12 May 2008
New Zealand’s Carter Holt Harvey has begun a process to purchase the timber manufacturing and timber distribution business of Weyerhaeuser Australia, US parent company Weyerhaeuser Company has announced.
This includes Weyerhaeuser’s interests in Green Triangle Forest Products, held by a fund advised by Global Forest Partners.
The offer includes:
* Pine Solutions Australia – the selling and distribution operations located at Narangba in Queensland, Berkeley Vale and Gordon in New South Wales, Dandenong, Vic, and Adelaide.
* Weyerhaeuser Australia – the Caboolture sawmill in Queensland and the Tumut mill and associated Gilmore operation in New South Wales.
* Green Triangle Forest Products manufacturing – the Lakeside sawmill and the pine mouldings operation at Mount Gambier, SA, the Dartmoor sawmill in Victoria, and the export chip business operated out of Portland, Vic.
Weyerhaeuser Company, Global Forest Partners, the investment advisor to RII World Timberfund and 50% owner of Green Triangle Forest Products, and Carter Holt Harvey have entered into a non-binding letter of intent relating to the transaction.
The transaction is subject to regulatory approvals by the Australian Competition and Consumers Commission and the Foreign Investment Review Board. However, CHH’s ownership of timber business in Australian is unlikely to prevent ACCC approval of the transaction.
Weyerhaeuser’s announcement follows the Federal Way, Washington-based company’s reported net loss of US$148 million for the first quarter of 2008.
ETS will cut New Zealand’s ‘environmental lifeline’
The Government’s proposed Emissions Trading Scheme is in danger of cutting New Zealand’s environmental lifeline – its forests and wood products – according to Dave Anderson, chairman of the Wood Processors Association.
”In a world becoming increasingly carbon constrained, the last thing we would want to do is reduce our capability to grow trees and process wood,” Mr Anderson said. “Trees, after our oceans, are the single greatest absorbers of CO2, which is then stored in wood products, sometimes for centuries.
“It would be sheer madness to have policies which reduce the incentive to grow trees and promote wood products, but there is a real danger of this happening with the proposed Emissions Trading Scheme.”
Mr Anderson said the industry had commissioned independent economic analyst Castalia to model the impact of the ETS on the wood processing sector. Castalia identified that the industry was already under pressure with the high exchange rate;madditional cost imposts arising from an Emission Trading Scheme were going to make it even less viable.
“The key to the problem,” Anderson said, “is that the New Zealand industry will be forced to compete against similar industries in other countries that will not have to pay carbon taxes, making NZ operations less cost competitive.”
”The Castalia report demonstrates variable impacts across different types of processors. Pulp operations selling directly onto the open market are tight but viable, but it is likely the ETS will tip them over the edge.
“Apart from the loss of this significant industry, it would also result in downstream consequences. For example, pulp mills provide a market for wood chips, which improves the viability for the sawmilling sector. The loss of this market, together with direct ETS impacts, would likely cause the closure of perhaps 20 percent of sawmill capacity.”
Mr Anderson said the most successful value-added portion of the industry – MDF and LVL producers – would maintain reasonable returns on operations in an ETS environment, but those returns would not be sufficient to support long-term investment by existing operators or encourage new investment.
He said the overall result would be a combination of closures and stagnation because wood processing would move offshore leaving foresters no option but to export logs.
“This will cause increased transport and processing emissions, as the bulk logs will be processed by countries burning fossil fuels,” he said.
“By contrast, a vibrant and profitable wood industry in New Zealand would have the confidence to promote the use of wood both domestically and internationally resulting in greater storing of CO2 in wood products, with fewer production and transport fossil fuel emissions.”
Multi-Camera Approach to Safety for Forest Workers
Real gains in preventing injuries to forest workers who fall trees could be made following ground-breaking video research in New Zealand.
As part of a study funded by the Accident Compensation Corporation (ACC), the Crown Research Institute Scion’s Centre for Human Factors and Ergonomics (COHFE) attached two video cameras to the helmets and shoulders of both experienced and inexperienced tree fallers. The cameras recorded when the tree fallers looked up, what cuts the workers were doing at the time, and how many cuts they had to make.
The project was aimed at assessing how often tree fallers “looked up” and whether inexperienced fallers looked up less than experienced workers, making themselves more likely to be hit by falling objects.
“We commissioned the research because between July 2005 and June 2006 seven forestry workers were killed while tree falling, which was a disturbing surge in fatalities,” Don Ramsay, ACC’s forestry injury prevention program manager said.
“All fallers are trained to ‘look up’ before they start their back-cut (the second set of cuts that actually fell the tree) because that’s when objects could be dislodged from branches and fall on them,” Ramsay said. “But it seemed this wasn’t happening. We wanted to find out if experienced and inexperienced workers worked differently from one another.
“It is clear the focus needs to go on ensuring novice workers have the knowledge to do their jobs well and safely ingrained in them when they start work rather than hoping they’ll pick it up as they go along.”
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