Wood market worms are turning

Significant shifts are occurring in the international wood products market – driven by rising container freight rates, higher wages and much stronger Asian economies compared to the West.

Earlier in June the world’s biggest electronics manufacturer, Taiwan-owned Foxconn awarded its 400,000 Chinese workers a performance-based wage rise approaching 100%. This is the same company accused of running a sweatshop and linked to a number of suicides at its Shenzhen factories.

Elsewhere there have been strikes and increasingly militant demands for higher wages from China’s low-paid assembly line workers, who have fed the world’s consumption binge.

Not too long ago, most Western countries with the natural resources to match (including Australia and New Zealand) had successful wooden furniture industries – manufacturing for local and export markets. Then it all went ‘East’.

But according to at least one international wood markets watcher, some of the worms may be about to turn. While the US recovery from the GFC is expected to be much slower than anticipated, and there is worse in prospect across Europe, APP Timber CEO Michael Hermens says Asian economies are very strong. And as a consequence, demand for finished timber products is on the rise.

“Many Asian manufacturers are now looking to market their products domestically – within Asia – rather than 100 percent export.” (Read full story)

World class softwood grading

Australia appears to be leading the world with its new MGP grading system for structural softwoods.

A paper on the re-assessment of the Australian MGP grades was delivered to 650 delegates at the World Conference on Timber Engineering (WCTE) in Italy last week. The system (now going through the Standards Australia process) is considered world class and presents a fresh approach to grading standards. It will cater for any species and any grading method, and provide for the verification of structural properties. (Read more)

New advocacy leader due

Expect an announcement around the end of this week on who will take over from Peter Bodeker as chief executive of the New Zealand Wood Processors Association.

The WPA performs an important advocacy role for the New Zealand wood processing sector, representing pulp and paper, engineered wood products, sawn lumber and the fabrication of frames and trusses. And if it is not to shrink further under unfavourable political and market conditions, a well-connected lobbyist would probably be rather important. (Read more)

No gain without more R&D

Opinion shifts and changes in international supply and demand may be working in favour of New Zealand-style plantation forests, but the full benefits won’t be realised until there is more investment in R&D.

Future Forests Research (FFR) CEO Russell Dale (pictured) – named Forester of the Year by the NZIF in June – says while the signs are encouraging for plantation regimes, “New Zealand stands to make even greater gains if we complement this growing demand with investment in R & D”. (More)

Scion changes heads

Crown research company Scion loses its chief executive of five years at about the same time as the two top board positions change hands.

Just as Scion chairman Dr Russ Ballard was announcing the departure (in August) of Dr Tom Richardson (pictured) to become CEO at another CRI, AgResearch Ltd, New Zealand science and technology minster Wayne Mapp was signaling the departure of Ballard and deputy chair Bronwyn Monopoli. (More)

In the next In-Wood

Subscribers to the hard copy and electronic editions of In-Wood Australasia can expect the July issue next week.

Headline stories:

- TALL TIMBER: Norwegians will have world's highest timber building

- TRANSACTION DRIVEN: Forest owners urged to take control of wood marketing

- CANE STRATEGY: Queensland plantation interests have eyes on sugar cane country

- LIFTING SKILL BASE: $6 million sought for big training push

- CCA: WAS THERE EVER A PROBLEM?

- NOT ALWAYS THE REAL DEAL: Continuing worries about shonky imports

- RHYME OR REASON: Green Building Council outdoes itself with new concessions

- CHANGING DYNAMICS: Concerns about hardwood supply post-Hancock buy-up

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COMING IN JULY ISSUE

Norway is planning an 80 m tall timber building to stand almost on the Arctic Circle as an icon of the country's heritage and skill. (Subscribe and read)