Forest Products Industry

FSC is extending the suspension of the Asia Pulp and Paper (APP) Memorandum of Understanding (MoU) on the implementation of the FSC Remedy Framework until the end of June 2025.  Source: Timberbiz The extension of the suspension is due to a conflict of interest identified between Domtar and the law firm FSC identified for conducting the legal review of APP and Domtar’s corporate groups. FSC is identifying a different independent, third-party law firm to conduct this legal review. In January 2025, FSC suspended APP’s remedy MoU until the end of March 2025 because of the changes APP and Domtar announced regarding the concentration of sole beneficial ownership of the two corporate groups. FSC is commissioning a legal review of the corporate groups of Domtar and APP to better understand the implications and the effect of this change, and any impacts on the scope of the APP remedy process and the MoU. FSC disassociated from APP’s entire corporate group in 2007. To remedy the environmental and social harms APP caused in the past, FSC and APP signed a remedy MoU in 2024 to implement the FSC Remedy Framework. Earlier this year, Jackson Wijaya, the sole beneficial owner of Domtar (an FSC certificate holder), took over as APP’s sole beneficial owner.

In 2024, Brazil exported nearly 20 million metric tons (MT) of pulp, marking a 3% increase in volume compared to 2023 and a 34% rise in export value. Source: Timberbiz These numbers are expected to grow as planned pulp mill investments come to fruition. Some of these include: In December 2024, Suzano S.A. inaugurated the world’s largest single-line pulp mill in Ribas do Rio Pardo, Mato Grosso do Sul, which has an annual production capacity of 2.55 million MT. Chile’s Arauco is building a US$4.6 billion bleached eucalyptus market pulp mill that will be the world’s largest pulp mill project with 3.5 million MT/year capacity when it starts up in 2027. Dissolving pulp producer Bracell has earmarked US$4 billion to build a 2.8 million MT/year pulp mill in Água Clara. Competition for land in Brazil and investments in pulp production capacity have been key factors in rising log prices for the past two decades. However, Brazil’s pulp producers have the advantage of a huge and expanding planted forest resource to provide wood fibre. The country’s planted tree area has expanded to reach 10.2 million hectares, while protecting and expanding the wood fibre resources plays an important role in pulp producers’ investment decisions. Suzano’s R$22.2 billion Cerrado Project investment includes R$6.3 billion for timber plantations and logistics, while Klabin announced plans at the end of 2023 to purchase Arauco’s forestry assets in Paraná for US$1.16 billion. Brazil is the largest supplier of hardwood pulp to the US, and its pulp industry is waiting to see how it might be affected by the current US enthusiasm for tariffs. There has been some speculation that any increase in prices of Northern Bleached Softwood Kraft Pulp (NBSK) as tariffs hit Europe and Canada could push US tissue producers to switch to hardwood pulp, increasing business for Latin American producers. Brazil’s pulp industry is on a promising trajectory, fuelled by substantial investments in new pulp mills and the expansion of timber plantations. While challenges such as increasing log prices and land competition persist, Brazil’s extensive planted forest resources offer a significant competitive advantage. As the leading supplier of hardwood pulp to the US, Brazil stands to gain from potential shifts in global pulp demand. For further insights into Brazil’s pulp mill investments and wood fibre costs.

JCB is set to double the size of a new factory currently under construction in Texas as the company confirmed today that newly announced tariffs will impact its business in the short-term. Source: Timberbiz JCB has been manufacturing in the USA for 50 years, and last year bought 400 acres of land in San Antonio after recognising the need to produce even more machines in North America, where the company’s existing manufacturing plant in Savannah, Georgia, has operated for 25 years and employs around 1,000 people. The original plan for a 500,000 square feet factory in San Antonio has now been revised and JCB is forging ahead with plans to double its size to one million square feet. The new US$500 million plant is due to start production next year and employ up to 1,500 people and will build on JCB’s growth in North America. JCB has been in business for 80 years this year and it is well accustomed to change. “The United States is the largest market for construction equipment in the world and President Trump has galvanised us into evaluating how we can make even more products in the USA, which has been an important market for JCB since we sold our first machine there in 1964,” Lord Bamford, JCB Chairman said. JCB CEO Graeme Macdonald said that in the short term, the imposition of tariffs will have a significant impact on the business. ‘However, in the medium term, our planned factory in San Antonio will help to mitigate the impact. We are thankful that the tariff is only 10% and we can only hope that the UK Government will conclude negotiations on a trade deal in the coming days and weeks.”

As the US President continues to dismantle world trade by introduction of tariffs and other means, IndustryEdge continues to cast a spotlight onto the facts. Source: IndustryEdge This is one in a series from IndustryEdge, that will address specific details of bilateral and multilateral trade in the materials, sectors and industries in which we are involved, for both Australia and New Zealand. Australia has been hit with the ‘base’ 10% tariffs on its imports to the USA. This will impact wood and wood products trade, as well as wood products trade. However, many other countries especially countries with whom Australia has significant trading positions, face far higher tariffs for trade into the USA. As the world has come to learn, the rationale for the tariffs is a mix of misunderstanding, economic voodoo and a failure to check whether some locations were even countries or inhabited by anything more than penguins. Global capital and stock markets have faltered significantly since the announcement (which has already come into force). Investors are recalculating risks and devaluing assets the world over. Major institutions now say global recession is a 50/50 bet and a US recession is pretty much assured. It’s a rerun of the 1930 Smoot-Hawley Tariff Act that created a trade war that extended the Great Depression by years and was opposed almost universally outside the US and by nearly all economists and business leaders. Sound familiar? Below, we outline the headline facts of Australia’s trade in wood products with the USA. In calendar year 2024, Australia operated a trade deficit for wood and wood products with the USA, valued at AUD84.2 million. That is, Australia exported wood and wood products valued at AUD9.0 million, but imports from the USA were valued at AUD93.2 million. That balance of trade deficit was the lowest in many years. Imports from the USA accounted for 3.5% of total wood and wood products imports by value. The USA was the fifth largest supplier to Australia, with total imports valued at AUD2.657 billion. Exports to the USA accounted for just 0.5% of total wood and wood products exports by value. The USA received the ninth highest value of Australian products, which in aggregate were valued at AUD1.639 billion, dominated by woodchip exports. Australia’s Bilateral Balance of Trade with the USA in Wood & Wood Products: 2017 – 2024 (AUDM) Source: ABS, derived and IndustryEdge In 2024, Australia exported wood and wood products valued at AUDFob1,638.9 million. Nearly one third went to New Zealand and close to 15% was delivered to the USA. Australia’s exports went to 155 countries over the year. The chart shows the top five ‘countries’, the table shows the top 14. It is notable that ‘No Country Details’ dominates. This is the entirety of Australia’s hardwood and softwood woodchip exports, most of which are delivered to China and Japan. Australia’s Wood & Wood Products Exports by Main Country: 2024 (AUDM & %) In 2024, Australia imported wood and wood products valued at an enormous AUDFob2,656.5 million. China delivered 42.0 % of that – more than AUD1.1 billion worth, with the USA in fifth place behind Indonesia, New Zealand and Malaysia. The chart shows the top five countries, the table shows the top 12, but again, it is relevant that Australia received shipments from 126 countries in 2024. Australia’s Wood & Wood Products Imports by Main Country: 2024 (AUDM & %) The regrettable, worrying and seemingly ill-considered positioning of the US President can have many effects. Not least is a slowdown in global economic conditions, as trade reduces and as a minimum, is completely disrupted. In arguing the tariffs amounted to ‘liberation’ for America, we are entitled to ask the proponent, Mr Trump, ‘liberation from what?’ We will resist the temptation to borrow from the Orwellian playbook, in which liberation may be considered code for enslavement. Instead, it seems likely the liberation to which Mr Trump refers, is liberation from the rules of global trade. In turning to old-fashioned and failed protectionist measures and engaging the world in a trade war that only the most desperate sycophants and client states are likely to join, the US President is retreating to isolationism, masked by an increasingly disturbing version of nationalism. As The Economist magazine wrote this week: “Although Mr Trump has committed one of the worst policy blunders of all time, he was lucky enough to inherit a strong economy. How much pain can it take?” Retaliatory actions are already underway against US manufactured goods and companies. That is hardly surprising, and not a recipe for reinvigorated manufacturing. The extent of consumer-level reactions against US products may never be fully understood, but can be observed to some extent, in respect of Tesla’s electric car sales. When the Smoot-Hawley Act was in full force in 1931-33, the US economy tanked: GDP collapsed, both imports and exports fell dramatically, and the unemployment rate doubled. Arguably, those tariffs extended the Depression. By 1934, the tariffs were much reduced, though it took the Second World War for the US to recover properly. Following the intercession of World War II, the global trade architecture heralded by the Bretton Woods Agreement, the International Trade Organisation (ITO) and the General Agreement on Tariffs and Trade (GATT) (the USA and Australia were among the eight original signatories) were quickly installed, heralding a period of substantial and open international trade. When the World Trade Organisation replaced the ITO and the GATT in 1995, both countries were again at the forefront. Today, that openness and the architecture supporting it, is again threatened by US isolationism. The hyperbole of the US President describing the imposition of universal tariffs as ‘Liberation Day’ requires comment. We need to unpick this language, in order to understand its real meaning. In imposing unilateral tariffs, the USA is withdrawing from the eight decades long multilateral rules-based system that has governed international trade since the end of World War II. If this is liberation, it is liberation from obligations to other nations and to […]

Green construction materials from the top of New Zealand’s South Island will be used in new multi-storey buildings being constructed at Parliament. Sources: The Nelson Mail, The Press Nelson Pine Industries will be providing more than 700 cubic meters of Laminated Veneer Lumber (LVL) timber, which will form part of the mass timber frame for the Museum Street building, instead of using steel or concrete. Company chief executive Kai Kruse said the LVL timber, which was made using only logs from the top of the South Island, had a high level of seismic resilience. “As well as being lighter and stronger than traditional steel or concrete structures, using a mass timber frame was the more environmentally conscious choice,” he said. The framing will arrive in Wellington from April in partly assembled sections and will be installed three storeys a time. “This LVL also has outstanding green credentials, which will contribute to the Museum Street building being net carbon zero. “As part of the mass timber frame, it will sequester 201 tons of carbon,” Kruse said. Construction of the new buildings, which are to house MPs and staff within the parliamentary precinct in Wellington, began in 2022 and are scheduled to be completed by late 2026. “This LVL also has outstanding green credentials, which will contribute to the Museum St building being net carbon zero. “As part of the mass timber frame, it will sequester 201 tons of carbon,” Kruse said. Construction of the new buildings, which are to house MPs and staff within the parliamentary precinct in Wellington, began in 2022 and are scheduled to be completed by late 2026.  

The Tasmanian Forest Products Association has welcomed a commitment by the Federal Labor Party to increase funding for the Tasmanian Freight Equalisation Scheme by $95 million, as well as promising a review into the modernisation of the program, if it wins the May 3 Federal election. Source: Timberbiz Speaking following the announcement, TFPA Chief Executive Officer Nick Steel said the modernisation of the scheme was vital to keeping Tasmanian businesses competitive. “The TFES model, as it stands, is no longer fit for purpose. This scheme was set up almost 50 years ago and it’s clear it’s no longer working for Tasmanian businesses,” Mr Steel said. “That’s why we welcome Labor’s commitment to increasing funding for the scheme – to ensure correct cost recovery as well as a full review into the modernisation of the TFES.” Mr Steel said making sure the scheme is fit for purpose is more important now more than ever. “Australia is currently in a cost-of-living crisis. It’s being particularly felt here in Tasmania, not only by consumers but also by businesses trying to sell to the other states,” Mr Steel said. “Being an island, Tasmania is at a distinct disadvantage compared to other states when shipping goods to their markets. That’s why the Whitlam Government introduced the TFES in the 1970s to go some way to level the playing field between mainland and Tasmanian businesses. “However, to work properly it’s essential to regularly review the scheme to ensure its original purpose remains relevant.” This announcement brings bipartisan commitment to the modernisation of the scheme – ensuring it remains fit for purpose into the future. The Federal Coalition has promised that if elected it will oversee a review of the Tasmanian Freight Equalisation Scheme and support Tasmanian businesses to the tune of $62 million while that review takes place. “It’s pleasing to see that both sides of politics recognise the importance of the TFES in allowing Tasmanian businesses to compete on the mainland,” Mr Steel said. “The TFPA looks forward to continuing to work with both sides of politics to ensure other issues for Tasmanian forestry remain on the political radar.”

The Federal Coalition will back in Australia’s renewable forestry industry with a rock-solid commitment of no more lockups. Shadow Forestry Minister Senator Jonno Duniam, who was joined at Neville Smith Forest Products in Launceston by all of the Liberal’s 2025 Tasmanian election candidates at the weekend, said that the announcement backed in the vital industry. Source: Timberbiz “Only the Coalition can be trusted to stand up for Australia’s native forest industry,” Senator Duniam said. “Our forest industry is renewable, it’s sustainable, it provides a vital product that we need, and importantly it sustains regional communities. “A Dutton Coalition Government will not support any further bans on native forestry. “Not one more tree, not one more stick will be locked up under us.” Senator Duniam said that the Coalition position on forestry provided a stark contrast to that offered by Labor. “Shutting down native forestry is in Labor’s DNA. They’ve done it in Western Australia, they’ve done it in Victoria, and they tried to do it in Tasmania the last time they were in power with the Greens in 2010-2013,” Senator Duniam said. “On Thursday, Labor’s rookie candidate for the seat of Bass spoke the truth when she revealed that she believed that native forestry should be shut down,” he said, On Thursday, during a live radio interview with ABC Northern Tasmania, the Labor candidate for the northern seat of Bass, Jess Teesdale, conceded she wanted to see the state government end the practice. It came after she said the federal Labor government would not intervene to override the states. The ABC later reported that later the candidate, who is standing for a federal election for the first time, issued a clarification. “The Albanese Labor government is not changing its policy on native forestry logging,” it read. “These are state forests managed by the Tasmanian Liberal Government. “We support the jobs and the communities that rely upon this industry.” Senator Duniam said there was no doubt, given half the chance, Labor will “try to shut our forestry industry down – especially with the Greens likely pulling their strings in a minority government”. “The only way to support and safeguard our forestry industry is to vote for the Coalition,” he said. Speaking after the announcement, TFPA Chief Executive Officer Nick Steel said the industry is pleased the Coalition plans to back all forms of our sustainable industry. “Peter Dutton’s commitment to all forms of forestry – including our sustainable native sector – provides the certainty our industry needs to invest and grow our businesses for years to come,” Mr Steel said. “Tasmania’s forest industry is predominantly based in rural and regional towns, so the ability to plan and invest for the long term means our businesses can support the communities that they live and work in into the future. “News that a Coalition Government will provide $40 million in matched grants to establish a new Timber Manufacturing Expansion Program will further assist local businesses to value add on-island and will work hand-in-hand with the Tasmanian Government’s on-island processing grants. “Recommitment to the Coalition’s TFES improvements is also welcomed and following the success of Tasmania’s Permanent Timber Production Zone (PTPZ) program, it’s pleasing to see the Liberal, if elected, will roll out Similar zones across Australia. “Today’s announcement shows that the Liberal Party is committed to protecting our sustainable industry into the future, and we look forward to receiving similar strong commitments from the Labor Party in the coming weeks.”

The Australian Forest Products Association wants Federal Labor and the Coalition to ensure their political support for Australia’s sustainable native forestry is clearly communicated. Source: Timberbiz The sector supports the livelihoods of thousands of Australians, while millions more benefit from the essential and sought after products the sector manufactures for our everyday life, AFPA Chief Executive Officer Diana Hallam said on Friday. The Coalition at the weekend said it would back in Australia’s forestry industry with a rock-solid commitment of no more lock-ups. “The time has come in this Federal Election Campaign for Federal Labor and the Coalition to express their unequivocal support for Australia’s native forestry sector and that they’ll stand by that support in the event of a hung parliament next term. These are essential industries that Australia cannot live without and require strong Commonwealth support and a political mandate to operate. We need to know where they stand,” Ms Hallam said. The AFPA’s call to the major parties follows comments on Thursday by the Labor candidate for the northern seat of Bass, Jess Teesdale that she wanted to see the end of native logging. Her office later issued a clarification, saying that “the Albanese Labor government is not changing its policy on native forestry logging”. “These are state forests managed by the Tasmanian Liberal Government,” it said. “We support the jobs and the communities that rely upon this industry.” Ms Hallam said the AFPA acknowledged the comment was walked back and labelled a mistake. “But a clear statement from Federal Labor, as well as the Coalition on their support for native forestry, not just in Tasmania, but nationally, is required – just as Prime Minister Albanese and the Coalition provided ahead of the 2022 Federal Election. “Native forestry operations are governed by the Federal-State Regional Forest Agreement (RFA) framework – thereby both the Commonwealth and States are required to work together, and a mandate is required from both levels of government. “This sector is essential for Australia’s sovereign capability in timber and wood-fibre resources, for the manufacturing of essential and everyday products and to underpin many communities that rely on the sector for direct employment and economic activity. Many of those communities are in regional Australia – and indeed, many in the federal electorate of Bass. “Native forestry has been forced to bear the brunt of constant and unwarranted attacks from radical and so-called green activists who are hell bent on wanting to destroy an industry Australia cannot live without. “Both sides of federal politics need to be united in their support for native forestry. The communities and families that rely on this wonderful sector deserve to have the backing of whichever major Party forms Australia’s next Federal Government,” Ms Hallam said.

The Victorian State Government has been blasted for not supporting the businesses it promised to assist in shutting down the native timber industry. Gippsland East Nationals MP, Tim Bull, said the State Government was applying criteria that stopped it assisting the very businesses it promised to help. Source: Timberbiz “On August 23, 2023, Agriculture Minister Gayle Tierney put out a media release stating the Andrews Labor Government would support businesses that were impacted but not licensed to VicForests and the media release cited firewood sellers, guitar makers and seed collectors as examples,” he said. “But 18 months later and firewood sellers, Tim and Andrea Knight – the very type of business that was stated would be supported, are not. “They are now told the forestry transition support packages for businesses are being directed towards those businesses with a contractual relationship with VicForests, or businesses that offered specialised services to either VicForests or sawmills. “However, the original statement from Minister Tierney said businesses would be supported that were not licensed to VicForests. “The Knights have also been told they are classified as ‘retailers’ and can therefore source their product from elsewhere or sell alternative products.” Mr Bull said that this raised three points: They were purchasing directly from VicForests, so how are they not eligible? Secondly, they simply cannot purchase firewood elsewhere at an affordable level with the timber industry having closed. Thirdly, regardless of the above, there is no mention of retailers being excluded in the original announcement or media release. Mr Bull pointed out a further anomaly. “Trucking company, Pelz Haulage, had a large part of its business servicing mills, among other things removing the sawdust,” he said. “The correspondence to the Knights says businesses that offered specialised services to sawmills (like Pelz Haulage) will be covered. “But there is no explanation as to why Pelz Haulage is not being compensated. “This is all happening while we have timber transition money being spent on rubbish like (quoted from the latest Labor media release): Upskilling community members to help identify future economic opportunities, and Identifying initiatives by local Innovation Working Groups through Local Development Strategies. “This will amount to nothing and is money that that should be going to those whose livelihoods have been taken away or impacted,” Mr Bull said. “We now have a new Minister in Ros Spence, who has in the past shown a better understanding and more rational approach, and I have asked her to intervene and assist these businesses as her predecessor promised.”  

Giving in to Federal Greens policies would wipe an astonishing $4 billion annually off Tasmania’s GSP and destroy 15,500 jobs, according to a simple review of ABS data, according to the Liberal Member for Bass Michael Ferguson. Source: Timberbiz “The Greens have made it clear that they want to shut down Tasmania’s job-rich mining, aquaculture and forestry industries,” Mr Ferguson said. He said that based on the latest data from the Australian Bureau of Statistics, approximately 15,500 Tasmanians were employed in these industries, collectively contributing $4 billion to the State’s economy each year. “The Liberal Party value these jobs and these people. Tasmania needs these vital industries,” Mr Ferguson said. “That’s a whopping 10.5 per cent of Tasmania’s GSP that would be at massive risk when Labor does a deal with the Greens to form Government. “To put it another way, Tasmanian households would be $17,000 worse off each and every year,” he said. “This is before the Greens kill off our defence industries, our advanced manufactures and other productive industries.” Mr Ferguson said that based on Labor’s failure to genuinely and quickly stand up for aquaculture jobs in Macquarie Harbour, Tasmanians were right to be fearful of a re-elected Labor government in Canberra, propped up and held hostage by the Greens. “Tasmanians have seen the Labor-Green nightmare before, from 2010 to 2014. Tasmania went into recession, and 10,000 Tasmanians were sent to the unemployment scrap heap,” he said. “The impacts are still being felt 10 years later, and Tasmanians will never forget. “That’s why we unashamedly say – Tasmania can’t afford to risk another Labor-Green Government.”