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Friday Offcuts – 5 August 2011

growing trees cutting and milling timber forest products
In this week's issue, NZ Climate Change Minister Nick Smith says that the first annual report on New Zealand’s Emissions Trading Scheme shows it’s working well, that emissions are being reduced and what’s more, it’s driving new investment in forestry and renewable electricity.

He goes on to point out that the record 40,000 hectares of deforestation between 2005 and 2008 has been reversed and since the ETS has been in place, afforestation has increased every year. New Zealand's forest area grew by 4,700 ha in 2010 and is projected to increase by 5,700 ha in 2011 and 7,700 ha in 2012.

However, as pointed out by one of the opposition parties mid-week, it was the impending introduction of an ETS - and the costs that would be incurred by land owners from harvesting or cutting their forests down - that really led to the aggressive deforestation before 1 January 2008. The reversal in new planting – from a very low base – is far from the glory pre-ETS days.

The average new planting rate in New Zealand in fact over the last 30 years has been just over 35,000 ha per year. Between 1992 and 1998, the country was averaging 69,000 ha of new planting each year and in the five years leading up to 2005 the average had dropped, but was still a respectable 18,000 ha per annum. Most of the recent new planting the Minister refers to has also been on high country marginal land where land-owners have been quick to take advantage of the benefits afforded by the new scheme. Perhaps the jury is still out on the success of new forestry planting and forestry investment because of the ETS - but time will tell.

Other stories this week include some pretty innovative developments including a world first - a fast pyrolysis technology that's going to be used to process mallee eucalypts for aviation biofuel - and a prize that’s just gone to a Kiwi forestry worker who’s developed some stainless steel mesh safety goggles out in his back shed. They're now being used in 60 different NZ industries – and around the globe.

Finally, for all those travelling through to NZ’s major Forestry Festival, the three-day event at the Rotorua Exhibition Centre between the 5-7 September, remember that the early-bird rate for registrations to the BNZ One-Day Conference on Timber Design & Construction finish today. For more details and registrations, visit

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This week we have for you:

Clinic combines timber design, grading and treatment

In the long and continuing shadow of leaky building syndrome, coupled with timber grading and treatment issues, one BNZ Tech Clinic at NZ Forest Industries 2011 in Rotorua in September will be a must attend for designers, specifiers and many others in the industry.

Timber Design and Engineering Innovations & Standardising New Timber Grades and Treatments will see Jason Guiver, Director of the NZ Wood Design Advisory Centre, and Scion Timber Engineer Doug Gaunt combine to address a number of the issues.

Jason Guiver will cover several New Zealand case studies, looking at some key design issues that were faced – material, strength, finish and others – plus work that is being done on these issues in Europe.

Doug Gaunt will examine grading methods for structural timber, particularly the suitability of machine stress grading for most, but not all, sizes of structural timber, and the new timber treatment proposals to focus on fitness for purpose and simplicity in framing options.

To register for this Tech Clinic go to

Interest in Australian pulp mills & plantations

In the aftermath of the collapsed Management Investment Schemes (MIS), plantation ownership and management of the Australian timber resources is in a transitional mode, reports the Wood Resource Quarterly. The MIS plantation scheme was launched in 1997 with the objective of pooling funds from small investors to make large investments in forest plantations. The MIS companies established, managed and marketed the timber investments on behalf of the individual investors.

During the period1997 until the partial collapse in 2009, the plantation area in Australia grew from 1.1 million hectares (ha) to about 1.9 million ha, with Eucalyptus being the preferred species planted. At that time, MIS companies managed about 75 percent of the hardwood plantations and six percent of the softwood plantations.

Since 2009, a number of MIS forest companies have gone into receivership, including the FEA Group, Great Southern Plantations, Environinvest, Willmott Forestry and Timber Corp. There are reportedly a number of timber companies and investors showing interest in taking over the management responsibility of the MIS schemes.

Unexpectedly, an investment company in the province of Alberta, Canada, recently announced it would acquire 240,000 ha of timber assets from the largest MIS company, Great Southern Plantations. The institutional investment company, AIMCo, which invests globally on behalf of pension and government funds, will partner with the Australia New Zealand Forest Fund. The new ownership may create a more stable long–term supply source for forest and energy companies located in Asia.

There is continued interest from foreign investors both to acquire pulp mills and forest plantations. The latest development is the Singapore-based pulp company APRIL, with pulp mills in Indonesia and China, which is considering the purchase of forest plantations and export chip loading facilities. The intention would be to export Eucalyptus wood chips to the company’s pulp plant in Rizhao, China.

Plantation Eucalyptus log production in the 1Q/11 was significantly higher than the same quarter last year. This development came at the same time as availability of roundwood and wood chips from natural forests declined substantially. Prices for pulplogs have not shifted much the past year in local currency, with plantation hardwood continuing to be about 24 percent higher for plantation wood compared to wood from natural forests.

Pine and Eucalyptus pulplog prices, in US dollar terms, have climbed steadily in Australia for almost two years, according to the Wood Resource Quarterly (WRQ). Prices are currently the highest ever recorded since WRQ started tracking Australian prices in 1990. During the past nine years, Eucalyptus log prices have more than tripled, with only Sweden, Spain and Germany currently having higher hardwood pulpwood prices.

Source: Wood Resources International LLC,

Revealing the secrets of tree felling excellence

A recent study completed by Scion researcher Richard Parker reveals how experienced tree fellers gain efficiency when using a chainsaw. Parker developed new ways of measuring worker activities using lightweight video cameras attached to the helmet and shoulder of loggers. The cameras recorded exactly what tree fallers were doing and seeing during an average work day, giving an up close and personal view of how they worked.

Results showed that experienced tree fallers felled an average of 34 trees per hour compared with novices who averaged 17 trees per hour. By taking the time to make the first cut correctly, fallers were able to reduce the need to rework and were therefore able to drop trees more quickly.

These results arose from a larger study on tree felling and rural fire fighting recently completed by Parker. For full details on the story and link to the study, check out the latest R&D Works Newsletter.

Virgin Australia developing unique bio-fuel

Virgin Australia have announced that it has partnered with Renewable Oil Corporation (ROC), Dynamotive Energy Systems Corporation (DYMTF) and Future Farm Industries Co-operative Research Centre (FFI CRC) to develop a sustainable aviation biofuel that also has benefits for the Australian farming community and the environment.

In a world first, the consortium plans to use innovative fast pyrolysis technology developed by Dynamotive to process mallees, a eucalypt tree that can be grown sustainably in many parts of Australia. The partnership brings together companies with special expertise in growing, harvesting and processing feedstock into aviation fuel to support the development of a full scale commercial plant in Western Australia.

Virgin Australia CEO John Borghetti said: “Over the past few years Virgin Australia has been working with stakeholders across the industry to research and develop bio-derived renewable fuels that can be used to progressively replace conventional aviation fuels. “We believe this new project has great potential given the results with the technology and the availability of this unique Australian feedstock.

Dynamotive has invested in excess of $100 Million and more than 10 years of work in developing its fast pyrolysis technology from bench-scale through to commercial-scale plants in Canada. The plants are equipped to make pyrolysis oil for fuels and also produce biochar, for soil improvement and carbon sequestration.

Leading the commercialisation of mallees is the Future Farm Industries Co-operative Research Centre (FFI CRC), a national R&D joint venture with experts in breeding, growing and harvesting these trees. CRC CEO Mr Kevin Goss said: “Our research shows that mallees can be planted in balance with profitable crop and livestock production in Australia’s wheatbelt region. As well as becoming a source of biomass for renewable energy they offer protection from wind erosion, help to avoid dryland salinity and provide improved livestock shelter”.

Already more than 1,000 farmers have planted mallees in belts on their farms, mainly in Western Australia. Later this year the FFI CRC partnership will bring the prototype, world’s first hardwood biomass harvester to Western Australia for wide-scale demonstrations.

Renewable Oil Corporation (ROC), which identified the mallee tree as a promising biofuel feedstock, is Dynamotive’s Australian partner and develops biofuel projects in Australia. ROC CEO Colin Stucley summed up: “We are excited about the potential of this consortium. It offers world-class biofuel technology, and a unique Australian feedstock. We look forward to supplying commercial quantities of renewable biofuels for use by Virgin Australia and building this new business.”

The consortium is currently finalising plans for a demonstration unit that will make bio-fuels for testing, certification and public trials. The demonstration unit is intended to be operational in 2012, followed by the construction of a commercial-scale plant, which could be operational as early as 2014.

East Coast forestry block sale approved

The New Zealand Overseas Investment Office has approved the sale of East Coast forestry blocks totalling more than 12,000 hectares, by one foreign owner to another. According to Radio NZ the Trust Company of Australia has been given clearance to sell five forestry sites in the Gisborne and Hawke's Bay regions to the Tiong Family of Malaysia, for NZ$95 million.

Timbergrow Limited, owned by the Tiong Family also own Ernslaw One. Tiong family New Zealand director Thomas Song said the latest acquisition would create work for 30-40 people in the region. The newly-acquired blocks in the East Coast would have a sustainable harvest of 250,000 cubic metres a year, he said. There had been only limited harvesting in them up to now.

Report out on NZ’s ETS

Business opposition to the emissions trading scheme appears to be evaporating, with 63% of business submissions on the ETS review supporting it, compared with 78% opposition prior to its implementation, says Climate Change Minister Nick Smith.

Speaking to an Australasian business and climate change conference in Wellington earlier this week and building on his address at the Carbon Forestry 2011 event last month, Smith said the government would be releasing the report of the review committee and decisions on the future of the scheme next month.

"The report shows 98% of emitters used forestry and other New Zealand units to meet their ETS obligations, with very few using overseas units or the fixed price option. This dispels concerns New Zealanders through the ETS would be paying money overseas and the fixed price option would excessively distort the market".

"The report shows actual allocations to trade exposed businesses was 1.76 million tonnes, 25% less than forecast. The number of businesses eligible for support was nearly 300 - three times greater than forecast. This reflects a large number of smaller businesses, principally export horticulturists, being eligible for support but for relatively small amounts”.

“It is encouraging that New Zealand's net emissions are down for two consecutive years after a 23% increase between 2000 and 2008. We are on target to comfortably meet our Kyoto target with a projected 21.9 million tonne surplus. Without the ETS we would be exceeding our target by 19.5 million units and face international costs of NZ$485 million”.

The Government has received the report of the ETS Review Panel but the Minister has asked that it update its report relative to the recent announcements in Australia on carbon pricing. It’s expected that the outcome of the review and the future direction of the scheme will be announced next month.

The Ministry for the Environment report on the NZ ETS is available at:

The eyes have it with new safety goggles

Phil Hall has won a major prize in the ANZ Flying Start competition for his patented mesh safety goggles, Safe Eyes. Mr Hall's business, Kiwi Ideas, last week was named the supreme winner of the and ANZ Flying Start Business Competition and from 500 entries was awarded a NZ$60,000 prize package.

Phil Hall says he came up with the idea for Safe Eyes goggles when he couldn't obtain suitable eye protection for 24 forestry employees. Workers in his forestry business complained their plastic eyewear fogged up and mesh visors did not keep sawdust out.

He started working on the product in 2001 and continued making the goggles in his shed for his employees. It then kept expanding to other forestry workers as well until it was pretty much fulltime. The stainless steel mesh goggles are now sold in New Zealand, Europe, Australia, Canada and Chile and are used in more than 60 industries throughout New Zealand including forestry, harness racing, water-blasting and mining. The prize will help the winner to extend their international sales reach.

Chinese log prices falling 20 percent

Prices in the market in China have fallen almost 20% in two months but more is to come in August. In the 2011 year to May, China imported 12 million cubic metres of coniferous logs. For the same period in 2010 imports were recorded at 9.2 million cubic metres. So this represents a rise of 30% for the year to date.

Perceived future wood demand created by the Japanese earthquake and tsunami in March may have helped log prices to climb higher during April than they otherwise may have. Prices in the market peaked in April and May which was a month later than they did in 2010. Consequently they have since fallen further and faster in the past two months than they did a year ago.

Exporters had been encouraged by the continuously rising prices during this time and scheduled supply to take advantage of both the prices and the favourable autumn weather in New Zealand. However, now that prices are plunging some may have been forced to accept low prices to maintain market share amongst the hugely competitive supply from North America and other regions.


Gunns' share price drops

Shares in the Tasmanian timber company Gunns took a fall mid-week dropping to their lowest level on record since listing in 1983. Financial analysts put the fall down to the high Australian dollar, uncertainty surrounding compensation from the Tasmanian peace deal and a lack of information for investors on the company's restructure. Yesterday after continued falls, the company called a trading halt before the close of trade. The company line was that the trading halt was to avoid a false market while a federal-Tasmanian agreement to restructure the state's forest industry was finalised.

Headwinds for NZ lumber into Australia

A contracting Australian economy has spelt a contraction in lumber prices in New Zealand’s closest and most valuable lumber market. New Zealand lumber exports to Australia for the five months to May were valued at NZ$94 million. This represents a decline of 10% on the same period a year ago.

Export volumes declined 7.4% over the same period meaning that, per cubic metre, the average value of New Zealand lumber exports to Australia fell 1% to NZ$870/m3. According to the quarterly URS Timber Market Survey prices for all structural softwood timber products in Australia declined in the March 2011 quarter. The decline was led by poor demand in Queensland in the early part of the quarter which was slightly offset by steady demand in the New South Wales and Victorian markets.

Australian dwelling approvals for May slipped 3% from April to be in line with the five?year average for May. For the first five months of the year dwelling approvals in Australia are 13% behind the same period in 2010 but are just ahead of the five?year average. The number of loans approved for the construction of new dwellings in Australia in the first five months of 2011 was 17% lower than the same period in 2010 and 7% less than the five?year average for this period.

Further headwinds for New Zealand product in the Australian market come in the form of foreign exchange rates. The very high Australian currency has allowed product from other regions of the world to compete strongly for market share in Australia.


No change required for pulp mill permit

Gunns has welcomed a decision by EPA Tasmania on 29 July not to vary the permit for the proposed Bell Bay pulp mill. Managing director Greg L'Estrange hoped public confidence in the mill would be stronger following this decision. He says it provides additional independent assessment of the environmental safety and rigour of the Bell Bay mill. Gunns requested a variation to the permit in April and asked for it to be limited to plantation-only feedstock and include an accounting method for some chemical emissions. The submissions and considerations of the issues raised are addressed in the EPA Director's final decision on

Horse logging makes a comeback

Using horses in a woodlot to help logging might be considered old school, but for Aaron Wozniak, it is a task that won't make him rich. Check out the video here. Source: Tree Frog Daily Forestry News

World leading environmental monitoring tool launched

The world’s first real-time, automated, web-based mass flux monitoring solution, which allows users to monitor and analyse the dispersion of pollutants, has been launched in New Zealand.

Trifecta Global Infrastructure Solutions has developed a patented solution, Waiora Earth Monitoring Software, for integrating environmental sensors, web mapping and data processing to deliver real-time contour maps and models of contamination levels and their rate of change.

The New Zealand based software company has confirmed an exclusive agreement with Tuia Group, which will market the ground breaking software. Waiora (meaning pure water) is the world's first internet based solution to generate interactive, real-time outputs based on what is actually happening in the environment. More >>


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Pull Down

...and one to end the week on Italian boys confession

'Bless me Father, for I have sinned.
I have been with a loose girl'.

The priest asks, 'Is that you, little Franky Pagano ?'

'Yes, Father, it is.'

'And who was the girl you were with?'

'I can't tell you, Father. I don't want to ruin her reputation'.

"Well, Franky, I'm sure to find out her name sooner or later so you may as well tell me now. Was it Tina Minetti?'

'I cannot say.'

'Was it Teresa Mazzarelli?'

'I'll never tell.'

'Was it Nina Capelli?'

'I'm sorry, but I cannot name her.'

'Was it Cathy Piriano?'

'My lips are sealed.'

'Was it Rosa DiAngelo, then?'

'Please, Father, I cannot tell you.'

The priest sighs in frustration. 'You're very tight lipped, and I admire that. But you've sinned and have to atone. You cannot be an altar boy now for 4 months.'

'Now you go and behave yourself.'

Franky walks back to his pew, and his friend Joey slides over and whispers, 'What'd you get?'

'Four months vacation and five good leads.'

And on that note, have a great weekend. Cheers.

Brent Apthorp
Editor, Friday Offcuts
PO Box 904
Level Two, 2 Dowling Street
Dunedin, New Zealand
Ph: +64 3 470 1902
Fax: +64 3 470 1904
Web page:

This week's extended issue, along with back issues, can be viewed at

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