THOUSANDS of investors in the collapsed Forestry Enterprises Australia will be hoping to recoup some of the $400 million they poured into the business over several years as investment bank Gresham and receiver Deloitte officially place the plantation owner on the market today. A sale of FEA’s 97,900 hectares of hardwood forests and 46,000ha of land across Australia, flagged by The Australian on Friday, is likely to reap at least $200m collectively for Deloitte, working on behalf of financiers.
Corporate manslaughter legislation is unlikely, Prime Minister John Key says, just days after the year’s forestry death toll climbed to nine.
The national concern over forestry worker safety was highlighted when one of New Zealand’s largest forest owners, Hancock Forest Management, called a meeting with workers yesterday to discuss health and safety, admitting “our safety system is broken”.
In addition to the nine deaths, 90 people have been badly hurt in forestry accidents this year.
Justice Minister Judith Collins has been considering the introduction of a corporate manslaughter charge as recommended by the Independent Taskforce on Workplace Health and Safety in its report issued earlier this year.
Mr Key said yesterday it was off the table.
Instead, forest managers had to take more responsibility and the Government was putting more onus on them through inspections carried out by the Ministry of Business, Innovation and Employment, he said.
But a spokesman for Ms Collins said yesterday that she was still investigating the charge and awaiting advice on corporate liability and how those matters might be handled.
Mr Key denied the forestry sector was “an industry in crisis”, ruling out a government inquiry, but he admitted concern. “I think in my view it’s an industry that needs to be taking workplace more seriously and they clearly need to change and we are trying to enforce that change.”
Of the 150 cable-logging operators visited as part of the audits so far, inspectors have issued 182 enforcement notices and shut down 14 operations because of imminent danger of injury or death. Soutrce TVNZ news
Stora Enso’s Biomaterials Division will invest approximately Euro 13.5 million to increase use of renewable energy at Enocell pulp mill in Finland, The investment in renewable energy will enable about 85% of the fuel oil used in its lime kiln to be replaced by sawdust. The investment is expected to reduce the mill’s annual fossil-based carbon dioxide emissions by 30,000 tonnes and energy costs by Euro 5 million. The changes required to the mill processes will be made during 2014.
“We want to make the mill’s energy balance more environmentally friendly. The pulp mill is more than self-sufficient in energy, but purchased fuel is still needed for the lime kiln. Through the investment Enocell mill is taking a significant step towards being a mill free of fossil fuels,” says Mill Manager Sauli Purho. Most of the sawdust used will be supplied by Stora Enso’s nearby Uimaharju and Kitee sawmills.
Enocell pulp mill’s production capacity is 450 000 tons bleached softwood and hardwood pulp and dissolving pulp per year. Enocell pulp mill produces softwood pulp from pine and spruce and dissolving pulp from birch.
Proteak Uno, S.A.B. de C.V., ordered an MDF plant from Dieffenbacher in November 2013. The plant is designed for a capacity of 600 m2 per day and will be constructed near Huimanguillo in the state of Tabasco, Mexico. Proteak will use the plant to process eucalyptus wood from its own plantations. The plant start-up is planned for the summer of 2015. This order marks the 14th major order received by Dieffenbacher in 2013.
The full scope of supply includes everything from chipping the logs to finishing and packing. Glue production, a Dieffenbacher energy system and a short-cycle press line are also part of the complete order. The new EVOjet M dry resin blending system, with a fiber throughput of 25 tons per hour, will be used for the gluing. The energy system is fueled with wood waste and has an output of 25 MW. It is supplemented with a gas turbine with an output of 9 MWel, the waste heat from which is also fed to the MDF plant
Proteak wood comes from sustainable forestry and is FSC Certified:
The company has over 18,000 ha of teak and eucalyptus plantations in Mexico, Costa Rica and Colombia, making it the largest forestry plantation operator in Mexico and Central America. The company is listed on the stock exchange and exports its production to over 15 countries in America, Europe and Asia.
. The MDF plant will be Proteak’s first large-scale industrial plant for wood-based products. The wood for the MDF boards comes from recently acquired, sustainably managed eucalyptus plantations. Unlike teak, which is only ready to harvest after 20 to 25 years, eucalyptus is fast-growing and can be harvested after just 6 years. This is currently the largest forestry and timber project in Mexico and Proteak will be creating around 500 jobs in Tabasco as a result.
The wood costs for pulp and lumber manufacturers in the two largest producing countries in Latin America - Brazil and Chile - have fallen during much of 2012 and 2013, and in the second quarter of 2013 at the lowest levels in over two years, according to the Wood Resource Quarterly (WRQ). The two countries currently have some of the lowest wood raw-material costs in the world, and since these costs account for 55-65% of the production costs when manufacturing pulp and lumber, it makes the industry quite competitive in the export market.
In Brazil, prices for both sawlogs and pulplogs have come down substantially in US dollar terms the past few years. The average pine sawlog price is currently over 20% below the record high levels reached in 2011. This sharp price decline is more a reflection of a weakening Brazilian Real than any dramatic price changes in the local currency. The current sawlog costs, which were about 30% below the global sawlog index GSPI, makes Brazilian sawmills very competitive. Although Brazil is a minor player in the global lumber export market, the country has expanded sales to the US, which is by far the largest consumer of Brazilian softwood lumber, this year, with shipments in the 3Q/13 reaching their highest levels in over two years.
Prices for pulpwood in Brazil have followed a similar trend to those of sawlogs, with sharp declines in US dollar terms but only modest declines in the Brazilian Real the past year. Current pulplog price levels have not been seen in almost five years, and the Brazilian pulp industry has become much more competitive compared to a few years ago.
Prices for pine sawlogs in Chile have been surprisingly stable in 2012 and 2013 despite higher log demand from sawmills the past year both because of a stronger domestic market and increased exports. Chile is about the tenth largest exporter of softwood lumber in the world and shipments to China, Japan and the US were all up the first half of 2013 as compared to the same period in 2012.
Pulplog prices in Chile have also fallen, with the 2Q/13 prices being about eight percent lower than in the 2Q/12. The average cost for Eucalyptus fiber in Chile is currently the lowest in all countries tracked by WRQ, making the country’s pulp mills some of the world’s lowest cost producers of hardwood market pulp.
MeadWestvaco Corporation recently announced that it has reached a definitive agreement with Plum Creek Timber Company, Inc. whereby Plum Creek will acquire all of MWV’s U.S. forestlands.The total consideration of the transaction is approximately $1.1 billion.
The aggregate value of the transaction, including both parties’ investments in a new partnership, is approximately $1.5 billion.
MWV intends to return approximately $665 million of the proceeds from the transaction to its shareholders.
“This transaction delivers on all of our objectives - it enables us to maximize the value of our land holdings in a tax-efficient manner, while retaining the substantial upside potential of the attractive real estate opportunities in the growing Charleston market. At the same time, we are maintaining a secure source of fiber for our mills,” said John A. Luke, Jr., chairman and CEO, MWV.
“Plum Creek is an outstanding company that shares our commitment to both sustainably managing forests and forging lasting community partnerships in real estate development. As a strong company with deep expertise in land management and development, Plum Creek is the ideal partner for MWV as we move forward with the high-return real estate entitlement and community development opportunities we have in Charleston.”
Under the terms of the agreement, Plum Creek will acquire all of MWV’s U.S. forestlands and certain related assets, comprising approximately 501,000 acres in Alabama, Georgia, South Carolina, Virginia and West Virginia, for $934 million, of which approximately $74 million will be in cash and $860 million will be in the form of a 10-year installment note from Plum Creek that MWV intends to securitize or otherwise finance after closing. Also included in the transaction is the royalty and lease income currently being generated on these lands from coal and wind.
MWV will retain full ownership of its oil and natural gas rights on approximately 191,000 acres of land in West Virginia that are located over the Marcellus Shale fairway.
As part of the transaction, MWV and Plum Creek will execute 25-year fiber supply agreements covering forestlands in Virginia and West Virginia to ensure an uninterrupted supply of high-quality fiber to MWV’s Covington, Va., paperboard mill. The fiber will be sold at market price.