Tembec has suffered reduced production because of a reduced work week, both at its Elko sawmill and its corresponding planer mill.The company will tolerate a similar situation at its Canal Flats sawmill and corresponding planer mill starting next week. Over the next three months, Tembec will take the equivalent of three weeks of production downtime, through reduced shifts at the mills. Tembec is working with Human Resources and Social Development Canada (HRSDC) to implement a Work Sharing Program to reduce the impact on its affected employees during this period. Production requirements will be re-evaluated following the initial three-month period. These curtailments will reduce production by approximately 24,000 mbf totalling an annualised reduction of 124,000 mbf since July 2007. The Canal Flats and Elko sawmills and planer mills have a combined annual production capacity of 420,000 mbf of SPF lumber and employ approximately 480 people. Dennis Rounsville, Executive Vice President and President: “These curtailments are being taken due to the sharp decline in demand for lumber given poor housing market conditions in the United States, low lumber prices and the impact of the high valued Canadian dollar relative to the US currency. “We are doing all we can in order to minimize the impact of this decision on our employees and the affected communities,” concluded Mr. Rounsville. Management has informed employees of all affected sites of the company’s decision.

With the first edition of International Forest Industries landing on the desks of the global forestry community early this month, the IFI editorial team has started putting together stories and information for the first edition of the New Year. The launch edition of the magazine included a general overview of current industry issues through the ‘Industry Voice’ feature, as well as more detailed features on the developments and direction of some of the larger players.

In our second edition, we aim to take a closer look at some emerging stories from the industry that are either innovative, entrepreneurial or both as well as covering the news and views from around the world. Our first 2008 issue will also carry extra distribution at the Wood Technology Clinic in Portland, Oregon, in March. Here are some of the stories we’re chasing for the January/February edition of IFI:

•MagIndustries has successfully integrated the fortunes of its individual mining and forestry business through work in the DRC. Editorial Director John Chadwick takes a closer look at how the forestry arm operates

•As the application of biomass increases, Editor Chris Cann reviews the Central European Biomass Conference 2008 in Austria and takes a closer look at a biomass supplier from North America

•Russian forest industries are growing rapidly – a point discussed heavily in our first edition. The Russian Timber Group plans to take its business public in 2008 through the London Stock Exchange. IFI finds looks into the nuts and bolts behind the proposed listing

•Still in Russia, Finnish company Ruukki Group is planning a massive investment into the sawmill, pulp and harvesting businesses of Russia as John Chadwick discovers.

•To complement our distribution at the 2008 Wood technology Clinic, we will collating some of the latest product and application news from the sawmills and sawmill suppliers

Plus, the magazine will provide its regular share of forestry news briefs, fresh product releases, sustainability news, and a whole lot more. The January/February edition of IFI is due for release in early February 2008.

Tembec has successfully started a new tertiary refiner line at its high yield pulp mill in Chetwynd, British Columbia, which it says will increase production by 10,000 air dry metric tonnes/y (ADMT). The capital cost of the project was less than $1 million. Executive Vice President and President of the Pulp Group, Yvon Pelletier: “The increased capacity as a result of this start-up will enable us to meet the growing demand for our product in the marketplace.

“As a global leader in the high yield market pulp sector, we are continually improving our operations to ensure our competitiveness and ability to meet market demands.” Tembec is a large, diversified and integrated forest products company and one of the world’s leading market pulp producers. This optimisation will raise the total capacity of the company to about 2 Mt. Tembec’s operations are principally located in North America and in France.

Indonesia’s climate change credentials have suffered a serious set back after a key player in the country’s illegal logging business was acquitted of criminal charges over the destruction of 58,000 ha of virgin Sumatran forest, according to a report in The Australian newspaper. Businessman Adelin Lis was the subject of an international manhunt and what Sumatran police called the most comprehensive investigation they have conducted into forest destruction. He managed to avoid a 10-year jail sentence and more than 120 billion rupiah ($12.76 million) in fines and reforestation imposts, the report stated.

Judges ruled that evidence against Lis was inadequate to prove anything other than “administrative neglect”. The decision was handed down just as the country prepares for the UN climate change conference in Bali starting next week. “This does irreparable damage to Indonesia’s forest protection credentials,” Rully Syumanda, legal adviser to the peak environment body Walhi, told The Australian. Lis was arrested in Beijing last year after fleeing charges of illegal logging causing damages to the state estimated at Rp230 trillion. The head of forestry firm Majur Timber Group and two related companies, he was charged under anti-corruption laws with failing to pay forestry concession fees and compulsory reforestation funds, the report stated.

On December 11, World Bank Group President Robert B. Zoellick launched a groundbreaking financing mechanism to combat tropical deforestation and climate change. The Forest Carbon Partnership Facility (FCPF) was developed because some forests are more important left standing than cut. It will reduce deforestation and forest degradation by compensating developing countries for carbon dioxide reductions realised by maintaining their forests.

Deforestation and forest degradation together are the second leading cause of global warming, responsible for about 20% of global greenhouse gas emissions, and the main source of national emissions for countries such as Brazil and Indonesia-70% and 80% respectively.  The FCPF will build the capacity of developing countries in tropical and subtropical regions to reduce emissions from deforestation and degradation (REDD) and tap into a future system of positive incentives for REDD.

“This initiative is a practical pilot to expand the tools for Climate Change negotiations,” said Zoellick. “The Forest Carbon Partnership Facility signals that the world cares about the global value of forests and is ready to pay for it. This can change the economic options for many people who depend on the forests for their livelihoods. There is now a value to conserving, not just harvesting the forest.”  Under the FCPF, resources can be used in any new climate change regime negotiated after 2012, when the first commitment period of the Kyoto Protocol ends. The Kyoto Protocol currently does not give carbon finance incentives to developing countries for reducing deforestation and degradation-an issue under discussion at the climate change meetings in Bali, and which may become part of a post-2012 climate change regime.  Initiatives to reduce deforestation and degradation have the potential to provide a fresh source of financing for the sustainable use of forest resources and biodiversity conservation, and a new source of revenue for the more than 1.2 billion people who depend on forests for their livelihoods.  Nine developed countries and an NGO have already made financial commitments to the FCPF totaling $160 million.  “We must not lose another day when it comes to climate and forest protection”, said German Development Minister Heidemarie Wieczorek-Zeul. “I am very pleased that in our capacity as G8 President, Germany was instrumental in helping to develop the FCPF. Germany will contribute $59 million to help developing countries conserve their forests and mitigate climate change. Forest protection must be a central element in a future agreement on climate change.” The other contributors include the UK ($30 million), the Netherlands ($22 million), Australia and Japan ($10 million each), France and Switzerland ($7 million each), Denmark and Finland ($5 million each). In addition The Nature Conservancy, a US based NGO has committed $5 million. “Japan welcomes the launch of FCPF, said Japan’s Senior Vice Minister Otohiko Endo. “We will share our knowledge and expertise gained through bilateral aid in forest management, with FCPF participants.” Bert Koenders, Minister for Development Cooperation of the Kingdom of the Netherlands noted that “Forests carry the future of our planet. The Netherlands government supports the Forest Carbon Partnership Facility because it will protect forests, biodiversity and the interests of the poor.” Most forest-rich countries are among the poorest in the world. The FCPF will support programs targeting the drivers of deforestation and develop concrete activities to reach out to poor people who depend on forests to improve their livelihoods. It will also help developing countries build the technical, regulatory, and sustainable forestry capacity to reduce emissions from deforestation and degradation. The World Bank and FCPF recognise the special role that indigenous peoples and other forest dwellers play in managing and protecting the forests in which they live and on which they depend.  They are given observer status in the FCPF’s governance structure, at the same level as other constituent groups, such as international organizations, non-contributing private sector, and non-governmental organizations.

Zoellick: “The Forest Carbon Partnership Facility will set the stage for a much larger system of positive incentives and financing flows in the future to achieve the sustainable use of forest resources and conservation of biodiversity. Carbon finance provides a key new incentive for doing better by conservation and overcoming poverty in the forest sector. Clearly new funding sources are needed, and the private sector will be critical to raising the money.” Under the terms of the facility, governments will ensure that indigenous peoples dependent on forests, as well as other forest dwellers, will be meaningfully consulted during the drafting of their country’s Readiness Plan and REDD Strategy, and benefit from capacity building. Many developing countries have expressed their interest in participating in the FCPF.  To date, 30 countries from Latin America, Africa and the Asia-Pacific region, have requested an opportunity to participate.

http://www.carbonfinance.org/

One of the world’s largest brands of cut-sheet paper has earned Forest Stewardship Council (FSC) Chain-of-Custody certification from the Rainforest Alliance’s SmartWood program. Xerox Corporation will now be able to purchase and sell FSC-certified paper at 77 distribution centres in 17 countries in North America and Europe – covering the greatest geographic area of any FSC Chain-of-Custody certification to date, a report from the Rainforest Alliance said. “The scale of Xerox’s commitment to FSC certification shows how large corporations are making serious commitments to greening their supply chains,” Rainforest Alliance Executive Director Tensie Whelan said. “Supporting FSC certification helps ensure the conservation of the world’s working forests for generations to come.

“Paper and other wood products that bear the FSC logo originate from forestlands that have met criteria covering the maintenance of high conservation value forests and the protection of soils, waterways, wildlife and the rights and welfare of workers and local communities, the Rainforest Alliance stated. Connecticut-based Xerox had to pass several audits from the Rainforest Alliance at 11 facilities in four countries to verify that the company was complying with the standards of the FSC, the global standard-setter for responsible forest management, and had a system in place for tracking and segregating FSC-certified paper.

Forestry Tasmania’s operating profit had been cut from A$25 million to just over $500,000 in the past four years, the company revealed at Government Business Enterprise hearings last week. Forestry chief executive Bob Gordon blamed the loss on tough trading conditions with a volatile market, a substantial drop in wood sales, and rising contractor costs, according to an ABC report.

He predicted the result would turn around over the next five years, the report said. “As the extra profit from the two major downstream processing Southwood projects at Huon and Smithton come on stream and as the 25% price increase on regrowth logs and the 85% increase in plantation logs come on stream as the pulp mill gets built.” Greens Leader Peg Putt, however, claims the wood supply agreement is not going to prop up Forestry Tasmania in the long-term. “They may have a minor improvement for a few years whilst the last of our precious native forests get trashed,” she said. “But in the long run it’s not going to do them good it’s going to do Gunns a lot more good than Forestry Tasmania and the public purse.”

Ghana’s forest cover has declined by more than 75% since the country gained independence in 1957, according to a report in the Accra Mail.
Ghana’s Forestry Minister, Esther Obeng Dapaah, told the annual general meeting of the Ghana Timber Association that forest cover in the country now stood at below 2 Mha, compared to 8 Mha 50 years ago. Dapaah said that over-logging, by both illegal operators and contracted companies; the expansion of industry; conversion of forest into agricultural land; and other land use changes had driven the decline.

Peru President Alan Garcia has criticized those who question Peru’s active natural resource utilisation, and emphasized the need for Peru to continue its utilisation of such resources, the Tropical Forest Trust reported. President of Peru’s Exporters Association Lumber Committee, Herbert Frey, said exporters in the sector accepted the President’s challenge to better use natural resources, but pointed out that it would only be possible with the active participation of the state, the report stated.

He added that Peruvian exporters were capable of meeting challenges as stated by the President, which would make it possible for Peru to export $3 billion per year in the first five years of implementation, with the possibility of generating $7 billion by 2017. The participation of the state should help design solutions using normative and technical methods to control the resources of the Peruvian Amazon, according to the TFT report.

Timber products maker Gunns has launched a bid to buy the remaining 39 per cent of Auspine it does not already own, according to an AAP report online. The offer is for A$7 per share, representing a 13.8% premium to its previous cash bid for the firm. Auspine managing director Adrian de Bruin, who controls 30.3% of the company’s issued shares, said he intended to accept the unconditional offer.

The payment would be within one month after Auspine shareholders accepted the offer and no later than 21 days after the end of the end of the offer period, the report said. “The acquisition will establish Gunns as Australia’s largest privately held diversified owner and manager of hardwood and softwood forest resources,” Gunns Chief Executive John Gay said. “Not only does it deliver complete control of a valuable plantation resource, it provides a significant beachhead in the mainland market and in a range of softwood structural timber product and fibre offerings to add to our very strong position in hardwood products. “Auspine is already performing above our original expectations and we have a lot of confidence in it.” Gunns said it expected the proposal to result in a range of strategic and financial benefits. These included geographic diversification, softwood and hardwood fibre and sawn timber synergies, improved ability to invest in veneers and engineered wood products, distribution efficiencies and attractive positioning for further expansion, AAP reported. Auspine shareholders would receive Gunns’ formal offer through a bidder’s statement, which was soon to be dispatched to shareholders. The offer was due to close at 7pm on January 18, 2008. The Auspine Target’s Statement and Independent Expert’s Report was expected to be sent to shareholders in December 2007. At 11.51am, Auspine shares were up 16 cents or 2.95 per cent to $5.59, while Gunns’ shares were in a trading halt.