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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.  

FSC ANZ is hosting The Promotional Licence Holder’s Forum once again. Building on the success of the 2023 event, this exclusive gathering is designed to provide Promotional Licence Holders and their teams with an in-depth understanding of the positive environmental, social, and economic impacts supported by an FSC promotional licence. Source: Timberbiz In celebration of 30 years of FSC, this forum will offer a valuable opportunity to reflect on its collective achievements across Australia and New Zealand. Attendees will gain insights into sustainable forestry through engaging presentations from guest speakers, and a detailed overview of FSC Aligned for EUDR. Guest speakers include Kelly Williamson, Tree Crop Manager, Timberlands Pacific who will introduce the work of Australian FSC-certified forestry organisation Timberlands Pacific and discuss the organisation’s engagement with First Nations peoples and the traditional fire management practice of cultural burning. This session will provide insights into TPPL’s sustainable forest management practices and the significance of their FSC certification. Julie Roberts, Head of Sustainability, Mitre 10 New Zealand will speak on the History and Benefits of Mitre 10’s Partnership with FSC and explore the history of Mitre 10’s partnership with FSC and why they chose to be both Promotional Licence Holders and Chain of Custody certificate holders. This session will highlight the benefits and value of this approach and provide examples of how Mitre 10 has leveraged its relationship with FSC in its communications, marketing, and messaging. Other FSC ANZ Presentations: Melanie Robertson, CEO of FSC Australia and New Zealand Sarah Day, Engagement and Communications Manager, FSC ANZ Stefan Jensen, Policy and Standards Manager, FSC ANZ Jen Nicita, Trademarks and Partnerships Manager, FSC ANZ. The forum will be held on 20 August from 10am to 12 noon (Australia) or 12noon to 2pm in New Zealand. The event will be conducted via Zoom. Contact info@au.fsc.org for registration.

The Wood Processing Growth Fund (WPGF) second capital investment round of the Accelerator program is open, and applications must be received by 26 August 2024. Accelerator provides loans or equity finance to co-fund capital investment in new capacity and improvements that increase onshore wood processing capacity, productivity and improve competitiveness. Source: Timberbiz This second investment round continues to focus on projects that are investment ready. Investors who are advanced in planning a new wood processing development, or an expansion or upgrade to existing sawmills, engineered wood, panels, or roundwood production should consider applying. The WPGF also provides grants for pre-investment activities such as business cases, feasibility studies and technical assistance through the WPGF Catalyst programme. Some details on those two funding streams are as follows: Accelerator – up to NZ$33M in debt or equity investment in capital projects aimed at expanding wood processing. Catalyst fund – provides up to NZ$2 million per year in conditional grants to support feasibility studies and related pre-capital activities for wood processing projects. The WPGF is managed by Te Uru Rākau – New Zealand Forest Service in collaboration with Kānoa – Regional Economic Development & Investment Unit. Outside of the WPGF, Te Uru Rākau – New Zealand Forest Service can help connect with funding and support programs across government. These include the Sustainable Food and Fibre Futures Fund, NZTE, EECA, MBIE Kānoa, Callaghan Innovation, Green Investment Finance, Waste Minimisation Fund, Scion, Export Credit Office etc. If you have any questions or would like to discuss making an application, please either email or call: Email wpgf@mpi.govt.nz or NZ freephone call centre 0800 00 83 33. Or for more information you can visit https://www.mpi.govt.nz/forestry/forest-industry-and-workforce/wood-processing-growth-fund/

The New South Wales Government is preparing for the upcoming bushfire season with the rollout of new firefighting tankers and cutting-edge satellite technology to keep crews connected and safer during emergencies. Source: Timberbiz In a significant upgrade, RFS vehicles will now be equipped with Vehicle as a Node (VaaN) technology to ensure RFS personnel can communicate during a disaster in the most remote locations or if communication systems go down. The Starlink satellite technology will enable the use of radios, mobile phones, and other handheld devices anywhere and at any time, even in remote areas or if communication infrastructure has been damaged during a disaster. The upgrade will provide an important backup to communication systems and location-finding technology already in use. It will also give crews the capability to live stream video of fires from anywhere in the state, providing command centres with the latest intelligence about an incident. More than 5,000 RFS operational vehicles will be equipped with the new technology over three years under the $69 million VaaN project. The RFS is partnering with the NSW Telco Authority to deliver the communications upgrade, with installations beginning this year. “While the existing trucks have served our brigades well, it’s important that we safely equip members so they can best serve their communities across NSW,” RFS Commissioner Rob Rogers said. “Communications blackspots are a significant obstacle for rural firefighters and can make an already challenging operation even harder. This new technology greatly enhances our network of brigades across the state and will assist communities when needed.” The satellite upgrade comes after the NSW Rural Fire Service (RFS) delivered 143 new and 69 refurbished firefighting tankers to brigades across the state over the past year. Most new trucks have been deployed to regional areas across the state, benefiting communities from Balranald to Eurobodalla and Armidale to Gilgandra, with the state’s south receiving the largest uplift following the devastating 2019/20 Black Summer fires. Category 1 tankers, which are the most used on the fire front, make up the highest number of trucks dispatched across the state. The refurbishment of 69 existing trucks will also make them safer for crews, with a halo sprinkler system for the cabin, custom-fitted heat curtains, electric hose reels, and portable Public Safety Network and fireground radio chargers. To meet strict RFS firefighting requirements, the new trucks are being assembled locally at facilities in Kirrawee, Minto, Tomago, and South Windsor. This follows the NSW Government’s commitment to a new contract for the aerial RFS fleet, which provides certainty and a shift to a predominantly NSW-based crew over the coming decade. The Bush Fire Danger Period for northern parts of the state commenced on 1 August, and the statutory period for the entire state begins on 1 October.  

The Tasmanian Greenhouse Gas Emissions Report was welcomed by the Tasmanian Forest Products Association (TFPA) Chief Executive Officer, Nick Steel, who said the forestry industry continues to be a key part of Tasmania’s response to climate change. Source: Timberbiz “Tasmania’s forest industries are a major driver behind reducing Tasmania’s carbon emissions and achieving the Government’s net-zero goals, as highlighted by this report,” Mr Steel said. As production trees grow, they absorb carbon from the atmosphere and when they’re harvested, they lockup that carbon for the life of the product. Changes in the Land Use, Land use Change and Forestry (LULUCF) sector have resulted in increased carbon sequestration, which has had a major influence on reducing Tasmania’s greenhouse gas emissions. LULUCF emissions were 23.78 Mt CO2-e, or 211% lower than 1990 levels. “The latest report released today shows the key drivers for change over this period for the LULUCF sector were the change in annual emissions from the private native forest estate, an increase in sequestration in the plantation estate, and additional, and probably surprising to some, the managed public native forest estate continues to be carbon negative, as what it harvests it replaces to maintain a steady standing biocarbon stock,” Mr Steel said. Climate change is one of the biggest threats to our future. Around the world governments are responding to this threat and, in Tasmania, the forest industry is leading the charge. In Tasmania, every single tree harvested, both plantation and native, is replaced by either regenerating native forests or through the cycle of plantation replanted. And that tree captures more carbon as it grows again. “Forestry is a cornerstone of sustainable economic development in Tasmania, offering a myriad of direct and indirect benefits to our community,” Mr Steel said. “Our forestry industry is sustainable, renewable and is part of the solution to climate change.”

The new No Fake Poles website set up by the NSW branch of the Australian Forest Products Association is calling supporters to sign a petition to overturn the decision by Essential Energy to opt for UV coated fibreglass and resin composite power poles. Source: Timberbiz Durability, sustainability and affordability are the mainstays of the fight which also says that the impact on household budgets has already suffered as it has led to increased electricity bills. The site claims that electricity prices have already led to an increase in the number of families struggling to keep up with the cost of energy, with those struggling to meet electricity bills rising to 3% last quarter, with an average residential debt increase of $95. Essential Energy is a state-owned corporation and so the minister for the portfolio has the authority to direct Essential Energy to change its policy. A link on the site offers a simple way for supporters to petition the NSW government, you can access the petition here. The No Fake Poles website is at www.nofakepoles.com

The timber industry has stepped up its fight against the phase-out of wooden power poles across NSW, demanding proof that the manufactured ones won’t melt in bushfires. Source: AAP The NSW branch of the Australian Forest Products Association has launched a new website urging people to sign a petition against Essential Energy’s shift to UV-coated fibreglass and resin poles. The government-owned power infrastructure company, which services 95 per cent of NSW, says the change is necessary to boost its network’s resilience to events like the Black Summer fires. During that disaster over the summer of 2019 and 2020, more than 104,000 customers were affected by power outages across the company’s network, and more than 3,200 power poles were damaged. But the shift has upset some in the timber industry, which supplies the wooden poles that have long been used. James Jooste is the NSW chief executive of the Australian Forest Products Association and has called on the government to direct Essential Energy to continue using hardwood poles. He says there’s an absence of evidence to show composite poles are more fire resistant than wooden ones. “Show us the proof.” Mr Jooste says anxiety about adequate supplies of hardwood poles is justified, but only because government decisions are hampering the industry. He points to the creation of protected koala hubs in the government’s proposed Great Koala National Park, which will cover native forests that are logged by the government-owned Forestry Corporation. He says a review of the rules that govern native forest logging is also overdue, and that’s hampering the industry. “It’s policy decisions that are impacting the supply of timber, not the availability of timber itself.” But Essential Energy has hit back, saying it must act to reduce the impact of natural disasters on customers. “The decision to use composite poles across one of Australia’s largest electricity distribution networks has been years in the making,” it has told AAP. “We also consulted with our pole suppliers and Forestry Corporation of NSW across a range of topics including composite poles.” The company has also released a photo to dispel concerns about the new poles melting. The photo – taken by Essential Energy staff during the Black Summer fires – shows a manufactured, composite pole standing intact beside the charred remains of a timber one. Its submission to the bushfires inquiry also pointed out that fibreglass cross arms that were already part of its network often survived undamaged, while timber poles were destroyed. The Australian Energy Regulator also approved the switch to manufactured poles earlier this year, after a detailed examination. Essential Energy says that was in part due to concerns about “insufficient quantities of timber poles suitable to meet the needs of Essential Energy over the 2024-29 regulatory period”. The Forestry Corporation, whose hardwood division runs at a loss, has told AAP demand remains high for timber poles due to their affordability, durability, lower energy footprint and capacity to store carbon. “By the time each pole has reached the end of service a new pole has grown to replace it.” It has contracts to supply hardwood timber poles to other energy distributors until the end of 2028. Essential Energy refuted suggestions the transition will be another economic blow for consumers during a cost-of-living crisis, saying the installation of more composite poles will cost an average residential customer less than $2 per year over the next five years.