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

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issue 144 | 27.09.10 | Page 1

Lifeline for MIS

This Issue

Reprieve for forest schemes in bid to buy back Great Southern plantations

• Rebuilding Christchurch with solid wood • Mid-rise buildings flourishing in British Columbia

By JIM BOWDEN

TWO failed managed investment schemes have been thrown a lifeline in a bold 11th hour bid to raise more cash and reinstate the rights of investors to the plantations. Forest industry champion Tony Jack, the founder of Integrated Tree Cropping, has confronted the receiver of two defunct Great Southern schemes with the plan he has pitched to the 7000-plus investors. The bid by Mr Jack’s Black Tree conduit has the support of most of the original backers, including Bob Bunning of the family that founded the warehouse chain. Great Southern receiver McGrath Nicol is believed to

p India charms wood

have hired a corporate advisory firm to find a buyer for the land on which the trees stand. Great Southern started essentially as an agribusiness

company that managed trees, expanding to horticultural products and cattle and then packaging them as investment

traders • Joe Ludwig hits ground running • Formaldehyde: new laws in US for composite wood • Major life cycle study on American hardwoods • AFS gives status to WA native forests • IFA call for science review of Tassie reserves

Cont Page 10

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issue 144 | 27.09.10 | Page 1


INDUSTRY NEWS

Joe Ludwig hits Making ground running an But there are many impact .. Australia’s questions to answer across forest and forest Please join us! 2010 VAFI

Annual Dinner Friday October 15 Crown Entertainment Complex in Melbourne

Watch this space! More details to follow soon

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 144 | 27.09.10

NEW federal forestry minister Joe Ludwig hit the ground running last week with a visit to Tasmania to speak to forest contractors troubled over the native forest dispute. He met with Rodney Bishop, chairman of the Tasmanian Forest Contractors Association and Colin McCulloch, chairman of Australian Forest Contractors Association and union representatives assuring them that the promised $20 million federal restructuring package was a priority. “The Gillard government recognises the challenges facing the forest industry in Tasmania,” Senator Ludwig said. “I am here to meet our commitment to make this package a priority and to demonstrate to affected communities that we mean to deliver.” ‘Forest contractors have been doing it extremely tough and it is important we move quickly to provide the necessary relief’ Brisbane-based Senator Ludwig also met with state minister for resources Bryan Green and key forest industry representatives in Hobart to commence discussions on the make-up of the package. Mr Green said the state government had provided emergency funding of $5.4 million for contractors and welcomed the federal assistance. “Both the Australian and Tasmanian governments are intent on supporting a

products industry .. since 1940

How do you employ

apprentices? Joe Ludwig .. hitting the ground running on forestry issues.

sustainable and profitable forest industry,” Mr Green said. “Forest contractors have been doing it extremely tough and it is important we move quickly to provide the necessary relief. “We have now asked federal and state government agencies together with union and contractor representatives to formulate an implementation plan to be presented as soon as possible.” Industry has also welcomed acknowledgement by Senator Ludwig that public investment in rural research and development is a positive way in which government can assist producer to develop new technologies and knowledge to better manage risks. Increased government investment in forest and forest products research is sorely needed following the closure of many federal and state research centres, including CSIRO wood research operations. Federal Coalition spokesman for Forestry Richard Colbeck has labelled Labor’s lack of a Cont Page 6

At Tabma we do it all! We recruit We train We mentor We provide reports We develop We rotate if necessary Forget the drama – call Justin Dwyer on (02) 9277 3172 and find out how easy it is for us to do all of it for you.

www.tabma.com.au

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industry news

Formaldehyde: new laws in US for composite wood CONSUMERS in the US living in new homes and buying products made with composite woods like plywood, particleboard, and even furniture, will be breathing a little easier thanks to new limits on formaldehyde passed by Congress and signed into law earlier this month. Formaldehyde gained greater notoriety after it was implicated as the cause of serious respiratory and other health problems among people living in trailers provided by the Federal Emergency Management Agency (FEMA) after Hurricane Katrina. The new legislation, known as the Standards for Formaldehyde in Composite Wood Act, directs the Environmental Protection Agency to adopt standards

Toxic trailers in New Orleans .. all condemned as emitters of high levels of formaldehyde.

already required by the State of California that limit the amount of formaldehyde emissions permissible from composite

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wood products such as plywood, particleboard and medium-density fibreboard. The standards will apply not only to building materials but also to consumer products made with composite wood materials, such as some cribs and furniture, coming on the heels of other new safety standards for these products. Passage of the new law also coincides with the release of a new EPA analysis of formaldehyde toxicity that confirms concerns about formaldehyde’s potential to cause cancer. The US action comes on top of a harsh warning to the Australian timber industry that merchandising falsely represented products to consumers exposes them to the risk of claims for damages for personal injury. Noted Brisbane barrister Nicholas Ferrett, a specialist in commercial law and trade practices, warned that any business or individual importing or selling wood products that did not meet Australian standards, including those requirements for formaldehyde emissions, risked prosecution under the Trade Practices Act.

ForestWorks performs a range of industry wide functions acting as the channel between industry, Government and the Australian Vocational Education and Training (VET) system. Core services: • Skill Standards • Material Development • Networks • Strategic Skills Planning • Project Management • Data Collection • Research • Industry Advice • Career Advice • Adult Learning Expertise

VICTORIA PO Box 612, North Melbourne 3051 Tel: (03)9321 3500 Email: forestworks@forestworks.com.au NEW SOUTH WALES PO Box 486, Parramatta 2124 Tel: (02)8898 6990 Email: smukherjee@forestworks.com.au TASMANIA PO Box 2146, Launceston 7250 Tel: (03)6331 6077 Email: wfoss@forestworks.com.au BRISBANE PO Box 2014 Fortitude Valley 4006 Tel: (07)3358 5169 Email: bharle@forestworks.com.au

issue 144 | 27.09.10 | Page 3


industry news

Solid wood wins favour as Christchurch plans a rebuilding program after quake WHILE the re-build look and design of Christchurch is still being considered by an architectural ‘think tank’, there is growing support among builders, local government representatives and residents that solid wood needs to be the main building material used to resurrect the city after the September 4 earthquake. Lockwood Group chief executive Bryce Heard says the evidence is very apparent that solid wood is the superior building material to cope with New Zealand’s shaky ground. The 7-1 earthquake provided a valuable scientific study of just how well Lockwood homes coped during the initial quake and more than 450 aftershocks. Lockwood has been designing and building solid, secure homes for the past 60 years in many cyclone and earthquake prone parts of the world, such as Asia, the US, the Pacific Islands and the Middle East. Most recently, the company has been invited by Chilean authorities to help rebuild the city of Concepcion after its major earthquake earlier this year, a testament to the multiple benefits of building using solid wood.

Page 4 | issue 144 | 27.09.10

Aftermath of Christchurch earthquake provided valuable evidence on housing structure.

Using wood to help rebuild Christchurch could revitalise a stagnating timber industry, mayoral candidate Jim Anderton says. It would be “a New Zealand solution” to recovering from the worst natural disaster in Canterbury’s history. “Wood is a material whose time has come in an earthquakeprone country,” Mr Anderton said. Wood was environmentally friendly, energy efficient and recent New Zealand research showed building with wood could be 8% cheaper than using steel or reinforced concrete.

Bryce Heard .. solid wood beats the shakes.

“Given our very recent experience in Christchurch,

appropriately designed wooden buildings built for residential and commercial use can also be more earthquake-proof and fire-resistant. “If we in Christchurch rediscover the advantages, beauty and flexibility of wood as a building product, our timber industry will develop as a vibrant, commercially sustainable and internationally competitive sector.” The Lockwood building system ties adjoining pieces of wood together using aluminum X profiles which slide into precision-cut dovetails in opposing pieces of solid timber. By using vertical tied rods within the walls at regular intervals, the walls are tied to both the roof and the floor, providing a six-sided locked together structure. All structural components are machined to precise specifications, inspected, numbered and treated to meet the New Zealand building standards. Lockwood is participating in a team lead by Professor Andy Buchanan of the department of civil and natural resources engineering at the University of Canterbury to review timber buildings.

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events

WHAT’S ON? SEPTEMBER 2010. 30-2 October: The Future of Forestry and Forest Science Conference. Carrillo Gantner Theatre, Sidney Myer Asia Centre, University of Melbourne Parkville campus. The University of Melbourne’s School of Land and Environment and Department of Forest and Ecosystem Science is celebrating 100 years of forestry education. The conference offers past and present students, scientists, researchers, forestry and environmental professionals, and government policy makers an open forum to reflect on the development of forest science and forestry education over the past century and consider the future of forest science in order to meet the needs of future generations. Guest speaker Prof. Tim Flannery. Visit: forestry2010@ eventplanners.com.au

OCTOBER 2010 6: Forestry GIS conference. Waiariki Institute of TechnologySchool of Forestry, Rotorua, NZ. Visit: www.scionresearch.com/ general/news-and-events/events/ forestry-gis-conference-2010 8: Multinail machinery open day. Stapylton, Queensland. Working display of next generation of truss machinery, including the Mini 10 table press, the MAC saw, the Roller Master system, and the VectorSaw. Barbecue lunch provided. Visit: www.multinail. com.au 9: Queensland Timber Industry Awards Dinner. Sofitel Brisbane Central, 249 Turbot Street, Brisbane. Contact: TABMA Queensland. Tel: (07) 3254 3166. Mob:0438 295 136. www.tabma.com.au

12: ForestWood 2010. A pan-industry conference jointly hosted by the Forest Owners Association (FOA), Wood Processors Association (WPA), Pine Manufacturers Association (PMA), Forest Industry Contractors Association (FICA) and supported by Woodco, NZ Farm Forestry Association (NZFFA) and Frame & Truss Manufacturers Association (FTMA). Venue: Museum of New Zealand Te Papa Tongarewa in Wellington. 15: VAFI annual dinner. Crown Entertainment Complex, Melbourne. Contract: Victorian Association of Forest Industries.Tel: (03) 9611 9000. Email: info@vafi. org.au Web: www.vafi.org.au 15-17: Melbourne Timber and Working with Wood Expo, Melbourne Showground, Melbourne. Contact: (02) 9974 1393. Fax: (02)9974 3426 Email: info@eee.net.au 16: Back to Creswick. A day of centenary celebrations, children’s entertainment, campus, nursery, bush tours, major historical exhibition at Department of Forest and Ecosystem Science, (formerly Victorian School of Forestry), Creswick. 19-20: MTC Global Woodmart: Gateway to International Wood Markets. The first ‘one-stop’ selling and buying platform for all suppliers and buyers of wood and wood products. Early bird discount 5%. Organised by the Malaysian Timber Council at the Kuala Lumpur Convention Centre, Malaysia. Contact: Malaysian Timber Council. Tel: +60 3 9281 1999. Fax: +60 3 9289 8999. Email: council@mtc.com.my Web: www.globalwoodmart.my

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29: TABMA annual dinner. LunaPark, Sydney. Incorporating theAustralian Timber Design Awardspresented by TDA NSW. Dinnersupported by TDA, NSW Forest Products Association and FWPA. Contact: TABMA on (02) 9277 3172

NOVEMBER 2010 3-5: The Status and Trends of the Global-Pacific Rim Forest Industry: The Role of Australia and New Zealand. Bayview Eden Hotel, Melbourne. Speakers: Dennis Neilson, director, DANA Ltd, New Zealand and Jim Stevens, manager, global business development, The Campbell Group, US. Field trip to Midway’s hardwood woodchip export operation; softwood woodchip export operation owned by SPE Management; and Pentarch’s llog export fumigation and loading operation. Contact conference organiser Pamela Richards. Tel: 61 3 5781 0069. Email: enquiry@prcc. com.au 8-9: The Status and Trends of the Global-Pacific Rim Forest Industry: The Role of Australia and New Zealand. Energy Events Centre, Rotorua, NZ. Speakers: Dennis Neilson, director, DANA Ltd, New Zealand and Jim Stevens, manager, global business development, The Campbell Group, US. Field trip to Red Stag Timber Ltd’s sawmill and planer mill at Waipa; Pprt of Tauranga (world’s largest export log port); lunch at Mills Reef Winery. Contact conference organiser Pamela Richards. Tel: 61 3 5781 0069. Email: enquiry@prcc.com.au

SUSTAINABLE. sustainable. responsible. . RESPONSIBLE The National The National Association of of Forest Association Industries (NAFI) Forest Industries (NAFI) represents is striving for an Australian companies, ecologically sustainable individualssociety and Australian organisations involved achieved through in thedynamic, forestry and forest products internationally industries. competitive forest industries. NAFI works with state and federal governments to support interestsis of to its NAFI’sthemission members while the same represent theatinterests time improving industry of members by standards and practices, promoting the promoting sustainable environmental forestry management and educating the broader sustainability and community on theof the prosperity economic, environment Australian forest and social benefits of industries. a strong sustainable forest industry. National Association of The National Association Forest Industries Ltd of Forest Industries (Est. 1987) Ltd (EST.1987) PO Box 239, PO Box 239, Deakin ACT 2600 Deakin, ACT 2600 Tel: (02) 6285 3833. Tel: (02) 6285 3833 Fax: (02) 6285 3855 Fax: (02) 6285 3855 Web: www.nafi.com.au www.nafi.com.au Web:

issue 144 | 27.09.10 | Page 5


INDUSTRY NEWS

Forest industry in dark on federal support: Colbeck From Page 2

forestry policy as “disgraceful”. “Labor’s complete lack of a forestry policy is all the more scarier now they are in a formal alliance with the Greens whose number one aim is to destroy the industry and its jobs. “The forest industry is in the dark as to how the new Gillard Labor government will support the industry, if at all. That is no way to treat a $23 billion industry which employs more than 76,000 Australians.” Senator Colbeck said the only commitment Labor made to the industry was a last-minute, panicked announcement of $20 million for Tasmanian forest contractors to match the Coalition’s already announced policy. ‘When will the promised $20 million be made available to Tasmanian forest contractors and who will be eligible for funding?’ – Richard Colbeck “Minister Ludwig is city-based and has limited knowledge of the forestry industry, but that is no excuse for Labor’s policy vacuum,” he said. Senator Colbeck called on minister Ludwig to answer the following questions: • Does he support the five principles proposed by the Institute of Foresters (Tasmania) before the government agrees to any further forestry lockups? (See Page 14). • When will the promised $20 million be made available to Tasmanian forest contractors and who will be eligible for funding? • Does he support long-term regional forest agreements to give investment certainty to the

Page 6 | issue 144 | 27.09.10

Richard Colbeck .. questions to answer.

industry? • Will he provide assistance to small sawmilling businesses to attain international forestry certification? • Does the new Labor government support forestry managed investment schemes with enhanced safeguards ensuring ongoing resource for the industry? • Will he join the industry in supporting amendments to renewable energy legislation allowing for wood biomass to benefit from energy incentives available to other renewable energy sources (as already occurs in Europe) • Will the government provide funding to help build the University of Tasmania’s timber engineering centre of excellence? • Can he guarantee the ongoing operation of ForestWorks – the industry’s successful skills council? • Will he be providing additional funding to the industry’s R&D authority, Forest and Wood Products Australia to increase research capacity for the sector?

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GLOBAL OUTLOOK

India charms wood traders Hungry housing programs, growing real estate sector gobbles timber production

By JIM BOWDEN

“THEY should have used wood,” mused the Indian engineering student who works at our local coffee café as he lamented the collapse of a steel roof that could jeopardise the opening of the Commonwealth Games in New Dehli next month. I smugly agreed, admitting the roof’s collapse was probably more about workmanship than structural failure, although I told the student I would like to quote him! The Indian engineering company that built the roof also designed a steel-support pedestrian bridge that buckled and caused injuries, raising serious questions about the integrity of the structures. These events put a focus on the booming construction sector in India – the world’s second most populous country with an estimated population of 1.2 billion – that is driving a massive housing program based on .. WOOD. As a result of the growing housing and tourism sectors and rising per capita incomes, furniture sector output is expected to grow by 15% a year for the next five years. Government programs to rush the building of more sawmills in plantation estates will satisfy only a fraction of a market now absorbing wood at record levels. With net annual population growth of 1.5%, India gets more than 15 million new residents a year. Because incomes are rising there is a massive demand for housing and as a result, the construction sector

is booming, marking a 6.5 % growth for fiscal year 2009-10 against 5.95% for 2008-09. Over the next five years, the housing sector’s contribution to GDP is expected to grow to 6% and attract investments up to $US12 billion. Australasian wood producers have dabbling in the Indian market for the past five years, spearheaded by a New Zealand push on prefabricated houses. The NZ-based Lockwood Group introduced its innovative timber building system in India a few years ago. Walls are locked together using an aluminium profile that slots into machined grooves in solid laminated New Zealand pine. Like modular kitchens and bathrooms, prefabricated timber houses are made by using pre-designed wooden building blocks. These are fixed by a special Lockwood technology without the use of nails, cement or steel in just two months. Tests by the Indian Forest Research Institute tick the treated pine for its suitability in Indian conditions and show the structures are also resistant to earthquakes. But there hasn’t been a concerted wood marketing drive into India since former NZ

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New Zealand ‘wood-locking’ technology is helping boost demand for prefabricated structures in India’s exploding housing sector.

forestry minister Jim Anderton took a trade mission there three years ago. Carpe diem – seize the day. Rapid urbanisation in India means the commercial real estate sector is also estimated to increase – at an annual rate of 20-22%. Construction of airports, universities, special economic zones, sports centres and housing are expected to attract investments worth $US9 billion by 2013. As the US limps along with double-dip economy fears, India’s economy grew almost 9% this year and that’s extremely fast. In 2008, China’s GDP was just

a bit more than three times that of India. If India’s GDP grows at 8% to 9% a year over the next decade – a reasonable prediction based on analyses by the US National Intelligence Council – GDP in 2020 will be almost the same as China’s in 2008. Of course, China would have powered ahead by then, but the fact remains that India’s economy is about 12 to 14 years, not decades, behind China’s. In 2009, India’s nominal GDP stood at $US1.243 trillion, which makes it the 11th largest economy in the world. If purchasing power parity is taken into account, India’s economy is the fourth largest in the world at $US3.561 trillion. In other words, India is going to gain more and more attention in the coming years as a factory for the world – just like China did in the late 1990s. [China’s softwood log imports were 11 million cub m in the first half of 2010, up 17% over the same period in 2009, says ITTO. Hardwood log imports were 5.3 million cub m, up 47%. Of the total hardwood logs imports, tropical logs were 4.4 million cub m, growing 56% in the first half of 2010 from the same period in 2009]. There are 35 million-plus cities in India, the largest with populations of more than 10 million each being Mumbai, Delhi and Kolkata. Manufacturing, not technology, is the single largest component of India’s already-huge economy. ITTO says India’s furniture industry output value is estimated at $US8 billion for fiscal 2009-10, with products Cont Page 8

issue 144 | 27.09.10 | Page 7


GLOBAL OUTLOOK

Hungry housing programs, growing real estate sector gobbles timber production From Page 7

sold worldwide. As in many other timber processing sectors in India, the share of small and medium sized companies in the furniture sector is high accounting for around 85% of the total output, while the balance comprises large and organised manufacturers and exporters. As a result of the growing housing and tourism sectors and rising per capita incomes, furniture sector output is expected to grow by 15% a year for the next five years. Large scale plantation areas managed by industries and farmers have been promoted by the government to increase the wood supply. The present sustainable harvest from agroforestry plantations is around half a million cubic meters a year. As a result of improved wood availability, more than 150 sawmills have been reopened. Another growing sector in Indian domestic and export market, says ITTO, is paper-plastic laminates. Production value was valued at $US430 million in 2009-10 and is expected to grow 8% a year. Similarly, the manufacture of overlaid particleboard is increasing. These boards are mostly used by the furniture industry supplementing the use of solid wood. Laminated flooring panels made from engineered wood are also in fashion replacing the solid wood flooring. India is one of the largest consumers of all varieties of tropical wood and timber products imported mainly from Malaysia, Myanmar, Indonesia, Nigeria, Ghana, and South and Central American countries. Despite the growing sector of alternative products, India is expected to continue increasing the importation of tropical wood and timber products well into

Page 8 | issue 144 | 27.09.10

Agro-forestry systems, such as this high-yield two-year-old eucalypt plantation with annual wheat intercrop in Punjab is helping to meeting India’s insatiable demand for timber products.

the future. However, India’s achievement in rising forest plantations, in terms of area, has been impressive. According to available figures from India’s ministry of environment and forests, the total area of tree plantation, under different schemes, is 23.38 million ha. Of this, 3.54 million ha was raised before 1980, 13.51 million ha during the 1980s, and the rest during the 1990s. Current annual rate

of planting is about 1.2 million ha. The quality of these plantations varies considerably; there is a contention that forest plantations can, to some extent, compensate for the deforestation and forest degradation. Equally anchored, is the view that forest plantation cannot compensate for environmental and conservation values of natural forests. The ministry stresses that India’s forest plantations are a means

to meet the increasing demand for the industrial raw material or for direct consumption (fuel wood) but they cannot claim restoration of bio-diversity and other environmental services. Moreover, the performance of forest plantations in India, in term of survival, growth and ideal, has been poor. Based on the survival rate and stock density, the affective area of forest plantations has been estimated to be about 11.0 million ha or about 40-50% of the recorded total. The MAI of forest plantation in India varies from about 2 cub m/ ha a year for valuable timber species to about 5-8 cub m for eucalyptus and other fastgrowing species. This compares to an MAI of over 10 cub m/ha a year and about 50 cub m for good quality industrial plantations in different countries and more than 70 cub m/ha has been reported in certain cases. By any measure, the performance of forest plantations in India is far below the potential.

FTMA’s field trip is fit-for-purpose A ‘FIT-for-purpose’ survey by the Frame and Truss Manufacturers Association of Australia suggests there is some confusion in industry about what timber does and does not meet Australian standards. “Discussions with members has shown the confusion may lie with consumers in relation to what they visually accept as acceptable timber,” FTMA executive officer Kersten Gentle said. FTMA is now organising a tour of the Hyne Tumbarumba mill and the Carter Holt Harvey Tumut mill in November to give members a first-hand look at the latest timber processing technology.

“Hyne and Carter Holt Harvey have both put a lot of work in to ensuring their milling processes produce high quality timber graded according to the Australian standards,” Ms Gentle said. “One piece of timber may be scanned up to 16 times as it travels through the mill ensuring that any defects are picked up.” The tour from November 18 to 19 includes a ‘fit-for-purpose’ dinner sponsored by Carter Holt Harvey Woodproducts Australia and Hyne. The dinner on November 18 includes a panel discussion on Australian standards relating to the frame and truss industry. Speakers include Nick Livanes,

FTMA’s representative on the three Australian standards committees, Peter Juniper, manager, solid wood, A3P, Kim Harris, market and compliance manager, CHH Woodproducts, and Stephen Holtorf, Hyne’s technical and services manager. “It is important our industry understands wood and understands the processing and the different treatments so we can proudly promote our product as the sustainable alternative to steel framing,” Ms Gentle said. Contact Kersten on: (03) 5962 3453 or email kersten@ ftmaaustralia.com.au

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industry news

Professor Michael Archer .. climate change address at AFG conference.

Kangaroo farming advocate keynotes forestry conference A FORMER director of the Australian Museum and strong advocate for kangaroo farming will be the keynote speaker at this year’s Australian Forest Growers national conference at Mount Gambier next month. Professor Michael Archer, a world-renowned expert on invertebrates and author of a number of books, including two with former Australian of the Year Tim Flannery, will discuss future approaches to climate change in an environmental context. Diana Lloyd, chair of the conference organising committee, said Prof. Archer was already proving a tremendous drawcard for the conference and was a perfect fit for the theme ‘Integrating our Resources.’ “What we want to reflect with our conference program is that not only is forestry a sustainable industry, it’s one that can easily complement existing land uses to the benefit of agriculture and wildlife among other things,” Ms Lloyd said. “There remains a huge amount of opportunity in the industry now and into the future.” Ms Lloyd said that although most people thought of the larger corporate owned plantations when they thought

about forestry, there were a range of different situations in which trees were being grown for commercial purposes, especially farm forestry. “You might have a farmer who plants out a small woodlot that functions initially as a shelter for stock, but later becomes a resource that can be harvested for firewood or saw logs,” she said. “A number of our members manage private native forest, and again, these might have multiple benefits for biodiversity and also provide beautiful pieces of timber for furniture. “There really are no hard and fast rules for commercial forestry – our growers do it in a variety of different ways for a variety of different reasons. This conference will take a look at a number of different things happening within the industry, from fire management to marketing, to investment models, to social research, and everything in between.” The AFG biennial conference is Australia’s premier national conference for the private forestry industry, and up to 300 delegates are expected to attend.

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Timber & Forestry e-news is the most authoritative and quickest deliverer of news and special features to the forest and forest products industries in Australia, New Zealand and the Asia-Pacific region. Weekly distribution is over 6,400 copies, delivered every Monday. Advertising rates are the most competitive of any industry magazine in the region. Timber&Forestry e-news hits your target market – every week, every Monday! HEAD OFFICE Custom Publishing Group Unit 2- 3986 Pacific Highway Loganholme 4129 Qld, Australia PUBLISHER Dennis Macready admin@industryenews.com.au CONSULTING EDITOR Jim Bowden Tel: +61 7 3256 1779 Mob: 0401 312 087 cancon@bigpond.net.au ADVERTISING Tel: +61 7 3256 1779 cancon@bigpond.net.au PRODUCTION MANAGER Leigh Macready Tel: +61 7 3841 8075 production@industryenews.com.au

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issue 144 | 27.09.10 | Page 9


INDUSTRY NEWS

Key positives in Great Southern bid .. but will spurned investors give it a go? From Page 1

products for sale to retail investors. The company raised $1.8 billion over five years and had 12,000 shareholders and 43,000 investors in its products before the schemes tumbled into voluntary administration last year owing more than $250 million. Mr Jack believes there is still hope for investors in the two schemes, even though Gunns Ltd decided against salvaging them when it took over nine of the 11 failed schemes. The question is: will spurned investors have another go? The offer will have to attract at least half of the affected investors who would then be required to tip in more money, with an unspecified amount for court action in an attempt to reinstate their rights to the plantations. Chief executive of the Australian Plantation Products and Paper Industry Council Richard Stanton agreed there were key positives in the bid to take some of the Great Southern plantations. “Although people criticise these schemes and although some companies have failed, they have created substantial assets which are still out there

Plantationss .. a substantial asset but there are concerns over fewer plantings.

growing, being harvested and producing income – and producing products that people want to buy,” he said. “It would be fantastic if the plantations were able to pay a return to the original investors.” Mr Stanton said managed investment schemes were not as bad as a lot of people were trying to make out – that none of trees ever got planted or that they died. “Quite clearly, there is a substantial asset out there. The challenge is to get it harvested

Richard Stanton .. companies too highly leveraged.

and, hopefully, replanted. “This doesn’t mean planting every hectare in exactly the same place; obviously there will be some areas, for whatever reason, that won’t be planted. But you would hope that the overall wood flow would be maintained.” Mr Stanton said there were many good and bad examples in business, referring to troubled Alinta Energy, which owns 12 power plants and supplies energy to 600,000 customers in Western Australia. [Alinta last week accepted a rescue package that will allow its senior lenders to take ownership of its assets under a recapitalisation plan to address the group’s $2.8 billion debt pile.] “(Similar to MIS) basically a lot of these companies went under because they were too highly leveraged. When the financial situation tightened they got stuck and the banks played a part in this.” Willmott Forests, one of the few remaining MIS operations and long considered a good role model, collapsed this month. [Managed investment schemes Cont Page 12

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Page 10 | issue 144 | 27.09.10

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industry news

Timber frame choice over steel for six-story building in British Columbia.

Mid-rise buildings flourishing in BC’s ‘wood first’ thrust NEARLY 70 mid-rise woodframe buildings are either under construction or consideration across British Columbia, Canada, demonstrating the growing support for the province’s Wood First Initiative. Thanks to Wood First and changes to the BC building code, there are currently 44 midrise projects, or 68 individual buildings, in the works, helping to spur local economies and demonstrate the provinces wood technology expertise to the world. One example is the Library Square development in Kamloops. Framing of the six-storey, commercial-use, wood-frame building has just been completed. Originally the project included a steel frame but was redesigned to realise cost savings following changes to the BC building code in 2009 that allow for six-storey, woodframe construction. “We cannot emphasise enough the savings we achieved thanks to the province’s building code change,” project manger Tom McNeil said. “The code change was paramount in making this project viable and a reality. Given the benefits, we are now in the design stage with several other six-storey, wood-

framed buildings throughout the province.” The Wood First Act became law in October last year and requires that wood be considered as the primary building material in all provincially funded building projects. Since then, 12 local governments have passed Wood First resolutions in support of the Act and three cities – Quesnel, Terrace and Enderby – now have Wood First bylaws. To assist local governments in incorporating more wood into their building projects, the British Columbia is launching a web-based tool called the ‘Appropriate Use of Wood Matrix’, which will summarise best practices for using wood building systems and materials, and provide access to case studies and other design resources. “The matrix will operationalise the Wood First Act, and that’s a very exciting new development for our province,” says Mary Tracey, executive director of WoodWorks, BC. “The matrix will help users understand how and where wood can go in their projects, making it easier to maximise the use of wood, which is the intent of the Wood First Act.”

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Green, sustainable architecture needs the security of PAA certified and trusted engineered wood

It’s about wood products from forests managed in accordance with sustained yield principles and certification requirements What I love about plywood is that it uses timber resources incredibly efficiently and effectively in a composite way. It’s totally renewable and gives great strength and stability and has many great design attributes

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You can rely on EWPAA certified products – other certifications are just not the same They meet Australian standards that are tested, certified and GUARANTEED

Engineered Wood Products Association of Australasia Plywood House, 3 Dunlop Street, Newstead 4006, Queensland, Australia Tel: 61 7 3250 3700. Fax: 61 7 3252 4769 Email: inbox@ewp.asn.auWeb: www.ewp.asn.au

issue 144 | 27.09.10 | Page 11


industry news

New Forests investment fund puts $500m stake in diversified portfolio From Page 10

were popular with small investors because they enjoyed generous tax breaks, but a change to tax rules in February 2007 stopped investors in non-forestry schemes (such as almonds, olives and vineripened tomatoes) from claiming up-front tax deductions]. Asked about the role plantations can play in Australia’s growing wood shortage problem, Mr Stanton said the areas under plantations were not meeting industry targets, and in fact were declining. He said the next national plantation inventory in 2011 would give a clearer picture on this. “There is wood out there we can import, but whether that is a desirable option is a matter for debate.” ‘A long history of high quality forest management, well established infrastructure and skilled labour make for an attractive investment environment in Australia and New Zealand’ – David Shelton Mr Stanton took the opportunity to praise the program presented at the recent forest industry development conference in Melbourne. “Industry leaders at the front of the conference were frank and honest. “The debate on certification didn’t develop as many of us might have expected. However, I don’t think there is a lot to be gained by industry by encouraging a ‘punch-up’ between AFS and FSC. All it does is create more confusion in the market place.” Meanwhile, back on the MIS front, investment manager New Forests Pty Ltd has announced the close of the Australia

Page 12 | issue 144 | 27.09.10

Challenge is to get MIS plantations harvested, and, hopefully, replanted.

New Zealand Forest Fund (ANZFF), an approximately $500 million fund that will invest in a diversified portfolio of timberland properties and forestry-related investments in both countries. The fund’s investors include international and regional institutional investors who have identified Australian and New Zealand timberland as an attractive component of their alternative asset portfolio allocation. “Now is the right time for investors to be weighting toward the timberland asset class because of its low volatility and positive correlation to inflation,” managing director of New Forests David Brand said in a company statement. “Australia and New Zealand’s timberland sectors are restructuring as a result of the failure of several forestry MIS businesses in Australia and the flow-on effects of the global financial crisis. This has created a once-in-a-generation change of ownership of the forestry and land asset base – which may be worth $3-4 billion – but the strong underlying market fundamentals of the sector remain, driven by growth in Asia.”

David Brand .. strong markets driven by growth in Asia.

ANZFF will provide exposure to both domestic and export market opportunities in the region, including structural timber markets, pulp and paper and high value feature grade timbers. Investment returns may come from a variety of sources including timber, land leasing, capital appreciation, bio-energy products, limited processing

facilities and environmental credit production, such as carbon credits. All assets will be managed on an environmentally and socially sustainable basis to deliver or enhance returns and/or to reduce risk. Global timberland investment has grown significantly over the past 20 years with current estimates of institutional investment up to $US50 billion. It has been a particularly attractive asset class for institutional investors and investors willing to accept lower liquidity in return for a premium equity return and portfolio diversification benefits. While the majority of timberland investments are currently in US assets, ANZFF supports the growing trend toward international diversification and provides access to new growth opportunities borne from the current market conditions in Australia and New Zealand, and the proximity to expanding demand in Asia. “A long history of high quality forest management, well established infrastructure and skilled labour make for an attractive investment environment in Australia and New Zealand,” says David Shelton, director of investment programs. “International investors are also attracted to Australia due to the robust economy and beneficial tax laws, which reduce tax rates for international investors compared to many other investment destinations.”

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INDUSTRY NEWS

Major life cycle assessment study under way for American hardwoods THE American Hardwood Export Council has commissioned what will probably be the largest life cycle assessment study ever undertaken in the international hardwood sector. Leading LCA consultant PE International will undertake the study which will conform to the ISO 14000 series of standards relating to LCA and environmental product declarations (EPDs). It will also include an assessment of the carbon footprint of American hardwoods as a discrete component. For Roderick Wiles, director of AHEC for India, the Middle East and Oceania, the decision to invest in this new study is hugely significant for the industry and vital for its future competitive edge in export markets, in a world where green specification is increasingly informed by a science-based approach. He says: “This is a massive undertaking in both financial and logistical terms because the study will encompass a wide range of operations and processes. Data collection will be needed from a variety of sectors, supply chain elements and geographical regions. What we want from this study is comprehensive and independently assessed and verified information about the environmental impacts of the processes used to extract, produce and dispose of American hardwood products.” The study will compile life cycle inventory data for sawn lumber and veneers of the main internationally traded American hardwood species. The information will cover environmental impacts of all processes from point of extraction through to delivery to the importers yard in Europe and in east Asia. A key aim of the study is to enable manufacturers of

in Washington DC in midSeptember and the project will continue through 2011 The American Hardwood Export Council is the leading international trade association for the US hardwood industry, representing the committed exporters among US hardwood companies and all the major US hardwood production trade associations information on the range of species, products and sources of supply.

EU legislation threatens Thai wood exports

American hardwoods .. meeting international standards.

Roderick Wiles .. competitive edge in export markets.

joinery, flooring and furniture products that rely on American hardwoods to prepare formal EPDs in line with international standards. EPDs are widely recognised as the most effective method of communicating the full environmental profile of any given product or material. Green

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building initiatives like BREEAM (UK and international), LEED (US and international), DGNB (Germany), HQE (France), and CASBEE (Japan) are becoming more dependent on EPDs to provide credible and comparative information on the environmental performance of materials used in the building sector. “This new study will not only supply the data needed for our customers to make an informed choice but it will also be crucial in identifying environmental “hotspots” those processes with significant environmental impacts - where we can implement targetled programmes to improve performance, Roderick Wiles said. The initial consultation and planning with PE International and leaders of the American hardwood industry took place

THAILAND is at high risk of losing export orders worth $US310 million from the EU for wood and wood products, as the country has not yet formulated plans to comply with pending a new EU regulation against illegal logging. Shipments to China, Thailand’s top export market for wood, could also diminish since it is a major exporter of the products to the EU, says a report in the Istock Analyst. “We are vulnerable to declining exports to the EU and China when the new [logging] regulation takes effect,” the secretary-general of the Thai Furniture Industries Association Jirawat Tangkijngamwong said. The EU and China together with the US and Japan are among the top five destinations for Thai wood and wood products, amounting to 1 million cub m a day. An estimated 14 million to 15 million cub m of timber is consumed annually in Thailand, while only four million are grown locally and the rest imported, mainly from the neighbouring countries of Malaysia, Laos and Burma.

issue 144 | 27.09.10 | Page 13


resources

AFS gives status to native forest harvesting operations in W Aust THE Forest Products Commission and local furniture manufactuers are delighted with way consumers have accepted the much-acclaimed Australian Forestry Standard (AFS) certification of locallymade wood products. Acting general manager David Hartley said certification was conferred on FPC’s native forest harvesting operations in March last year after many years of assessment by an independent third-party. “The certification assures consumers that wood products sourced from Western Australian forests have originated in an internationally accredited, sustainably managed forest,” he said. Mr Hartley said that in order to acquire the certification, FPC had to follow stringent guidelines in relation harvesting and regenerating native forests

WA hardwoods .. dinning on a renewable resource.

and ensuring its operations protected the environmental, social, cultural and economic values of state forests. “Achieving AFS certification was a rigorous process, but it is certainly worth it as an important marketing tool for WA-made timber products,” Mr Hartley said.

“For example, wood dining settings purchased in the past 18 months are not simply an exquisite piece of valued household furniture, they originate from a renewable resource which is a helping hand for the environment. Mr Hartley said FPC had listened to log buyers, who

in turn had heeded their customers’ advice. “They want only wood products which come from a sustainable source and that is why AFS has meant so much to them over the past 18 months,” he said. Auswest Timbers, Pemberton, recently achieved chain of custody certification for its wood products on the basis of FPC having achieved AFS certification. The company’s group operations manager Rob Hossen said independent recognition of the sustainability of harvesting carried out by FPC was an important step forward for the timber industry. “Compliance with the AFS, verified recently by independent auditors, will help the WA timber industry to compete in domestic and international markets,” Mr Hossen added.

OPEN LETTER TO THE TASMANIAN COMMUNITY

IFA calls for an independent scientific assessment on proposed new reserves

Science needed on forest reserves.

Page 14 | issue 144 | 27.09.10

THE Institute of Foresters of Australia (IFA) is an institution whose members are dedicated to improving the natural resources we manage. Many of our members work in natural resource management, forestry, public park organisations and for private land owners. The IFA has been an advocate for improved management of natural resources for 75 years. Our members consider themselves passionate advocates for sustainable environment resource management. Media reports on recent industry/environmental nongovernment organisation discussions in Tasmania indicate

moves towards the creation of additional and substantial new forest reserves. Media reports also indicate that such an agreement could have devastating impacts on many smaller and regional communities and the people who rely on forestry for their employment. The IFA considers that no agreement can be made until there is: * An independent and credible scientific assessment of the values within these proposed new reserves. * An assessment of the social impacts arising from such an agreement.

* An assessment of the economic impacts from such an agreement. * An assessment of the environmental impacts, including product and import replacement. IFA says the broader Tasmanian community must have an opportunity to participate. The IFA calls on all Tasmanian elected political members to reject any agreement until the above criteria have been met. Only when these criteria have been met will a lasting agreement be possible. – Tasmanian division of the Institute of Foresters of Australia

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AT NAFI LIAISON DINNER

If you are a woman in the timber industry who is a decision maker, mentor, business owner or passionate about developing a national women in timber network we encourage you to book now to attend the upcoming:

Women’s Leadership in the Timber Industry Seminar 10th November 2010 10.30am to 3.00pm

Enjoying the NAFI liaison dinner during the forest industry development conference in Melbourne are Kellie Northwood and Graham Morgan, chief executive, GEON Group Australia.

The Alto Room ‐ The Langham One Southgate Avenue, Southbank, Melbourne $132.00 per person (GST Inclusive) The forum is a way of providing a different perspective to issues facing the whole timber industry. It is a way of providing development and ensuring that good women not only are attracted to our industry but choose our industry as a preferred place to work and build a career. Speakers on the day will include: Karen Hayes , industry visionary Judy Tilling, and Lisa Marty from VAFI who has been appointed to the Department of Primary Industries Women’s network representing women in the timber industry.

Guest Speaker: Karen Hayes

Karen Hayes’ vast general management and strategic consulting experience in Australasia, Canada, the United States and many European countries, primarily in the financial services and information technology industries, has lifted her into the top echelons of Australian business women.

Kay Phillips, Inwood Magazine, and Tish Campbell, WA regional coordinator, Timber Communities Australia, Perth, share drinks at Melbourne’s Regent Theatre during the industry liaison dinner.

Karen is the Director Corporate Engagement and Human Capital with UXC Limited. UXC is an ASX300 company which provides a market‐leading portfolio of Information, Communication and Technology (ICT) products and services for medium and large entities in the private and public sectors across Australia and New Zealand. She is a past finalist in the Telstra Business Woman of the Year Awards, has been on the Board for the Breast Cancer Network Australia since its inception in 1998 and was appointed to the Board of the Melbourne Football Club in 2006.

Name:

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Address:

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Contact Number Office:_______________________ Mobile Phone: ___________________________ Dietary Requirements: _______________________________________________________________

Douglas Head, managing director, Australian Solar Timbers, Kempsey, NSW, and AST’s processing manager Allan Hutley, at the NAFI dinner.

Number of Tickets:

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US housing slump hits NZ exports US imports of New Zealand lumber declined in July as sales of new homes in the US plummeted by 32% to record low levels. New Zealand moulding and appearance lumber imports declined 30% from June 2010 and were down 22% on July last year. Lumber exports to Asian markets remains strong and exports to Southeast Asia from New Zealand in July were 20% higher than June. Of July lumber

exports, 67% headed to Asia, down from 72% in July 2009. The biggest fall was in exports to South Asia which were down over 800%, which is likely to be due to this year’s severe monsoon season restricting demand. The trend in Australian dwelling approvals decreased 2.5% in July, following a 2.8% fall in June. However, the seasonally adjusted figure showed dwelling units approved rose 2.3% in July from June 2010.

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PAYMENT DETAILS – Registration and Payment by Friday the 29th of October 2010 $132.00 PER HEAD (Costs are GST inclusive and covers Morning Tea, all day Tea & Coffee, Lunch with juice and soft drinks) Payment to Timber Merchants Association (either by Cheque or EFT) Cheques should be sent to: TMA, PO Box 93, Blackburn Vic 3130 EFT Payments should be paid into: BSB 083‐166

Account Number: 49250 5442

Please debit my Visa / Mastercard for the amount of $___________________________________ Cardholder Name:

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___________________ Please note American Express will not be accepted

PLEASE FAX REGISTRATION FORM TO (03) 9877 6663 (Tickets and a tax invoice will be issued on payment)

issue 144 | 27.09.10 | Page 15


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Issue 144  

A weekly online magazine to the timber and forestry industry

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