Issue 199

Advertising: Tel +61 7 3266 1429 Email: [email protected] 1issuE 199 | 14.11.11 | PAgE

By JIM BOWDEN

A SUDDEN squeeze on credit has forced China “almost overnight” to slash the price it is prepared to pay for imports of New Zealand A grade logs by up to $US70 a cubic metre.“China’s wood market bubble has burst, which again demonstrates the vagaries and fragility of commodity markets,” say NZ wood traders observing the abrupt price downturn.“Forest growers in New Zealand have enjoyed a steady climb in log prices in China for a couple of years, peaking in April, largely resulting from China’s diminishing access to wood from Russia,” says

Peter Harington, a director of forest manager and stumpage business Wood Metrics, based

in Rotorua.“NZ processors, many starved for wood and unable to compete against high export prices, will now be in a competitive position to secure log supplies.”Russia has severely cut its log supply to China; production costs continue to climb as wood is harvested from increasingly more difficult country, as the easy country gets depleted. Also, the Russian government has imposed tariffs on its whole log exports to encourage more wood processing within its own boundaries.Mr Harington said the China log

ThIs IssuE

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issue 199 | 14.11.11 | Page 1

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Cont Page 3

• Forest land buy-back sweet deal for sugar producers• Critical water issues at Albury forestry forum• Awards for innovation, service feature at VAFI dinner• Multi-res buildings have ‘storey’ to tell at Frame Australia

• Carbon tax on industry ‘grossly unfair’• Ta Ann rejects environmental ‘spin’

New Zealand and the China syndrome

Year of the Dragon .. lucky year for New Zealand log buyers?

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Advertising: Tel +61 7 3266 1429 Email: [email protected] PAgE | issuE 199 | 14.11.11 2

THE wood manufacturing industry will be a big loser from the controversial carbon tax legislation finally passed by the federal government last week.Australia’s 500 biggest polluters will pay $23 a tonne of carbon that they generate. By 2015, the tax on carbon will be flexibly priced under a new market-based emissions trading scheme.“This is very much a setback for us,” the general manager of the Engineered Wood Products Association of Australasia Simon Dorries said.“Our biggest concern is that engineered wood, for example LVL and plywood, will not qualify for any assistance although they are energy intensive.“Our biggest competitors, steel and aluminium, will get very substantial assistance. This creates an uneven playing field which put more environmentally friendly building materials at a disadvantage. This is grossly unfair.”Mr Dorries said the industry’s production costs would go up at least 3% making relocation of manufacturing to China much more attractive.China has no such tax and as the largest carbon dioxide emitter, output is predicted to rise 70% by 2020.The country builds a new coal-fired power station every week and in one year turns out more coal-powered electricity than Australia’s total output.The Australian Forest Products Association says the government’s Clean Energy Future could hurt domestic forest product processors and will do little to encourage participation by commercial

forest growers producing both wood and carbon positive outcomes. “Despite the industry being in the business of creating low emissions intensive materials and sustainably managing forests, the government has ignored the industry’s feedback in developing its climate policies,” AFPA chief executive Dr David Pollard said.“First, many AFPA members operate in a global marketplace and will face steep competition from producers in countries

industry news

Engineered timber,forests left out of

clean energy future

Cont Page 6

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Simon Dorries .. carbon tax a win for competitors.

Carbon tax ‘grossly unfair’

David Pollard .. forest industry has little to smile about.






www.vafi.org.au



market had overheated because of speculative behaviour by some traders and new entrants into the market.“As demand and prices for logs in China increased, US and Canada entered the market increasing their export shipments from almost nothing to more than one million tonnes a month.“This followed the collapse of the US building industry, stemming the flow of logs to timber traders and sawmills.”Mr Harington said Chinese ports were now holding at least 2½ months’ supply of logs and were negotiating from a position of strength on prices.He said the Chinese government had restrained credit. Traders who previously bought logs off the wharf were finding it difficult to obtain letters of credit.“The downturn in the China market means many small private lots in New Zealand won’t proceed with harvesting this summer. The bigger corporate forest owners have already reduced their output which is causing some pain for logging contractors and transporters,” Mr Harington said.“The positive side of this is that local processors who were battling to compete with export log prices will appreciate the opportunity to buy on a less competitive market.”Log prices in New Zealand in the past few years have remained at historically high levels of about $US145 cub m for A grade logs delivered to China. K (Korean) grade logs rose to about $95 a tonne.A grade logs on the China market have now dipped to around $75 cub m or less.Mr Harington said he believed

the log market in China for NZ logs would remain robust even though prices had levelled off.“It just means NZ processors will be back in the market in a bigger way.”Log exports from New Zealand this year were at record levels and may reach as high as 13 million cub m, more than a doubling from just three years ago.

The steady increase in log exports the past five years is likely to continue over the next 15 years as the theoretical harvest level in New Zealand is set to double to 55 million cub m by 2024.Forest owners have been enjoying their best returns for years as a result of snaring a greater share of the huge Chinese market, but at the expense of some sawmills that were running drastically short of logs.In 2009, log sales to China were

worth about $530 million, more than double the $236 million in the previous year, and volumes were also more than double levels in 2008.Some New Zealand sawmills had to shut down for brief periods because of the log shortage and the industry warned timber prices were likely to rise at least 10%. Half the potential industry just shifted offshore, with NZ mills left to scrap over the domestic market.The sudden collapse of informal

lending networks reveals the fragility of China’s unregulated financing system when credit tightens and creditors lose confidence. Money supply has shrunk as the government tightens lending to try and rein in inflation running near a three-year high. Financial experts estimate outstanding private loans represent 8% of total lending in China.Most of the informal lending has been pumped into real

Peter Harington .. Chinese log traders finding it difficult to obtain letters of credit.

slowdown in New Zealand logharvest expected this summer

industry news

Cont Page 4

From Page 1

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The positive side of this is that local processors who were battling to compete with export log prices will

appreciate the opportunity to buy on a less

competitive market



estate developers riding China’s property boom that is showing signs of slowing, driving up home prices. Hong Kong’s home sales fell for a 10th straight month, dropping by half in October from a year ago as buyers put off purchases.

The risks to China’s wider economy include a credit freeze triggered by increased mistrust

among informal lenders, also referred to as curb lenders, that could trigger more widespread bankruptcies.A downturn in global shipping,

even worse than during the 2008 financial crisis, is also worrying China with the outlook for the industry made increasingly uncertain by the European debt crisis.

The shipping industry, a bellwether of economic activity because of its role in world trade, saw freight rates plummet from mid-2008 to the end of that year.

Meanwhile, timber trading activity in New Zealand and Australia is already showing signs of a slowdown as the Christmas-New Year holiday season approaches.

In China, the log trade will definitely be at a standstill during the lunar New Year which will be celebrated on January 23 in 2012, the year of the dragon, the most auspicious animal in the Chinese zodiac.

industry news

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Outlook for China industry madeuncertain by European debt crisis

From Page 3

The sudden collapse of informal lending networks

reveals the fragility of China’s unregulated

financing system when credit tightens and creditors lose

confidence

At least 2½ months of log supply is piling up on wharves in China.

John gay bounces backGUNNS Ltd has sold a sizeable chunk of its wood production operations to its former chairman John Gay.The controversial forest industry player will purchase two of the Gunns sawmills in northern Tasmania – Somerset and Deloraine.Mr Gay started his career at the Deloraine mill, which was set up by his father Eugene Gay. Industry sources have also reported that Mr Gay and Ken Last are part of a consortium which is buying Gunns’ former timber finishing plant at Remount Road in Launceston.The acquisitions herald the return of the colourful and combative character to an industry that is restructuring in

the wake of falling woodchip exports and the exit of Gunns from native forests.

Mr Gay resigned from Gunns in May last year following a sustained sell-off of Gunns shares by institutional shareholders demanding the company move away from its controversial logging of old-growth forests and embrace a “social licence”.

Since Mr Gay’s departure, managing director Greg L’Estrange has radically reshaped Gunns, selling wine, timber retail and native forest milling assets, as well as land, in an attempt to secure funds and backers for its proposed $2.3 billion pulp mill.


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THIS Monday is the last chance to book the limited remaining tickets to the 2011 FSC Australia excellence awards and dinner at the Langham Hotel in Melbourne on November 16.

The dinner celebrates the 5th anniversary of the incorporation of Responsible

Forest Management Australia (FSC Australia) and its achievements.The event is a great opportunity for Australia’s increasingly environmentally aware business and consumer communities to come together to engage and discuss future FSC developments. Eight keenly contested awards are up for grabs and a series of significant announcements will

be made on the night.

This year guests will be taking home a surprise – but how big will that surprise be? Come and see the FSC products and services available and start your tax deductible Christmas shopping early on a silent auction items.

Contact FSC Australia on (03) 9329 9984 or email [email protected]

noVeMber 16: FSC Australian annual awards dinner. Langham Hotel, Melbourne. Celebrating the 5th anniversary of the incorporation of Responsible Forest Management Australia (FSC Australia) and its exciting achievements. Contact FSC Australia on (03) 9329 9984 or email [email protected]

24-25: bioenergy Australia 2011 conference and exhibition, Novotel Twin Waters Resort, Sunshine Coast, Queensland. Web: www.bioenergyaustralia.org

25: TABMA Queensland annual general meeting.

DeCeMber1-2: ForestTeCH 2011: Tools& Technologies. Improving forest planning and operations. Albury, NSW. www.foresttechevents.com

events

WHAT’S ON?MArCH 2012engineered Wood Products Association of Australasia. Conference, dinner, award presentations. (Date to be advised)

13-14: Future Forestry Finance: Investment, Growth and Strategic outlook. Sydney. www.forestryfinanceevents.com

21: ForestWood 2012. Museum of New Zealand Te Papa Tongarewa in Wellington. A pan-industry conference jointly hosted by the Forest Owners Association, Wood Processors Association, Pine Manufacturers Association, Forest Industry Contractors Association. Supported by Woodco, NZ Farm Forestry Association and Frame & Truss Manufacturers Association.This is the second time that the four organisations have held a joint conference which builds on the successes of previous individual and combined industry

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).

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- Forest growing; - Harvest and haulage; - Sawmilling and other

wood processing; - Pulp and paper processing; and

- Forest product exporting.

For more information on the Australian Forest Products Association (AFPA) or to enquire about membership , please call (02) 6285 3833.

events/conferences which have attracted world class speakers and presenters. Fantastic opportunity for organisations and individuals, with a keen interest in forestry, to engage with decision makers and professional specialists from the forestry industry. Visit www.forestwood.org.nz

29-31: AUSTimber, Mount Gambier, SA. www.austimber2012.com.au

DeCeMber5-6: ForestTeCH 2011: Tools& Technologies. Improving forest planning and operations. Rotorua, NZ. www.foresttechevents.com

jUly 201211-14: AWISA 2012. Sydney Convention and Exhibition Centre. Contact: Contact Exhibitions Pty Ltd, PO Box 925, Avalon NSW 2107. Tel: 612 9918 3661 Email: [email protected] Web: www.awisa.com

Last chance to be part of FsC awards, dinner night

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with no carbon tax. The rate of assistance for these trade-exposed manufacturers in the form of permit allocations will decay over time at an arbitrary rate of 1.3% a year. “AFPA urged the government to link this assistance to the actions of competitor countries as they set carbon policies but this has been largely ignored.“Manufacturers of solid and reconstituted wood products will receive no assistance at all, and will suffer a serious erosion of competitiveness from day one.“Secondly, it will be very difficult for any commercial plantation forestry operation to be recognised in the Carbon Farming Initiative (CFI) because the constraints placed on for-harvest plantation projects are far stricter than on any other activity. This is despite Australia’s tree plantations already contributing 20 million tonnes of CO2 equivalent towards Australia’s Kyoto target.

“Instead of recognising these home-grown carbon stores, Australia will import around 100 million tonnes of carbon credits from overseas by 2020 to meet our emissions reduction target.“Thirdly, the use of native forest wood waste to produce renewable energy will be banned with amendments to the Renewable Energy Target (RET) Scheme. This is extremely disappointing considering a number of projects in regional Australia are now in jeopardy

and waste products from sustainably managed forest operations and processing are unable to be utilised.“The only bright spark under the package is the provision of greater certainty and market access for ‘not-for-harvest’ reforestation carbon offset projects, which are likely to become a more important component of a diversified forestry industry into the future.“On the whole, however, despite what most Australians would expect, the carbon positive forest industry has little to smile about with the passing of the carbon tax legislation.”Meanwhile, the New Zealand government says it intends to slow the phasing in of the ETS from 2013 to 2015, after which (if still in power) they’d look to align the country’s ETS to that adopted by Australia.“Labor’s betrayal of the Australian people is now complete,” the Leader of the Nationals Warren Truss declared.“At the behest of the extreme Greens, Australia is going it alone to hang the millstone of the world’s biggest carbon tax around the necks of every

industry news

Cont Page 9

Warren Truss .. Coalition will repeal ‘destructive tax’.

Tax fails to recognisehome-grown carbonstores: David Pollard

From Page 2

The use of native forest wood waste to produce

renewable energy will be banned with amendments to

the renewable energy Target scheme


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MORE than 200 representatives of the forest and wood products industry, government, academia and the media gathered in the Crown River Room in Southbank on November 4 for the Victorian Association of Forest Industries annual dinner.Dinner highlights were the launch by the state Minister for Agriculture Peter Walsh of the VAFI Sustainability Report and awards for industry achievement.VAFI has been releasing Sustainability Reports since 2003, which reflect the association’s commitment to continually improving the social, economic and environmental performance of the forest and wood products industry.The Reid Bros sawmill at Yarra Junction received the Innovation Award, sponsored by Forest and Wood Products Australia, which recognised the investment made in a power generator heat engine that will reduce reliance on energy from fossil fuels and create energy from waste products.The technology uses heat from steam generated by a boiler fuelled by timber residues from mill operations and waste obtained free of charge from nearby furniture manufacturers to create electricity. This reduces the amount of wood waste entering landfills.Thee generators also have zero emissions; the use of sawmill waste for power generation is carbon neutral and the use of grid power to operate the mill is reduced.The system should provide all or most of the weekend power needs and part of the week day power requirements.Reid Bros, established in 1922, is among the oldest sawmills in the region milling 17,500 cub m of Victorian ash a year.The steam boiler that runs off

wood waste, otherwise sent to landfill, supplies steam to the two (60 cub m) kilns. The goal of the project was to use the spare capacity of an existing wood waste boiler that was

events

Cont Page 8

Awards for innovation, servicefeature at VAFi industry dinner

Innovation .. owner operator of Reid Bros sawmill Rowan Reid (centre) receives his award from the Minister for Agriculture Peter Walsh while VAFI chief executive Lisa Marty adds her congratulations.


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producing more steam than required for timber drying kilns and convert it into electricity.The steam was simply connected to the ORC heat engine’s evaporator via a manifold. The existing boiler capacity is 1000 kW and the spare capacity would support a 70 kW ORC heat engine.To integrate the system the ORC heat engine was connected directly to the steam feed system, which then directly uses the saturated steam from the boiler and returns the condensate back to the return loop of the boiler. The cold side of the ORC heat engine was supplied by way of a new purpose-built cooling tower, located near the ORC heat

Cont Page 9

events

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Lifetime achievement award recognises nearly half century of service to industry

Lifetime service award .. Boris Iskra is congratulated by his wife Angela.

Greg McNulty of Ryan & McNulty sawmillers with two major awards received at the VAFI dinner.

Australian Paper chief executive Jim Henneberry (left) receives awards for local community engagement and occupational health and safety from Peter Walsh MP. The largest private employer in the Latrobe Valley, AP won the community award for its education programs on safety in schools and the inclusion of local families in the mill’s company newsletter.The company was awarded the health and safety award for its dedication to improving safety for the nearly 1000 people employed at its Maryvale paper mill.The awards were sponsored respectively by Regional Development Victoria and Timber Training Creswick.



business and every family,” he said.“No other country on Earth is following us – in fact, they are scoffing at our act of economic self-flagellation.“Bob Brown’s plan to bog down growth and development in this country is now enshrined. His agenda to reduce Australia’s carbon dioxide emissions by closing down Australian industry and destroying jobs is

now law.“But, the Australian people willing, the Coalition will not allow the carbon tax to dog future generations. We have given ironclad notice that should the Coalition form the next government we will repeal this destructive tax.“Despite the Greens having just one seat in the House of Representatives, this Labor government – including the entire caucus – is subservient to the whims of Bob Brown.”

engine.The result is a continuous generation of 70 kW of renewable energy and an annual reduction of 675T of CO2 emission. Running 330 days 24 hours a day, this generates about $50,000 of power a year.During the VAFI dinner, the presentation of the VAFI Lifetime Service Award to timber engineer Boris Iskra recognised his 24 years’ service to the forest and wood products industry.Mr Iskra’s work with both TPC Solutions and Forest and Wood Products Australia facilitated a Victorian sawmiller research and development program and spearheaded a major in-grade testing study of Victorian hardwood timbers which demonstrated improved structural properties of Victorian ash species.His efforts with natural feature appearance products saw these new grades included in the Australian timber grading standard, effectively recognising a new multi-million dollar appearance grade market

opportunity.Mr Iskra championed the ratification of draft Australian Standard AS3959 following the 2009 Victorian bushfires, which provided standards for timber building planning.Benalla- based Ryan & McNulty Sawmillers received two awards – for skills and training and environmental sustainability.The first award recognised an ongoing commitment to investing in the skills development of all employees; more than two-thirds of the sawmill’s workforce received some form of training in 2010-11.The second award was received for making a significant commitment to reduce timber, bi-product and general waste by utilising local markets for residual products. This has reduced the amount of bi-product going to landfills from 20 cub m a week to zero.Lisa Marty said VAFI appreciated the support of ForestWorks, which sponsored the Skills and Training Award and First Super, as sponsor of the Environmental Sustainability Award.

events

Millstone around necksof every business, family

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!

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From Page 6

From Page 8

Championed bushfirestandards for industry






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By JIM BOWDEN

THE Cassowary coast south of Cairns and centred on the towns of Innisfail and Tully, is named after a large flightless bird, shy but with unpredictable mood swings that can turn it into a savage killer.Flightless, unpredictable and savage – all terms that well describe the failed managed investment schemes in the region that lost their final battle for survival when thousands of hectares of hardwood plantations along with millions of dollars in invested funds were blown away by tropical cyclone Yasi in January.

This week some of the first sugar cane lands bought and converted for forest plantations were bought back by sugar growers for less than half the price paid to them by MIS

companies ITC Ltd and Great Southern.ITC had about 7000 ha under management in the broader Mackay-Whitsunday region, an area considered excellent for tree growth and in close proximity to end-markets in Japan and China.Most of the investment eggs were placed in one basket – Eucalyptus pellita, colloquially known as red stringy bark but marketed as red mahogany“This is just such a wonderful tree – wonderful growth and excellent wood quality. But they grow a magnificent leafy canopy, a big sail that when the winds get behind them they’re pushed to the ground,” lamented respected forester Dr Gary Bacon.“This has happened twice in 10 years and it’s a crying shame.”Extreme size increases are a feature of Eucalyptus pellita, which is known to achieve growth well in excess of 2 m a year.The MIS troubles started when the tax office issued a ruling in 2007, denying non-

forestry schemes up-front tax deductions for their outlays. While that ruling was eventually over-turned by the federal court uncertainty had set in. Coupled with the global financial crisis, the drought and falling prices for some products, the MIS business was hit by a perfect storm.April this year marked the first anniversary of the collapse of the big tax-driven scheme Timbercorp. Its even bigger rival Great Southern capitulated soon after that.

“Sure, the land’s back on the market and expressions of interest are about to close on many of the blocks. We bought two large blocks of about 900 ha for quite a few million dollars from the tree companies who hadn’t planted a tree on it,” Tully Sugar chairman Dick Camilleri told T&F enews.“But the sugar industry can afford it and we got it for 50% less than what we sold it for. It’s going back to sugar cane and not one tree will be planted on it.”Mr Camilleri said he watched as the money, work effort, trees – some of them 15 metres high – and a dream evaporated.“It was a shame to see those trees end up as straggly things broken and smashed after the cyclone. Then came the added expense of bulldozing the fallen stems.”The proliferation of timber plantations along the Cassowary Coast has long been a controversial topic. Their development was seen by some as inappropriate and

FOrest wOrKsHOPPLAntAtiOns

Cont Page 16

Dick Camilleri .. the only viable crop that can go back in here is cane.

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RENEWED interest by developers and builders in lightweight timber framing for multi-residential construction is generating demand for timber engineered solutions in two and three-storey apartment buildings.This will be an important topic at the national Frame Australia 2012 conference and exhibition on June 18 and 19 next year at the Park Hyatt Melbourne.This is good news for the timber and pre-fabrication industries as the detached housing market has slowed down nationally. However, the level of multi-dwelling and unit construction is reasonably stable and represents a significant market that is over half the size of detached housing.Conference director Kevin Ezard said a number of major developers and builders had converted to timber frame construction to achieve cost

and time savings; they would be sharing their experiences and expressing their views on some important issues with delegates attending Frame Australia 2012. Mr Ezard added: “A number of builders joining the program sessions will outline their planned future directions and highlight areas where greater collaboration on timber framed construction systems would be of assistance to builders, fabricators, and timber suppliers.”In its 14th year, the Frame Australia event will incorporate a number of new features including an enlarged sponsor display area and workshop discussion forums in three concurrent sessions on both days to allow greater discussion and interaction by delegates during the conference.For more information visit www.frameaustralia.com

events

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http://www.ewp.asn.au



AFTER an extended period of drought over a decade or so, planning is under way to secure the long-term ecological health of the Murray Darling Basin which cuts through five states. The suggested plan entails cutting existing water allocations and increasing environmental flows.In June this year, a federal parliamentary committee delivered its report to the Murray-Darling Basin Authority and its recommendations on water cutbacks in the basin. Based on the heated meetings within the region, it’s certainly controversial and the implications for forestry are substantial.A forum in Albury, NSW, on December 1 and 2 will give foresters first-hand details on how the draft plan could impact on fire protection for the high catchments, whether plantation growers will be expected to pay for their water, the impact

of allocations and flows on downstream processing operations and the science behind some of the planned decisions.ForestTECH 2011 has been designed again to provide that independent platform for Australasian foresters to evaluate a range of new technologies that will improve their forest planning and operation.The commissioner of the NSW Office of Water David

Harriss will be the after-dinner presenter on Thursday evening, December 1.As well as the very latest data collection, mapping and inventory tools, forest management and estate planning have also been added

to this year’s ForestTECH series. Like remote sensing, foresters involved in the design of this year’s technology series have very deliberately opted for a strong practical focus. Forestry companies who have adopted and are using some of the new forest information management and decision support tools that have just been rolled out will be presenting. Australian, New Zealand and North American forestry companies outline how the systems are used for forest modelling, tactical planning, and resource allocation and scheduling purposes.

A section on harvest optimisation has also been included with presentations on results from New Zealand and Australian in-forest trials.

Sonics have been added to tree processing heads during harvesting and have been tested in three NZ and Australian forests. The use of on-board computers in forest harvesting is covered along with some innovative GPS tracking developed to improve worker safety in the forest.

ForestTECH program details can be viewed on www.foresttechevents.com

events

Critical water issues flow throughAlbury forestry forum next month

Murray-Darling .. key to forestry operations.

Murray-Darling plan to impact on fire protection

David Harriss .. update on Murray-Darling draft plan.

Whet your appetite withnew water science bookSTATS tell us that across Australia we are only using 6% of our renewable water resources each year. Actually, our current use meets the needs of more than 60 million people through our agricultural export industry. Lucky country indeed.So, what’s all the fuss about? What are the issues when it comes to our water resources? To name a few, uneven distribution and high year-to-year variability. And of course that growing population ..Read all you’ll need to know about the challenges we face

in water resource management in CSIRO’s new e-book Water: Science and Solutions for Australia.

CSIRO has also published a ‘climate’ book in the Science and Solutions for Australia series which can also be downloaded.

Water: Science and Solutions for Australia is the second in the series of Science and Solutions for Australia. Climate Change: Science and Solutions for Australia was the first and is available free at: www.csiro.au/Climate-Change-Book.

Reaction mixed on forest policyNATIONAL Party promises to adopt some of the recommendations made by the panel that reviewed the Emissions Trading Scheme have been welcomed by forest owners in New Zealand

But they say much more policy work is needed if forestry is to achieve its potential.

Forest Owners Association

chief executive David Rhodes said ‘averaging’, a way to make it easier for owners of small forests to participate in the scheme, would be a positive move. It offers an assured income during the first few years of growth of a new forest and would not require credits to be surrendered at harvest, so long as the forest was replanted.



http://www.csiro.au/



LEADING eucalypt veneer producer Ta Ann Tasmania is celebrating the use of Tasmanian certified veneer in a $33 million London Olympic sports facility.“I am rapt that some of the world’s best athletes can make use of a fantastic Tasmanian product using a renewable resource from forests that are 47% protected, and are made by a great workforce,” Ta Ann Tasmania director David Ridley enthused.Ta Ann constructed two rotary veneer manufacturing facilities in Tasmania in 2007 and 2008 at a cost of $79 million, installed high tech equipment to value-add regrowth billets from logs otherwise used for woodchips, and created 160 new direct jobs.The veneers are provided to international markets.

“It is a great product and I am pleased the structural and environmental credentials of Tasmanian eucalypt veneer have been recognised and plywood has been sold into sites like Olympic facilities,” Mr Ridley said.Ta Ann is a Tasmanian manufacturing company, not a logger, and receives the resource from the state and from PEFC certified sustainable forests.“The environmental credentials of the product are clear – Tasmanian veneer is PEFC and chain-of-custody certified to international standards and these standards are independently audited,” Mr

Ridley said.“Ta Ann veneer is made from pulpwood that would otherwise be made into woodchips – meaning better use of the resource, less waste, and that high quality products are made from low quality timber.“On top of this, the billets come from legal sources and supplied under the Tasmanian and federal governments’ inter-government agreement. This agreement is currently considering new reserves consistent with contacted wood supply and is yet to verify any claims like those being made in the UK by Markets-for-Change about high conservation value forests.”Mr Ridley emphasised the following:• Ta Ann Tasmania is not a logging company.• Supply to Ta Ann Tasmania from public forests is made by Forestry Tasmania and comes from properly managed forests and include codes of practice rules to protect wedge tailed eagles and giant trees and other important flora and fauna values.• Supply is made under the Tasmanian and federal

government inter-government agreement signed on August 6 this year. [The IGA will assess claims].• Ta Ann Tasmania supports proper analysis and verification under the IGA process and therefore is not blocking forest protection.• Tasmanian Wilderness World Heritage areas are not logged. A 2008 UNESCO investigation did not recommend changes to the boundaries to include harvesting areas. Any claims for new WHA areas are examined as part of the IGA process.• Ta Ann Tasmania does not

use and cannot use old growth billets. Regrowth (young growth) billets are used to make Tasmanian veneer.• The machinery installed by Ta Ann Tasmania for peeling veneer was engineered to use small diameter billets up to 70 cm that are solid and not old and rotten, and to use regrowth and not old growth. These billets are provided by Forestry Tasmania from certified sustainable forests that are managed to international standards.• A count of growth rings at the TAT mill confirmed the oldest billet is not hundreds of years old – it is regrowth less than 60 years of age.• Customers are not being misled about eco-wood – Tasmanian veneer from Ta Ann is PEFC and chain-of-custody certified and sourced from forests in Tasmania where 47% is already protected. Tasmania is one of the most protected places on the planet.• FSC and PEFC are both globally recognised certification schemes. In 2010, PEFC had 242 million ha certified and FSC had 135 million ha. The UK Central Point of Expertise on Timber Procurement recognises both PEFC and FSC.• Ta Ann Tasmania is working with signatories involved in the IGA process, including ENGOs, for dual outcomes of environmental protection and wood supply under the IGA process.• Forests are regrown after harvesting.Mr Ridley added: “Claims like those by Markets-for-Change are part of an anti-logging view with a particular spin and ignore the process currently under way in Tasmania. Markets-for-Change has no standing in the

David Ridley .. anti-logging views ignore the process now under way in Tasmania.

Artist’s impression of the state-of-the-art $A33 million sports complex under construction at the University of East London’s Docklands campus in London.

wOOd veneers

Cont Page 16

Olympics building sports Tasmanianveneers, rejects environmental ‘spin’Ta Ann parades its environmental credentials in London

A count of growth rings at the Ta Ann mill confirms the oldest billet is not hundreds of years old – it is regrowth less than 60 years of age



a direct threat to the strategic interests of the region’s agricultural prime mover, sugar.In the aftermath of cyclone Yasi, as primary producers continued to count their losses, the question was asked – do tree plantations have a future in cyclone-prone areas?Dick Camilleri says the destruction during Yasi confirmed his view the managed investment schemes were a “failed, taxpayer subsidised experiment” which should never have been allowed in a known high-risk cyclone zone.“We at Tully Sugar tried to portray that message to the powers that be at the time. We actually spent a fair bit of money on a court case – we lost that but cyclone Yasi won the case because it flattened the trees,” Mr Camilleri said.“I think the only viable crop that can go back in here is cane, especially with the sugar prices at the moment.”Elders Forestry was one of three companies with plantations in the area, with more than 4000 ha of trees grown on 30

properties between Babinda and Ingham.Elders’ Queensland forestry manager at the time Mark Werren said although the extensive planting of red mahogany species [Eucalyptus pellita] had been an exciting proposition, Yasi dealt the worst-possible scenario to the company’s investment schemes.“The trees were quite young, under four years of age, which means they had a rather heavy

sail and a less developed root. They were either blown over or snapped off by the wind,” he said.“Had the cyclone been of a lesser category or occurred further to the north or south, we wouldn’t have had such a result.”Now the plantations industry as a whole is looking at moving inland away from the coastal belt to the Atherton Tablelands and further south towards central Queensland beyond the cyclone belt.“Our view was that we welcomed private investment in plantations but we were concerned with the MIS models that seemed to be driven by financial considerations rather than by the wood products at the end of the day,” the chief executive of Timber Queensland Rod McInnes said.“Unfortunately, there were some decisions about tree species that might have been suitable for cabinet timbers but that were proven not to be. That put pressure on the financial model on which they were grown because of the prices paid for the land. And it fell over.

“The cyclone was the last gasp. If the cyclone hadn’t happened some of those plantations would have succeeded. Even now some of the teak is in good condition and sandalwood plantations up on the Cape are doing well.“But in terms of finding a commodity product to assist in the structural timber shortfall in Queensland, well it didn’t happen.”Mr McInnes said a lot of land bought from sugar interests at high prices was now back on the market at reduced prices.“The reality of it is, the price of the land will determine whether a big institutional investor will have a bash at it for plantations.

“But plantations won’t work on the coast – the land is too dear and climatic risk is too great. On a 30-year rotation on average for plantations you can expect at least three cyclones over that period. “No body could stand them being blown over three times!”Mr McInnes said the longer-term idea was to consider shifting forest plantations to the Atherton Tablelands.“We’ll just have to wait and see what happens.”

Quck grower .. young Eucalyptus pellita growing in coastal Queensland.

PLAntAtiOns

Yasi dealt worst-possible scenarioto plantation investment schemes

Market-for-change bypassing process put in place by PM

IGA process and is not involved in the discussions.“It is working outside the Tasmanian IGA process and has gone to the UK with a particular spin rather than submitting its claims – about forest management, claimed World Heritage areas, and claimed high conservation value forests – to the IGA validation process so it can be subject to scrutiny

and tested.“Markets-for-Change is bypassing the process put in place by the Prime Minister and Premier of Tasmania.”[Markets-for-Change is a market-focused environmental NGO. Its current focus is on retailers selling furniture, flooring, DIY, paper and tissue products “that come from Australia’s threatened native forests and from forest destruction overseas”.

From Page 13

From Page 10

‘The reality of it is, the price of the land will determine whether a big institutional

investor will have a bash at it for plantations’ – rod McInnes

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