near the NSW township of Gunnedah have become instant millionaires as Shenhua Watermark Coal – a subsidiary of the world’s biggest coal
THE former executives of Gunns Ltd may face a class action lawsuit. National law firm Maurice Blackburn says it is considering whether to sue Gunns’ directors and officers now the Tasmanian timber company has gone into administration. The law firm is representing more than 300 shareholders who claim they have lost millions of dollars because of poor disclosure of the company’s accounts. The group’s lawyers are seeking between $35 and $70 million in damages. Maurice Blackburn principal
Rebecca Gilsenan says the firm is considering pursuing Gunns’ bosses to recover losses if shareholders are successful. She says it will depend on whether Gunns has taken out insurance against such legal action. Former Tasmanian Liberal Premier Robin Gray, former chief executive John Gay and chairman Chris Newman are among those who could be sued. The administrator of Gunns has confirmed the state government is among thousands of creditors who could lose money. About 22,000 ha of state forest
Tony Rundle .. Chinese investment most likely.
company Shenhua Energy – buys land to drill for coal. Forty-
three farmers were happy to sell out to the Chinese in the past two years because they were prepared to pay much more than their property was worth. China has paid the NSW government $300 million for an exploration licence covering 19,500 ha. But the concern is that the Foreign Investment Review Board by allowing overseasowned companies to buy Australian land will see Australian resources mined and harvested and taken out of the country. The sale of massive irrigation farm Cubbie Station in Queensland to a Chinese-led consortium has divided the country on the issue of foreign investment. Federal Treasurer Wayne Swan approved selling Cubbie to a joint consortium of Chinese textile company the Shandong RuYi Scientific and Technological Group and Australian-owned wool and grain marketing company Lempriere.
Gunns executives may face class action
Page 4 | issue 242 | 08.10.12
Daniel Bryant .. Tasmanian government a creditor.
is tied up in Gunns’ plantations which now stand in limbo after the company went into administration last month. The administrator Daniel Bryant
says that makes the Tasmanian government a creditor. “As a landholder they have an interest in this, yes,” he said. Tasmania’s Economic Development Minister David O’Byrne could not say how much money the government stood to lose, but insists it is in talks with Gunns administrators and receivers about several issues. “Our focus is two-fold – it’s about making sure Tasmanian taxpayers’ interests are well served but also that we’re able to maintain a business that can employ Tasmanians,” Mr O’Byrne said.
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WHAT’S ON?
OCTOBER
4-6: Malaysian Timber Council’s (MTC) Global WoodMart 2012, Kuala Lumpur Convention Centre, Malaysia. For further information go to www.globalwoodmart.my. For information about complimentary hotel accommodation and other assistance, including sponsorship invitation and application forms contact John Halkett at john.halkett@bigpond. com or +61 (0)2 9356 3826. Wood Innovations 2012. 10-11 (Rotorua) and 16-17 (Melbourne). Improving international cost competitiveness through smart science, research and technology. New Zealand and Australian forest products companies face increasing competition from low cost producers, and from lower cost, better performing nonwood products. Low costs and high fibre recovery,achieved through process innovation, are prerequisites to competing in today’s global forest product markets. Visit www. woodinnovationsevents.com
14-17: Australian Forest Growers conference. Gympie Civic Centre, Gympie, Qld. More than 50 speakers will present at 20 sessions. Three concurrent streams will feature growing, products and markets and integration. The middle day will feature six field trips heading in all directions from Gympie to examine local growing and processing in action. This will be followed by the presentation of
the national Tree Farmer of the Year Award at the conference dinner. Visit www.afg.asn.au for further information or contact Terry Greaves on (02) 6162 9000 or email terry.greaves@afg.asn. au
18: AFS Ltd certification seminar, Brisbane. An update update on development in certification. Topics include a general introduction to forest management and chain of custody certification; an international context to certification; linkages between certification and GBCA green star, government and company procurement policies, and illegal logging legislation; and general information on how to achieve chain of custody certification. Contact Richard Stanton on (02) 6122 9000 or email richard. stanton@forestrystandard.org.au 25: Australian Forestry Standard Ltd annual general meeting and certification seminar, Melbourne. The seminar will provide members and interested stakeholders with an update on developments in certification and a report on progress in the review of the forestry management standard AS4708. Contact Richard Stanton on (02) 6122 9000 or email richard.stanton@ forestrystandard.org.au
30-31: ForestWorks and First Super 5th annual Industry Development Conference In 2011, Hyatt Hotel and Parliament House. Canberra. This is an important opportunity for all current and aspiring leaders
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EVENTS
of the forest, wood, paper and timber industry to engage in strategic and political debate on critical issues affecting the whole industry in Australia. This year’s conference will consider the future opportunities and challenges for manufacturing timber, wood and paper products in an advanced and multi-speed economy. The conference has been specifically scheduled to coincide with parliamentary sitting week, providing a great chance for industry players, union representatives, policy makers and MPs to gather, network and share ideas on positive future directions for the industry. Registration inquiries contact: The Events Manager at cday@forestworks.com.au or phone (03) 9321 3500.For further information, including announcements of speakers and topics, visit www.forestworks. com.au/conference2012
Australia’s forest, wood, pulp and paper products industry now has a stronger voice in dealings with government, the community and in key negotiations on the industry’s future, as two peak associations have merged to form a single national association. The Australian Forest Products Association (AFPA) has been formed through the merger of the Australian Plantations Products and Paper Industry Council (A3P) and the National Association of Forest Industries (NAFI).
NOVEMBER
AFPA was established to cover all aspects of Australia’s forest industry:
28-29: ForestTech 2012 – Improving Wood Transport and Logistics. Melbourne and Rotorua
- Forest growing; - Harvest and haulage; - Sawmilling and other wood processing; - Pulp and paper processing; and - Forest product exporting.
3: Queensland Timber Industry Awards Night – Victoria Park Function Centre, Brisbane.
December
4-5. Focus on improving transport and logistics in the forestry sector. It will build on the excellent program designed by the Forest Industry Engineering Association. Visit www.foresttechevents.com
For more information on the Australian Forest Products Association (AFPA) or to enquire about membership , please call (02) 6285 3833.
issue 242 | 08.10.12 | Page 5
INDUSTRY NEWS
Industry must compete on value for money: conference speaker
From Page 2
way to compete successfully in a high-cost operating environment is different from competing successfully in a low-cost operating environment The second key to success is strong and sustained enterprise-level productivity performance which requires stable macroeconomic conditions, including sound fiscal management, low inflation and cooperative workplace relations. Since 2008, Australia has gone from having an operating cost environment somewhat lower than that of the US to know
having an operating cost environment that is 50% higher than that in the US and having the third highest operating cost environment after Norway and Switzerland, Prof. Roos says. “This while having a poor productivity improvement decade.” He says industry must compete
Manufacturing is the biggest spender of applied research and innovation with spill-over effects into the rest of the economy
Michael Hartman .. conference opportunity for industry.
on value for money not on cost by producing things that nobody else can produce.
Manufacturing is the biggest spender of applied research and innovation with spill-over effects into the rest of the economy. It is the key driver of productivity improvement. Prof. Roos says manufacturing makes up the biggest share of world trade and hence is critical for export earnings that pay for the cost of imports. Each job in manufacturing generates on average between two and five jobs in the rest of the economy. Each dollar of turnover in the manufacturing sector generates one dollar and two dollars turnover in the rest of the economy.
Ultimatum given on forestry peace talks
THE Tasmanian government is refusing to release vital information to further the forest peace talks until all the negotiators return to the table. The government is not telling the public how many sawmillers applied for a slice of the $15 million sawlog buyback scheme. According to an ABC report, it has now written to the
Page 6 | issue 242 | 08.10.12
environmental and industry groups involved in the peace talks, telling them they will also be kept in the dark until they agree on a date to continue negotiations. It could mean they will never see how many businesses want to get out of the industry. The Forest Industries Association of Tasmania is meeting to decide whether
to permanently stay out of the peace talks. It walked out four weeks ago over the government’s plan to overhaul Forestry Tasmania. The sawlog buyback scheme is aimed at freeing up native forest for possible reservation under the peace talks. Federal Environment Minister Tony Burke has described the exit package as key to
securing a deal. “The information is in with the Tasmanian government; it will be tabled the next time the parties meet,” he said. “The Tasmanian government hasn’t shared it with us. I haven’t been asked it to be shared with us because I think it’s important that the first time that’s tabled is when the parties are there at the table.”
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INDUSTRY NEWS
Green groups exposed in ‘double game’ at Tassie forest peace talks
COALTION forestry spokesman Richard Colbeck has demanded full and honest disclosure of interests by environmental figures around the table of the Tasmania’s teetering forestry talks. He said serious ethical questions had been raised by the forced disclosure of the make-up of the Tarkine National Coalition. “Group spokesman Scott Jordan told journalists the Tarkine National Coalition had an ‘emergency meeting’ on June 1, deciding to suspend its role in the so-called forest peace talks,” Senator Colbeck said. “What we now know is that Dr Phil Pullinger, apart from being a lead environmental negotiator in the talks, is also a member of the Tarkine National Coalition board. “So at the time he’s part of a group headed for the door, he’s keeping his seat at the table.” Senator Colbeck described the situation as a disgrace. “No wonder the Tarkine National Coalition resisted calls to reveal the identity of its board members,” he said. “How can industry possibly
Richard Colbeck
Phil Pullinger
have any trust in the process when key participants are playing two positions at once?” “How could this ever have become an enduring, durable peace deal with that sort of treachery going on? “We have long known of this web that runs through the green movement and suspected double games were being played. “Now we have real proof and it is time for full disclosure of multiple interests by all of the green groups in the talks.”
Bushfire control compromised
THE Tasmanian Fire Service admits its capacity to fight bushfires could be compromised by the big changes in Tasmania’s forest industry. There is concern some forests could be become a high fire risk with the restructure of Forestry Tasmania and the collapse of timber company Gunns. Firefighters are worried they might lose experienced personnel and fire fighting resources from within the organisations.
www.tanalised.com
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issue 242 | 08.10.12 | Page 7
PROMOTION AND MARKETING
‘Wood: nature’s stroke of genius’ Animated film’s message gains a high rating
THE Danish Wood Initiative has produced an eye-catching animation about the most environmentally friendly raw material in the world and the Australian industry is picking up on the message to help further promote the green attributes of timber through YouTube. “Wood – Nature’s Stroke of Genius’ focuses on all the benefits of building with wood. In just two minutes the film tells the great story of why more wood should be used in construction. The film will be on display on the UNECE workshop – Green Life of Wood – that is running in Geneva on October 15. Selected messages from the film include: • Trees and forests play a crucial role in regulating the climate. Through photosynthesis they remove CO2 from the atmosphere, binding it and storing it as carbon. The carbon is held in the forest biomass – that is the trunks, branches, foliage and roots and in the soil. The process is constant and is going on all around us. • In young forests carbon is soaked up or sequestered quickly. In mature forests, sequestration eventually equals decomposition and the carbon balance reaches a steady state. At this point the forest does not absorb any more carbon but it has become a vast carbon reservoir. • Forests cover 4 billion ha of the world’s surface. That’s almost one-third of the total land area. They account for 90% of the annual interchange of carbon between the atmosphere and the land. The amount of carbon stored in these ecosystems is the equivalent of around 4500 giga-tonnes of CO2. That’s more than the total carbon contained in the world’s oil stocks – more than is contained
Page 8 | issue 242 | 08.10.12
Film espouses the environmental benefits of forests.
in the atmosphere of the world itself. • There has been a decline in the world’s forest cover over 8000 years. But we are not looking after them; 8000 years ago half of the world’s land surface was covered by forest. Today that’s down to less than a third. Since 1850, deforestation has released around 120 gigatonnes of carbon into the atmosphere. It’s a grim statistic but deforestation accounts for nearly one fifth of the world greenhouse gas emissions. That’s more than from every car, every boat, every plane in
Morally we have always had an obligation to protect and manage our forests for future generations
Animation promotes the green credentials of timber.
the world. More than the whole of transport sector put together. • The good news is that governments in many countries are seeing the environmental benefits of forests and are working to restore their forest cover. Between 1990 and 2005, the forested areas of Europe grew by 13 million ha – that’s an area roughly equivalent to the size of Greece. Globally, however, the same amount is lost to deforestation every year, and tropical countries are the most vulnerable. On the other
hand, Asia which had a net loss of some 800,000 ha a year in the 1990s reported a net gain of 1 million ha a year from 2000 to 2005, primarily as a result of large scale reforestation by China. • Forests need to be managed using responsible forestry practices. But how do we know that our forests are being managed responsibly? Certification is the best way to prevent illegal logging and it allows us to choose responsibly sourced wood products that we know are from sustainable sources. • We should be optimistic. We know what needs to be done. We need to protect what we already have. We must reduce deforestation and restore more of the world’s forest cover. We should use more wood in place of other materials. We have to plan to adapt to our changing climate. If we get this right and play our full part, the world’s forest sector can help to solve this global problem. • Morally we have always had an obligation to protect and manage our forests for future generations. We now have the power and the strongest possible imperative to do something. Mankind understands its predicament, has the knowledge to see what needs to be done, has the skills and the technology to do it. We now have to show we have the willpower too. If you wish to show the animation on your own website, it is quite easy. Go to Youtube <http://youtu.be/ SQhZ14V7cGw?hd=1>, then find and copy the ‘embed code’ to embed the animation on your own site.
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INDUSTRY NEWS
Up in smoke .. Arauco’s largest plywood plant destroyed by fire.
Arauco fire causes plunge in plywood sales to US market
SOFTWOOD plywood imports into the US have plunged in recent months due to stoppage at Paneles Arauco’s radiata pine plywood mill in Nueva Aldea after a fire. The Foreign Agriculture Service announced that softwood plywood shipments from Chile had tumbled 44% to 93,974 cub m in the first six months of 2012. However, the value of these imports did not fall quite as much, ending up at $US44.5 million. The wide-spreading forest fire destroyed Arauco’s largest plywood plant and damaged the plywood plant’s log yard and some of the company’s radiata pine plantation. A coordinated effort at the Nueva Aldea site allowed Arauco to control and prevent the fire from affecting the pulp mill and other operations. More than 500 fire fighters battled the blaze both inside and outside the complex. About 225 sq km of forests was damaged. The company said no fatalities
dennis@industrye-news.com
or serious injuries occurred. Meanwhile, Uniboard USA LLC, a subsidiary of Pfleiderer AG, has reached an agreement to sell its MDF and thermofused melamine (TFM) facilities in Moncure to a subsidiary of Paneles Arauco. Pfleiderer of Neumarkt, Germany, is going through a massive managerial and financial restructuring. Pfleiderer announced last month that it was looking to sell unnamed North American business. Uniboard’s versatile Moncure plant opened in February this year and represents a $US160 million investment. Though dubbed as the ‘Moncure MDF Mill’, the plant’s more than 36.5 m long Dieffenbacher press also is able to produce particleboard and high-density and low-density fibre board in thicknesses up to about 32 mm. In addition to the Moncure MDF mill, Aurauco also purchased a nearby facility that houses a pair of TFM lines.
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issue 242 | 08.10.12 | Page 9
INDUSTRY NEWS
Approvals point to a soft housing recovery, but banks must respond
THE building and construction industry has welcomed the Reserve Bank’s reduction in the official cash rate of 25 basis points and called on commercial banks to pass the cut onto their consumers. However, despite a rise in building approvals in the month of August, builders remain concerned that lower interest rates have so far failed to lift activity. Chief executive of Master Builders Australia Wilhelm Harnisch praised the Reserve Bank’s sensible and precautionary approach. “The decision [last week] to lower the official cash rate is welcomed by the building industry, which is experiencing
InSurAnce.. It’S All In the SelectIon
Reserve Bank decision better news for housing industry.
a prolonged downturn activity,” he said.
in
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Page 10 | issue 242 | 08.10.12
Wilhelm Harnisch .. commercial banks must pass interest cut onto their consumers
“By cutting rates, the Reserve Bank is endeavouring to strengthen Australia’s non-mining sectors of the economy, particularly dwelling and non-dwelling building as the resources boom
‘Builders across the country are reporting high levels of consumer caution and it is hoped that lower interest rates provide the incentive to kick-start new home buyer action’
starts to level off. “It’s now up to the commercial banks to do their bit and pass on these rate cuts, in full, to their customers, small businesses and home buyers, to help stimulate the economy. “Builders across the country are reporting high levels of consumer caution and it is hoped that lower interest rates provide the incentive to kickstart new home buyer action.” Mr Harnisch said that after keeping some of the previous rate cuts to themselves, there was no justification for banks not to pass these cuts onto consumers. Approvals figures just released by the Australian Bureau of Statistics show an overall increase of 6.4%, seasonally adjusted. Private sector houses fell 0.5% after a small gain in July and residential apartments increased 23% after a massive 40% drop the previous month. Master Builders chief economist Peter Jones said overall the building approvals figures were disappointing and well below par considering the number of rate cuts over the past nine months. “After a significant fall in July, the industry was hoping approvals would bounce back and recover lost ground. An overall increase of 6.4% fails to do that,” he said. “The figures show that previous rate cuts by the Reserve Bank have not worked in terms of boosting new home buyers. It vindicates the Reserve Bank’s decision to cut rates again. “The RBA admits it is cutting rates to try and strengthen the non-mining sectors of Australia’s economy as the resources boom starts to level off. Dwelling and non-dwelling building needs a boost to kickstart activity, if it is to play a major role underpinning the economy.”
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INDUSTRY NEWS
Public feedback on standard AS4708 ready for analysis
THE second public comment period for the revision of AS4708 (Australian Forestry Standard) closed on 1. More than 25 submissions were received and these will now be analysed and considered by the standard review committee which is scheduled to meet in early November. The committee will revise the previous draft of the standard as considered necessary in light of the comments received to product a ‘ballot version’ of the standard. A ballot will then be held to determine whether the committee has reached a consensus in accordance with the procedures. The length of time to complete this process will depend on the nature of the submissions and the committee’s deliberations but it is hoped that consensus will be achieved by early 2013. For more information about the revision of the Australian standard for sustainable forest management email StandardsRevision@forestrystandard.org. au AFS Ltd will host an Australian
sustainable forest certification scheme information seminar In Brisbane on October 18, starting at 2 pm at the Department of Agriculture, Fisheries and Forestry conference centre. The seminar will provide a general introduction to forest management and chain of custody certification and an update on Australian Forestry Standard Ltd’s progress and strategic direction, including a summary of the review processes for AS4707 and AS4708. The seminar will explain: • The benefits of certification and how the system works • How certification fits with GBCA Green Star, Government and company procurement policies and illegal logging legislation • How to apply for certification including the process, what is required, who does the certification, costs involved, how long it takes. Afternoon tea will be served at 3.30pm. Reservations at www. trybooking.com/BXVX
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EO and E1
Gympie meeting looks at hardwood resource
QUEENSLAND’S timber industry plan and future access to the hardwood resource will be examined at a special meeting convened by Timber Queensland in Gympie on October 9. “This is a real opportunity for industry players to discuss just where the hardwood industry is headed and what the supply situation will be into the future,” chief executive Rod McInnes said. The meeting will assess the state government’s promise
to open up sections of the hardwood resource that were shut off from the industry by the previous Bligh government. “The meeting will help put the hardwood industry on a constructive path and allow sawmillers to plan for the future,” Mr McInnes said. The meeting will discuss Crown forest opportunities, utilisation and logging standards, pricing Issues, on-going supply arrangements, private native forests and certification issues.
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EVENTS
Australian Timber Design Awards 2012 The Australian Timber Design Awards at the Museum of Contemporary Art in Circular Quay, Sydney, on September 27, attracted more than 180 architects, designers and builders who mingled with industry leaders at the gala event. Pictured against a backdrop of Sydney Harbour lights are Richard Stanton, national secretary, Australian Forestry Standard Ltd, Lexie Hurford and her daughter Judy Sutherland, and Malcolm Johnston, Melbourne, all from Hurfords Hardwood, based at Lismore, NSW, and David Simpson, Wood Solutions, Melbourne.
Don Martin, southern NSW manger for Hyne (right) presents the Engineered Timber Products Award to Melbourne architect Paul Haar for the Candlebark School Library.
Ric Zen of Zen Architects accepts the Recycled Timber Award from sponsor Michael Kennedy, managing director of Kennedyâ&#x20AC;&#x2122;s Classic Aged Timbers, for the Zen House entry. The Zen House is an uncompromising exercise in cradle-to-cradle recycling to create a contemporary family home imbued with the spirit of the old building. The existing 1970s beach house on the site was not demolished so much as dismantled carefully for re-assembly in the new building. The timber structure relied on solid sections. Hybeams were used for joists and LVL for lintels over large window openings. All the recycled materials were left intentionally raw to express their history and to minimise chemical coatings.
â&#x20AC;˘ A special feature on the category winners in the Australian Design Awards will appear in the next edition of Timber&Forestry enews
Page 12 | issue 242 | 08.10.12
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EVENTS
Australian Timber Design Awards 2012
Andrew Hurford, chairman of the NSW Forest Products Association, presents the award for multi-residential (new buildings) to Marcus O’Reilly for the Ruskin Street Townhouses. Structurally, the building was built exceptionally quickly with much of the time savings attributed to the timber frame design. Western red cedar cladding was chosen to give some civic presence to the driveway space and soften the presence of the garage doors as well as a counterpoint to both the inlaid stone on the driveway and dramatic yellow glass entry doors.
Michael Woodlock (left), business manager, Cabot’s Premium Woodcare (the manufacturers of Intergrain High Performance Timber Finishes) presents the People’ Choice Award to architect Paul Haar and builder Russel Benzie for the Candlebark School Library. The opportunity to vote on this award was given to unique visitors to the timber awards website during August and September. All the entrants where displayed on the site providing up to six images of each project and giving each visitor the opportunity to make one selection only. More than 2500 votes were cast before the voting system was locked down, and the winner found.
Lexie Hurford of Hurford Hardwood, Lismore, NSW, presents the Timber Flooring Award to Gonzalo Gonzalez of Jones Sonter Architects for Knox Grammar Great Hall and Aquatic Centre. Sydney blue gum was used on the stage and around the main entry doors in the hall while perforated and angled plywood timber panels were used on the ceilings and walls. The hall’s eight 3 m high, solid timber doors and large portal entry linings were also made from Sydney blue gum. Angled hoop pine veneer timber wall panels were used between the doors.
National product manager for Design Pine Jeff Price presents the Treated Timber Award to Robert Toland of Toland Architectural Design Partners, Sydney, for the Palm Beach residence.
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issue 242 | 08.10.12 | Page 13
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Page 14 | issue 242 | 08.10.12
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FORESTRY AND FOREST MACHINERY
Divorcing the Greens welcome news for forest sector and jobs
Labor ending a ‘marriage of convenience’
DID you feel the ground move? No, not a seismic shift of the Christchurch kind, but it has moved none the less. And it might at last mean better news for the forest industry and for those who work in it. I am talking about the substantial decline of the Greens in the polls and in recent state and local government elections .. together, I am pleased to say, with the Labor Party finally realising that the Greens are toxic to their future prospects and are going about engineering a divorce from what has always been a ‘marriage of convenience’. According to Newspoll, primary vote support for the Greens has halved from the mid-teens a year ago to around 8%. This decline has been reflected in poor showings at elections from Queensland and the Northern Territory and in recent local government elections in New South Wales. Polling figures suggest that the decline in the Greens’ vote has aided a minor recovery in the ALP federal primary vote, but with most Green preferences going to Labor anyway, this will not greatly assist the Gillard government’s re-election prospects. Support for the Greens appears to have been hit by several factors, including the retirement of former leader Bob Brown and its policy on asylum seekers.
Good news for forest jobs .. federal government – and public sentiment – deserting the Green movement.
Also, government ministers are now publicly turning on their minor coalition partner. Immigration Minister Chris Bowen described their intransigence on offshore processing as “naive and unworkable”. Even the ALP’s left wing has joined in with Senator Doug Cameron saying the Greens had “lost the plot
The clear lesson for both major parties is that long-term harm to your political fortunes is likely to occur from cuddling up to Greens for short-term political advantage
Deep in the Woods with ..
Cheryle Forrester
on climate change and asylumseekers”. Public sentiment towards the Greens has also turned down sharply with letters to editors and published comments now savaging the once inner city darlings. In The Australian, Justin Baulch wrote: “Voters have finally realised the Greens represent negativity: no dams, no uranium, no coal, no offshore processing; no idea”. So the encouraging news for the forest industry – so much in need of something to smile about – is that at a federal level the Greens are now much less likely to run the government’s forestry policy agenda. Hang on in there Tassie and we are likely to see that also occurring as the next state election approaches. So the clear lesson for both major parties is that long-term harm to your political fortunes is likely to occur from cuddling up to Greens for short-term political advantage. Be warned! Distancing itself from the Greens has taken a while, but it’s a lesson now well learnt by the government that I think should be good for forestry operations, wood processing businesses, jobs and country towns. See you again in a couple of weeks.
Charity group grants $2m to forestry projects CHARITY organisation The UPS Foundation will mark Global Volunteer Month in October by giving $2.2 million in grants to fund a forestry initiative. Organisations to benefit include
the Earth Day Network, Keep America Beautiful Inc., National Arbor Day Foundation and the World Wildlife Fund Inc. The UPS Foundation also will start a year-long effort to
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support employee volunteer activities to plant more than one million trees around the world, beginning with tree-planting initiatives in China, Canada, Haiti, the Netherlands, Norway,
Russia, Uganda and the US by the end of 2013. The UPS Foundation is the charitable arm of Atlanta-based United Parcel Service.
issue 242 | 08.10.12 | Page 15
FORESTRY AND FOREST MACHINERY
Contractors are battening down hatches and battling for survival
Komatsu’s Mike Jones says ‘hang in there’
LEADING Australian forestry machinery and equipment expert Komatsu Forest’s managing director Mike Jones has made a candid, unvarnished assessment of the current status of the forest harvesting contracting and related supply and support industries. In a very frank disclosure, Mr Jones said the present business environment for forest contractors was as tough as it had ever been. “The soft housing market, issues with domestic sawmilling competitiveness and the in-roads being made by imported timber products, together with other issues are all combining to make life for forest contractors extremely trying,” he said. “Contractors are battening down the hatches and are in survival mode.” Mr Jones pointed to a number of factors conspiring to make the commercial survival for contractors really challenging and very stressful. “Finance is as hard as it has ever been, with banks being much more conservative with business lending,” Mr Jones said. “This is aggravated by green interests influencing financial institutions not to lend within our industry.” Mr Jones said the “unfriendly attitude” of the federal government towards forestry, plus the bad press generated by the so called ‘peace talks’ and continuing uncertainty about the Gunns pulp mill in Tasmania, were not only impacted badly in that state, but on forestry operations on the other side of Bass Strait. From his international knowledge of forest harvesting,
Page 16 | issue 242 | 08.10.12
Hard yards .. life for forest contractors extremely trying..
Mr Jones complemented the Australian industry. “Globally Australian forest contractors are among the most efficient and I am confident that the fortunes of the industry will eventually improve.” He message to contractors is: “hang on in there.” Mr Jones’s recipe for improving the commercial prospects of forest contractors includes: • The Australia dollar settling back to lower than 90c to the US dollar. • Domestic business lending rates down at least a full percentage point. • Re-introduction of a federally funded first home buyers’
New equipment now available is more efficient and has the potential to generate immediate productivity gains
Mike Jones .. business environment tough for contractors – but hang in there.
grant. • Re-introduction of an investment allowance program on new purchases of at least 25-30%. • Improvements in domestic sawmilling efficiency and international competitiveness. • Government acceptance of the use of timber residues for green energy production – acknowledged globally as a cheap alternative for
clean energy. • The removal of anti-forestry green influences within the federal and state governments. • A less hostile federal government policy framework towards forestry activities. • More sympathetic treatment by financial institutions in relation to machinery and equipment upgrading. • A rebuilding of business confidence among contractors. Unfortunately, Mike Jones said present evidence suggested that contractors were spending substantially higher amounts on repairs and maintenance than was justified in the medium term. “New equipment now available is more efficient and has the potential to generate immediate productivity gains and operational improvements for contractors that would improve their bottom line.” Mike Jones says live demonstrations of new Komatsu log harvesting machinery at AusTimber in Mount Gambier in March had kept the company busy with follow-up inquiries, especially about the Forest Xtreme harvester [PC300LC-8] and the newly introduced Komatsu 398 harvesting head. The 398 harvesting head is well suited to the diversity of logging conditions in Australia and is designed to handle a wide range of plantation and forests situations, from second thinnings through to clearfelling The 398 can work both as a harvesting head or a processor for pre-felled trees.
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Semi-dwarf trees part of genetic green revolution for forest crops Understanding hormones that control growth
The same ‘green revolution’ concepts that have revolutionised crop agriculture and helped to feed billions of people around the world may now offer similar potential in forestry, scientists say, with benefits for wood, biomass production, drought stress and even greenhouse gas mitigation. Researchers at Oregon State University recently outlined the latest findings on reduced height growth in trees through genetic modification, and concluded that several advantageous growth traits could be achieved for shortrotation forestry, bioenergy, or more efficient water use in a drier, future climate. This approach runs contrary to conventional wisdom and centuries of tree breeding, which tried to produce forest trees that grow larger and taller, the researchers note. But just as the green revolution in agriculture helped crops such as wheat and rice produce more food on smaller, sturdier plants, the opportunities in forestry could be significant. “Research now makes it clear that genetic modification of height growth is achievable,” says Professor Steven Strauss, an OSU professor of forest genetics. “We understand the genes and hormones that control growth not only in crop plants, but also in trees. They are largely the same.” In a study published in Plant Physiology, researchers inserted a number of genes into
they would die out. Scientists could also produce trees that might have a larger root mass, which should make them more drought-resistant, increase water use efficiency, increase elimination of soil toxins and better sequester carbon. This could be useful for greenhouse gas mitigation, bioremediation or erosion control.
Professor Steven Strauss .. genetic modification of height growth now achievable.
poplar trees, a species often used for genetic experiments, and valuable for wood, environmental and energy purposes. They described 29 genetic traits that were affected, including growth rate, biomass production, branching, wateruse efficiency, and root structure. All of the changes were from modified gibberellins, plant hormones that influence several aspects of growth and development. The range and variation in genetic modification can be accurately observed and selected for, based on hormone and gene expression
levels, to allow production of trees of almost any height. For example, for ornamental purposes it would be possible to grow a miniature poplar, or even a Douglas fir, as a potted plant. And because height growth, in competition for sunlight, is a primary mechanism that trees use to compete for survival, there would be reduced concern about use of such genetically modified trees in a natural environment. On a long-term basis they would be unable to compete, shaded by larger trees and ultimately
This approach runs contrary to conventional wisdom and centuries of tree breeding, which tried to produce forest trees that grow larger and taller
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Smaller trees could also be selected that have sturdier trunks for some uses in shortrotation plantation forestry, significantly reducing the number of trees blown down by wind. And shorter, thicker and straighter trunks might create higher-value wood products in many tree species, Steven Strauss said. Some semi-dwarf trees produced by conventional tree breeding techniques are already an important part of the horticulture industry, allowing easier harvesting of fruit and higher yields. Genetic modification could add new characteristics and more scientific precision to the process, researchers say.
“The main limitation is the onerous regulatory structure for genetically-modified plants in the US,” Prof. Strauss said.
“Even short, safe and beneficial trees are unlikely to be able to bear the high costs and red tape inherent to obtaining regulatory approval.” – Oregon State University.
issue 242 | 08.10.12 | Page 17
INDUSTRY NEWS
Weyerhaeuser turns part of vast forest estate into thermoplastics Composites for household goods, automotive parts
US-based Weyerhaeuser Co., one of the world’s largest forest products companies, has launched a proprietary, patentpending form of thermoplastic composite that uses sustainably sourced cellulose fibre as a reinforcement additive. The Thrive composites will initially be used in household goods and automotive parts. In addition, Thrive can be used in a variety of composite plastic applications, including office furniture, kitchenware, small and large consumer appliances, and other industrial goods. The cellulose fibre in Thrive composites is sourced in part from some of the 8.94 million ha of forestland that Federal Waybased Weyerhaeuser manages to third-party sustainability standards. The composites offer several advantages over materials reinforced with short glass fibres or natural fibres such as sisal, hemp and kenaf. The product is available in master-batch form for custom compounders and ready-tomould thermoplastic pellets for moulders. “Thrive composites are economical and widely available, and they are low mass yet demonstrate excellent tensile strength and flexural properties,” says Don Atkinson, vice-president, marketing and new products for Weyerhaeuser’s cellulose fibres business. “These composites can improve moulding cycle times up to 40%. Products made with Thrive require less energy to produce and can reduce wear and tear on processing equipment
reduce the environmental footprint of our products while accruing a variety of benefits across our entire supply chain.” Weyerhaeuser will use its substantial pulp manufacturing facilities and well-established global logistics channels to produce and deliver the product to customers around the world.
Weyerhaeuser breakthrough .. thermoplastic composites will come from managed forests.
when compared with those containing abrasive short glass fibres. These substantial benefits create significant advantages for companies looking to reduce their carbon footprints while enhancing performance and productivity.” Thrive composites are currently available as cellulose blended with polypropylene with both high and low melt flow indices. Because cellulose fibres are compatible with various ‘workhorse’ polymers, Weyerhaeuser plans to expand the Thrive line of products beyond polypropylene to a range of hydrocarbon and nonhydrocarbon polymers. “Thrive products readily absorb dyes and offer excellent flowability and thin-section fill, providing manufacturers with considerable design flexibility,” Don Atkinson said. “In addition, Thrive composites are produced using a proprietary process that allows
control of the dispersion of cellulose fibres within the polymer matrix. This allows for a smooth surface finish, which opens up new opportunities for the use of natural fibres in composite plastics. Conversely, if manufacturers prefer the fibres to be visible, they have that option as well.” In addition to enhanced design aesthetics, Thrive products demonstrate consistent performance characteristics from batch to batch, which isn’t always the case with other natural fibres. “Using composites with cellulose fibres makes sense,” says Dr Ellen Lee, plastics research technical expert of Ford Motor Co. “Their excellent thermal stability allows us to extend the range of potential automotive applications for natural fibre materials. With increased use of these renewably sourced materials, we can significantly
The composites offer several advantages over materials reinforced with short glass fibres or natural fibres such as sisal, hemp and kenaf
At the end of 2011, Weyerhaeuser employed about 12,800 employees in 11 countries and generated $6.2 billion in sales from continuing operations in 2011. Weyerhaeuser is one of the largest pulp and paper companies in the world. It is the world’s largest private sector owner of softwood timberland; and the second largest owner of United States timberland, Weyerhaeuser imports timber products from Malaysia, Chile, and Brazil, and has timber operations or offices in 44 American states, Canada, and 18 other countries. The company is one of North America’s largest distributors of wood products; it owns more than 28,000 sq km of land in the US, and holds logging rights to more than 142,000 sq km of land in Canada. Weyerhaeuser has expanded beyond its roots in lumber and wood products; it controls more than 100 subsidiaries in fields such as construction, real estate sales, and development
COPYRIGHT NOTICE Items provided in this section of Timber & Forestry E news are drawn from a number of sources. The source of the item is quoted, either by publication or organizations in line with the practice of fair reporting.
Page 18 | issue 242 | 08.10.12
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PEOPLE
Invitations are due to be sent out, however you can get in early and book your table or seat at this yearâ&#x20AC;&#x2122;s Queensland Timber Industry Awards Gala Evening. rd The event will be held on Saturday 3 November 2012, at Victoria Park Functions Centre. This prestigious industry event will showcase and recognize our industryâ&#x20AC;&#x2122;s finest. This is the ONLY event of its kind for the Queensland Timber Industry and it is our chance to recognize those who excel in their chosen field. Tickets are $143 each or a table of 10 is $1,325 GST inclusive. Phone Alicia on 3254 3166 or email alicia@tabma.com.au Tickets includes 3 course meal, 5 hour beverage package and live band. TABMA QLD is proud to be hosting the event, sponsored by a host of businesses including timber industry and commercial entities.
Brisbane Hoo-Hoo Timber Industry Club 218 Inc.
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