Forest Products Industry

After a major fire damaged several pieces of equipment at Evergreen Forest in New Meadows, ID, USNR is building new machines to get the mill running at full capacity again.

The initiative will take place over the course of several phases, some of which have already been completed. Evergreen has already received new edger scanning and optimization systems and a pony carriage with controls.

Later this year, they’ll receive a new headrig carriage. They’re also slated to receive a new trimmer with MillExpert optimization and Bioluma 4900LV scanners.

Along with the new equipment, USNR is committed to helping Evergreen Forest bounce back with additional upgrades, training, and 24/7 support to tackle any issues that may arise.

USNR is proud to work with Evergreen on this undertaking to get production running even better than before.

To read other Fire related posts click here.

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The post Evergreen Forest – new equipment following fire damage appeared first on International Forest Industries.

Nokian Tyres is investing in a new production line for heavy tyre inner tubes at its factory in Nokia, Finland. The first inner tubes made in Nokia are expected to be ready in the first half of 2025. Source: Timberbiz “The sizes of heavy tyres and customer requirements have increased significantly. With the new production line, we want to respond to market needs and serve our customers even better also in terms of inner tubes, rims and finished wheel packages. The new inner tube production line will provide us with the additional capacity needed and is important for a balanced heavy tire product portfolio and growth,” said Manu Salmi, EVP, Heavy Tyres and Nokia Factory. The inner tubes have previously been manufactured in Lieksa, Finland where production will end in stages during 2025.  

As the Russian invasion of Ukraine stretches into its third year, international trade has felt the effects as sanctions on Russian exports have expanded. Now researchers have found that the invasion may not only have significant short-term impacts on the global timber markets but may leave lasting effects on the global economy and the environment. Source: PhysOrg These findings are detailed in a new study which projects the impact of sanctions on Russia and military disruption in Ukraine on the global wood product markets. Researchers compared two projected scenario outcomes based on the Global Forest Products Market model, one simulating a scenario with no invasion and another projecting the effects of current sanctions on wood products and trade disruption in Ukraine out to 2025. This allowed them to form their own model which predicts changes to the global wood product markets in both the near future and the long term. Rajan Parajuli, associate professor of forest economics and policy at North Carolina State University and corresponding author of a paper on the study, said that the immediate impacts of the invasion could be severe. “In the short term, which we define as within 10 years of the end of the invasion, our model predicts an increase in price up to three percent for things like industrial roundwood and finished wood products,” he said. “Russia is a top producer of forest products, and they supply all over the world, so sanctions on them are very impactful. You must also factor in the disruptions in Ukraine, where the military operations will make things like timber harvesting very difficult.” Despite this, Russia may regain a good deal of its overall timber market share in the long term. Looking as far forward as 2050, the model predicts a lower overall level of disruption as Russian markets for industrial timber recover. Researchers set a baseline assumption that the invasion will end in 2025, and the model predicts that global markets will begin returning to pre-invasion levels within 10 to 30 years after that. Despite the lower overall level of disruption predicted in the long term, researchers do not expect some product markets to ever return to their exact pre-invasion states. Parajuli said that some effects may last beyond the end of the conflict. “We found that products like wood-based panels, paper and paper board will not recover in Russia or Ukraine. These are not large markets, and our model predicts that if these countries cannot produce those products for a few years, other countries will move into that space,” he said. “The sanctions will cause higher prices, which we predict would lead resource-rich countries like the United States and Canada, China and some other Asian countries to ramp up production. They will want to sell while the price is high.” This shift in production and trade could have serious implications worldwide, both economically and environmentally. While increased production in other countries could be a significant economic driver, researchers also warn that it could lead to loosening environmental regulations and increased deforestation caused by an upswing in timber logging. Specifically, developing countries which already suffer from high levels of illegal logging may bear the brunt of increased deforestation and environmental harm. Despite the lower overall level of disruption predicted in the long term, researchers do not expect some product markets to ever return to their exact pre-invasion states. Parajuli said that some effects may last beyond the end of the conflict. “We found that products like wood-based panels, paper and paper board will not recover in Russia or Ukraine. These are not large markets, and our model predicts that if these countries cannot produce those products for a few years, other countries will move into that space,” he said. “The sanctions will cause higher prices, which we predict would lead resource-rich countries like the United States and Canada, China and some other Asian countries to ramp up production. They will want to sell while the price is high.” This shift in production and trade could have serious implications worldwide, both economically and environmentally. While increased production in other countries could be a significant economic driver, researchers also warn that it could lead to loosening environmental regulations and increased deforestation caused by an upswing in timber logging. Specifically, developing countries which already suffer from high levels of illegal logging may bear the brunt of increased deforestation and environmental harm. The paper, “Projected Effects of the Russian Invasion of Ukraine on Global Forest Products Markets,” is available in the journal Forest Policy and Economics. Co-authors include Prakash Nepal and Austin Lamica. You can download the paper here.

After the devastating fire at Notre-Dame de Paris in 2019, French furniture manufacturer Bosc was selected to create 1,500 chairs for the cathedral. Source: Timberbiz PEFC France met Sylvain Bastiat, Commercial Director of Bosc, who spoke about the Archbishop of Paris’ vision for the chairs’ design, his company’s history, and their commitment to using PEFC-certified wood. Bosc is the high-end brand of the company Sièges Bastiat, founded by Mr Bastiat’s grandfather in 1964 in Hagetmau dans les Landes, Southwest France. For 60 years, and thanks to the carpentry, cabinetmaking, upholstery, and sewing expertise of its entire team of 17, they have been manufacturing chairs, sofas, and armchairs entirely in wood in their workshop. Recognised as a Living Heritage Company, the family business differentiates itself in the market by choosing to work with and integrate wood into all its projects. In an increasingly globalised, competitive sector dominated by metal, the presence of French wood in all the products allows the company to meet the growing consumer demand for offerings while maintaining a reduced environmental impact and contributing to the local economy. “One of the points that allowed our proposal to stand out was undoubtedly the design of the chairs imagined by French designer Ionna Vautrin,” Mr Bastiat said. “The Archbishop of Paris wanted almost silent chairs that would highlight the cathedral’s architecture. “The designer proposed a chair with a lower backrest, making it easier for worshippers to lean on it while praying, and equipped the chair with bars to let light through. “We are truly delighted that Ionna turned to us to bring the chairs of this historic monument to life, with a model that stands out from most models found in religious establishments.” The choice of wood from sustainably managed French forests was also crucial in the archbishop’s final decision. “As with all our products, we offered Notre-Dame Cathedral chairs made of French oak from our French partners, the sawmill Gaudelas and the Ducerf Group both PEFC-certified allowing us access to PEFC-certified, local raw materials,” Mr Bastiat said. “As specialists in wooden seating, it is unthinkable for us to use wood without the assurance that it comes from sustainably managed forests. This is precisely what PEFC certification allows us to attest.”

In the United States lumber market, a ratio of lumber futures prices to gold futures prices is often used to gain insights into broader economic trends, investment strategies, and market behaviours. Gold is widely regarded as a reliable store of value over the long term and serves as a hedge against inflation driven by depreciating fiat currencies. Source: Margules Groome Margules Groome has developed an Australian index comparing Australian softwood raw sawlog prices to gold prices (Figure 1), using data from KPMG’s Australian Pine Log Price Index (APLPI) [1] for medium-sized sawlogs.   The Australian log-gold index, which tracks relative prices from 1995 to present, indicates sawlogs prices have declined over the past three decades relative to gold. Further analysis by Margules Groome compares Australian softwood stumpage prices and agricultural land prices relative to gold prices (Figure 2), using data from Rural Bank’s 2024 Farmland Values report [2]. As shown in Figure 2, in 1995, one ounce of gold could be bartered for approximately 8 cubic meters (m3) of medium-sized sawlogs on the stump. By June 2024, one ounce of gold can be bartered for more than 29 m3 of medium-sized sawlogs, indicating that, when measured against gold, medium-sized softwood sawlogs are currently about 360% cheaper than in 1995. The figure also shows that one ounce of gold can be bartered for around 0.4 hectares of agricultural land. Land prices relative to gold were relatively low around 2005, peaked around 2012, and are now in line with historical trends. The trend for land prices compared to gold remains relatively flat, suggesting a stable market price discovery process. Logs and timber Commodity prices are characteristically expected to move on short and longer terms cycles as demand shifts, and/or new efficiencies created on the production and consumption side. Unlike other Australian commodities such as energy or minerals which are largely export oriented and have benefitted from broader market exposure and structural changes in demand from China and other emerging economies, Australian softwood logs are grown for domestic consumption with some exports at the margin. This, together with historic pricing arrangements, appears to have quarantined Australian log producers from market price discovery which other commodity producers and exporters benefitted from. Despite the observed stumpage trend, transaction evidence shows that implied discount rates for Australian softwood forestland saw continued compression over the past two decades.  How can that be explained? Smaller estates being transacted are largely located on freehold land and supplies a marginal log volume at higher prices relative to the larger government forests. Land In contrast to logs and timber, land maintained its value relative to gold over time. Land values may be driven by several factors, including productive capacity, and highest and best use development opportunities. Like gold, land can also act as a store of value, particularly through periods of inflation such as experienced in the last few years. It is therefore unsurprising that land has tracked gold values over the sample period. Structural factors Further analysis requires considerations of some of the structural characteristics of the Australian softwood estate. Much of the Australian softwood estate was developed by state governments before being sold to institutional investors in the late 1990s and early 2000’s. The former government estate (98% of almost 1 M ha) is located on public land and quarantined from changes in the underlying cost of agricultural land. Timberland investments on public lands have therefore not been impacted (positive or negative) by changes in underlying land values (as demonstrated in Figure 2). An opportunity for timberland owners is to expand onto freehold land, thereby gaining some exposure to the underlying hedge of freehold land values. Another legacy issue for investors into former government forests, are the long-term log sales contracts inherited from the former government owner-developers in order to attract and retain employment-rich processing infrastructure to regional areas. These contracts have tended to reduce the price volatility that may have otherwise been expected in commodity markets. In the longer terms, these contracts may have also contributed to the downward pricing pressures for logs in Australia. An opportunity for today’s investor-operators is to unwind or modernise these legacy contracts to capture some of the price upside that is expected in future timber demand. Globally, demand for softwood is anticipated to tighten over the next decade, likely driving up imported softwood timber prices. The Food and Agriculture Organization (FAO) forecasts a 49% increase in global roundwood demand from 2020 to 2050, driven by advancements in mass timber, biomass, and cellulosic products. Given this context, there is substantial opportunity to develop more innovative pricing models for Australian-grown softwood logs and timber to support further afforestation and industry growth. For more insights and analysis, contact info@margulesgroome.com Note: Stumpage log price is the residual price received by the grower. [1] KPMG (2023) Australian Pine Log Price Index (Stumpage) Updated to December 2023 – Public Version, 19pp. [2] Rural Bank (2024) Australian Farmland Values 2024, Rural Bank – a division of Bendigo and Adelaide Bank Limited (Bendigo Bank), 57pp.