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Media coverage of the impacts of the recessions on woodchipping industry
Eden Magnet 16/04/2009 Chip mill closes for three weeks
ABC Radio National Breakfast 9 April 2009 Timber shutdown
The Australian April 11, 2009 Timber men take time off to stay at work
Nippon Paper Group, Inc March 25, 2009 Nippon Paper Group to Shut Paper Machines to Curtail 880,000 tons
The Advocate 7/03/2009 Talks on mills leaves Coastal workers no wiser
ABC News Gunns cautious about future woodchip operations Jan 27, 2009
ABC News Portland Credit crunch takes toll on blue gum harvest The Warnambool Standard The Chips are down: Industry feels the Blues 28/01/2009
Associated Press, 12.31.08 Forest and paper products firms struggled in '08
The Australian November 03, 2008 PM told 'act now or see timber jobs axed'
Eden Magnet
Chip mill closes for three weeks
http://eden.yourguide.com.au/news/local/news/general/chip-mill-closes-for-three-weeks/1488177.aspx16/04/2009 11:24:00 AM
South East Fibre Exports has shut down its Eden chip mill for three weeks with its 80 employees taking paid leave until it reopens on Monday, April 27.
Corporate affairs manager Vince Phillips said that some 300 other people outside the mill including logging contractors would also be affected.
We are having a couple of weeks annual leave in line with our shipping schedules, Mr Phillips said.
We have a full stock and no room to put any more.
He said the chip mill had two ships coming in, one in late April and one in early May, and operations then would return to normal.
Mr Phillips said that chip mill staff had been advised late last year of the possibility of the Easter shutdown and this had been confirmed to employees in February.
It is a bit unusual for us to be taking leave at this time but 2009 is not a usual year, he said.
We are trying to manage it as best we can.
Mr Phillips said that SEFE hoped to able to maintain a reasonably normal program for the rest of the year but there was a possibility that workers may have to take some more leave later in the year.
He said that a lot of other timber mills around Australia were also shutting down for varying periods.
Construction, Forestry, Mining and Energy Union forestry secretary Craig Smith said that the CFMEU had been in discussions with SEFE concerning a weakened demand for its product from Japan.
The position they put to us was pretty frightening in terms of the parent company Nippon Paper having to shut down pulp and paper plants in Japan, he said.
Mr Smith said his understanding was that five or more plants there had significantly reduced production or been mothballed.
This in turn was having a significant effect on raw materials suppliers. We could not continue to stockpile chips at the site given the downturn in demand for them, he said.
Mr Smith said that while the union did not like to have to use employees paid leave entitlements in this way it was better than the alternative of redundancies or reduced working weeks.
We are trying to do as much as we can working with employers to save jobs, he said, and this was a position supported by the majority of his members.
Mr Smith said that the sawmill at Tumut was also shutdown at present and there were concerns for the future of other forestry product users in NSW.
The union was confident there would eventually be a ramping up of production in Japan that would flow on to increased production locally, he said.
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The Australian Timber men take time off to stay at work
Lauren Wilson | April 11, 2009
http://www.theaustralian.news.com.au/story/0,25197,25318943-5013871,00.htmlTHE nation's forestry workers could be forced to take another round of leave over the coming months to try to prevent widespread redundancies in the wake of the global recession.
Tens of thousands of forestry workers have brought forward their Christmas holiday entitlements, turning this Easter break into a 10-day industry-wide holiday, in an arrangement negotiated between timber companies and the Construction Forestry Mining and Energy Union.
CFMEU forestry division secretary Michael O'Connor told The Weekend Australian that in negotiations held late this week the union said it would consider another round of extended leave before June 30. "We spoke to some companies, some large companies, about taking extra leave before the end of the financial year," Mr O'Connor said. "We're still in discussions, but there might be attempts to try to bring forward more leave."
The union leader said the CFMEU and the timber companies were co-operating to an unprecedented level to try to protect as many jobs as possible as the industry feels the pinch of the global recession.
He said the forestry industry had learned from the last financial downturn that it was important to protect its skill base so business could grow with the recovery of the economy.
"People are being open and frank, we're having constructive dialogue," he said.
"This is a problem that has to be shared. Most workers understand that maintaining employment is critical, and most employers understand that maintaining their skill base is critical." Mr O'Connor said open and constructive negotiations between the unions and the timber industry were particularly important in regional areas.
"We have a number of mills which are the major employers in a country town, and rural economies are not as diverse and robust and in a recession they can be hit harder and longer," he said.
The forestry industry employs about 100,000 workers nationwide, with the biggest concentrations of in Tasmania, NSW and Victoria.
The forestry employment pact follows recent attempts in the embattled car industry to avoid loss of skilled jobs through sharing less working hours.
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Timber shutdown - Radio National Breakfast - 9 April 2009http://www.abc.net.au/rn/breakfast/stories/2009/2539125.htm
It's already happened in the car industry. Now, much of Australia's timber and forestry industry will reduce output as a means of surviving the economic downturn.
Over the next ten days, timber workers across the country will take an extended Easter holiday, with management and unions agreeing to a reduction in workload to help save jobs.
http://www.np-g.com/contents/000194178.pdfNippon Paper Media Statement March 25, 2009
Nippon Paper Group, Inc.
Representative: Yoshio Haga, President Stock Code: 3893 First Section TSE, OSE & NSENippon Paper Group to Shut Paper Machines to Curtail 880,000 tons
Nippon Paper Group, Inc. announces that it will shut 15 paper and paperboard machines in response to the recent sharp decline in demand. The Group has been compelled to operate below capacity to meet demand decrease, however, it has decided to consolidate its production at more efficient machines to raise the operating rates.
In addition, the Group will cease all paper machine operation during the regular maintenance period of boilers and pulp machines. This will also help curtail production capacity.
As a result of these actions, the Nippon Paper Group expects to reduce its annual total paper and paperboard production capacity by around 880,000 metric tons. Details are as follows:
List of production facilities to be shut (15 machines in total: 14 for paper and 1 for paperboard)
SiteFacilityCapacity
(in thousands of metric tons per year)Products
[Paper]
Nippon Paper Industries Co., Ltd. Yufutsu Mill No.1 Paper machine
& No.1 Coater59 Coated paper
Ditto Iwakuni Mill No.5 Paper machine
& No.3 Coater83 Coated paper
Nippon Daishowa Paperboard Co., Ltd. Otake Mill No.7 Paper machine & No.1 Coater 80 Coated paper
Nippon Paper Industries Co., Ltd. Ishinomaki Mill No.2 Paper machine 24 Fine paper
Ditto Ditto No.6 Paper machine 44 Mechanical paper
Ditto Fuji Mill F7 Paper machine 27 Fine and mechanical paper
Ditto Nakoso MillNo.1 Paper machine 44 Business communication paper
Ditto Iwakuni Mill No.3 Paper machine 26 Business communication paper
Ditto Fuji Mill S2 Paper machine 15 Industrial paper
Ditto Ditto S3 Paper machine 10 Industrial paper
Ditto Ditto S4 Paper machine 30 Industrial paper
Subtotal:442
Additional capacity curtailment by ceasing operation during the regular maintenance period of boilers and pulp machines:300 At all mills
Paper Total:742
[Paperboard]
Nippon Daishowa Paperboard Co., Ltd. Soka Mill No.1 Paperboard machine 133 Linerboard and corrugated medium
Paper and Paperboard Total:875
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Talks on mills leaves Coastal workers no wiser – the Advocate7/03/2009 1:00:00 AM
A MEETING between Australian Paper management, federal politicians and North-West local government figures has done little to clarify the future of the 500 jobs at stake at the Wesley Vale and Burnie mills.
The federal Minister for Innovation, Industry, Science and Research, Kim Carr, joined federal Member for Braddon Sid Sidebottom, five Coastal mayors and union officials at the meeting with the company in Melbourne yesterday.
Mr Sidebottom said the meeting had been very informative and had discussed options to assist the viability of the two sites, which are currently under review by parent company Paperlinx.
"The company set out the scope of the current review and elaborated on some of the alternatives available to them," Mr Sidebottom said.
CFMEU secretary Alex Millar said while the meeting was in part "a talk fest" there was some good discussion about the options open to Paperlinx.
"It was important the government clearly understood the situation in regards to the mills," he said.
He said workers at the mills needed to be given some certainty.
"They do need to know what the future has in store for them, whether its good news or bad news."
Mr Millar said Senator Carr's proposal for a new pulp and paper industry strategy group to review the future of the industry was a good start but there was no easy fix.
Liberal Senator Richard Colbeck said the course of action proposed was too little, too late.
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The Australian November 03, 2008
PM told 'act now or see timber jobs axed'Matthew Franklin and David Uren |
THE powerful union representing forestry workers wants Kevin Rudd to legislate a job-protection package for the timber industry, warning that the global financial crisis is about to spark job losses on a scale not seen in a generation.
Michael O'Connor, the forestry division chief of the Construction Forestry Mining and Energy Union, criticised the Prime Minister for paying scant attention to the human cost of the downturn.
Mr O'Connor told The Australian that forward orders placed with timber millers were plummeting and that the Government must craft an industry plan similar to that which protects jobs and promotes growth in the car industry. It could use mechanisms such as grants and tax breaks for new investment to protect jobs and boost value adding, allowing the local industry to see off the threat of cheaper imports, he said.
Mr O'Connor's warning came as the Australian Industry Group released a survey revealing that 40 per cent of employers expect to cut jobs because of the financial crisis.
And AIG and the Australian Chamber of Commerce and Industry used recession fears to urge Mr Rudd to ensure soon-to-be-produced industrial relations reforms allowed employers to retain enough flexibility to deal with the economic meltdown.
Mr O'Connor gained national prominence in 2004 when he and his union turned against the Mark Latham-led Labor Party over its promise to lock up large parts of the Tasmanian forests.
Labor later buried the policy, with Mr Rudd continuing the pro-job policies of the Howard government.
But yesterday Mr O'Connor said the global turmoil had changed the employment outlook, casting such a threat over 125,000 forest industry jobs that the Government had to act.
Warning that his union was deeply alarmed, Mr O'Connor said that after talking to timber companies, he felt a recession was likely.
"It's like someone slamming on the brakes," he said. "We have suffered mill closures in five states in the last few months.
"We need to be doing a lot more to ensure that we are value-adding our resource to maximise not just the value the country is getting out of it but also to maximise employment."
He said other industries would suffer similar downturns and that Mr Rudd must provide leadership on jobs.
"A whole heap of blue gum resource is about to come on stream supported by taxpayers through managed investment schemes," he said.
"There is increasing possibility that resources will go offshore, exported in woodchips rather than being value-added here in this country."
The industry faced competition with imports that were unsustainably or even illegally logged while Australia was encouraging the preservation of equatorial rainforests as carbon sinks.
Mr O'Connor called for the Government to focus on facilitating the Gunns pulp mill in Tasmania's Bell Bay - which was last week placed on hold because of the downturn - as well as at least one more pulp mill on the mainland because the jobs such projects involved would "fire-proof" large parts of the economy.
While he stopped short of calling for trade barriers against timber product imports, Mr O'Connor said the economic turmoil highlighted the need to lift Australia's ability to export or to at least replace imports. "We can't continue to be in the position where we are basically importing so much material, so much goods, and not making things that people wish to buy."
Mr Rudd refused to comment yesterday.
The AIG survey suggests unemployment will rise rapidly over coming months, with staff cuts being considered by nearly 40 per cent of businesses as they grapple with the financial crisis.
The AIG surveyed its members about fallout from the crisis and found that a quarter of businesses were facing a serious disruption, while a further 36 per cent were experiencing some negative effects.
Staff cuts and cost reductions are the highest business priorities, while a quarter of firms are scrapping investment plans and lowering their production. While 38 per cent are already cutting staff, 53 per cent say employment prospects in their industry have deteriorated.Gunns cautious about future woodchip operations
http://www.abc.net.au/news/stories/2009/01/27/2474875.htm?section=australia
Posted Tue Jan 27, 2009 9:24am AEDT
Updated Tue Jan 27, 2009 12:59pm AEDT
Gunns says it has been hit hard by a decrease in demand for woodchips from Japan. (ABC News)
Tasmanian-based timber company Gunns says it will re-evaluate its woodchip operations across Western Victoria in a month because of a decrease in demand for its product.
Gunns has tens of thousands of hectares of pine plantations across western Victoria and on the eastern edge of South Australia.
It also has a woodchip export facility at the Port of Portland.
The chief executive of Gunns Timber Products, Greg L'Estrange, says it has been hit hard by a decrease in demand for woodchips from Japan.
He says Gunns is worried about the short-term impact on its business.
"We haven't scaled back or stopped any of our processes but as we go through the next month or so we'll have a firmer view on what the demand for the product is looking like and we'll have to adjust our operations accordingly," he said.
"We'd have to look at how we would minimise the impact and we need to work out how we do that with a long-term view understanding that there will be some short-term difficulties."
The timber company Gunns says it has no plans to re-evaluate its woodchip and timber operations in Tasmania.
A Gunns spokesman says operations in Tasmania have not been affected and the company is yet to assess the full impact of the global economic downturn.
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ABC News Portland Credit crunch takes toll on blue gum harvest
Posted http://www.abc.net.au/news/stories/2009/01/27/2475353.htmMost of Victoria's blue gum timber harvest is likely to be delayed because of the economic downturn.
The blue gum harvest in south west Victoria was set to begin in earnest this year, but experts now think that won't be possible.
Woodchips are piling up at the Port of Portland because $16 million worth of orders bound for Japan have been cancelled.
The Port is also struggling to secure finance to build a new loading facility for the blue gum timber.
Dr John Kellas, from the Regional Plantation Committee, says any delays in building the facility will affect woodchip exports.
"Industry seems to believe the facilities at Portland won't be finalised until probably now 2010, that will simply delay the harvest," he said.
"That will also have downstream effects with delaying employment and purchase of equipment, trucks, harvesting machines and other infrastructure as well."
The Port says it is confident of securing the finance it needs and remains committed to the project.
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The Warnambool Standard THE CHIPS ARE DOWN: Industry feels the blues
http://www.standard.net.au/news/local/news/general/the-chips-are-down-industry-feels-the-blues/1417610.aspx?storypage=1
BY JARED LYNCH
28/01/2009 4:00:00 AM
THE south-west's bluegum plantations have been dealt a blow by the world economic downturn.
Japan, Australia's largest woodchip export market, has curbed its demand for timber pulp, resulting in a fall in exports from the Port of Portland.
Four woodchip shipments worth about $16 million have been cancelled since November, the port's management revealed yesterday. Western Victoria MP John Vogels said he feared the slowdown would lead to thousands of hectares of bluegums across the region being left to rot.
Timber companies yesterday told The Standard the plantations were still valuable.
"What we are experiencing is a short-term glitch," Great Southern forestry processing and marketing manager Tony Price said.
"There has been a softening in the market but we are not spooked by it. It's a fact of business . . . You just have to ride out the humps and bumps."
Mr Price said the fall in Japan's market would delay Great Southern's harvest in the south-west from mid-2009 until early 2010.
South West Coast MP Denis Napthine said he was confident the bluegum industry would rebound and deliver the hundreds of jobs it promised.
"The great thing about blue gums is they can retain their value in the long term," he said.
"They are still in the ground and can be still harvested at a more convenient time in the future."
Mr Vogels said if demand for south-west woodchips continued to fall, plantations could turn into wastelands, become fire hazards and harbour weeds and vermin.
He likened the situation to one that occurred in the 1960s and '70s involving small pine plantations.
"Just about every school used to have a pine plantation which they were told would turn into money," Mr Vogels said.
"Some of the early ones did but with the later ones, you couldn't even give them away.
"The big companies weren't interested in them.
"They weren't maintained and they just became a mess, with the wood no good to anyone."
Mr Vogels said the biggest problem was not knowing how long the world financial crisis would last or if it would get worse.
"At the moment we are flying on a wing and a prayer," he said.
While Wannon MP David Hawker said a delay in blue gum harvesting would hamper the region's economy, he was confident the trees would not rot.
"That's the beauty of a renewable resource. If you can't harvest them one year you could always do it the next," he said.
Port of Portland chief executive officer Scott Paterson said he was bracing himself for a difficult year.
A five per cent production cut at Portland's smelter and drought drying up grain supplies meant a decline in exports through the port, he said.
"But we are confident the blue gum story in the region will remain positive," he said.
"We have been told that the Japanese may stop using native hardwood chip and source more plantation chip, which would be good for us."
The port is in the final stage of a new hardwood chip export facility which, when fully functional, will bring in $250 million a year.
"We are seeking finance for the project at the moment, which in the current climate might be a bit of a struggle, but we are confident we can get the funds to build it," Mr Paterson said.
Tasmanian-based timber company Gunns, which has a woodchip export facility at Portland, and south-west plantation owner Timbercorp maintained there was still a demand for their products and business was operating normally.
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Associated Press Forest and paper products firms struggled in '08
http://www.forbes.com/feeds/ap/2008/12/31/ap5870777.htmlBy MIKE OBEL , 12.31.08, 10:24 AM EST
Lumber and paper products companies faced two challenges in 2008, soaring energy costs in the first half, and sinking demand for their products in the second, which sent shares tumbling for the year.
From January through July, a surge in the price of oil to a peak of nearly $147 per barrel, which raised shipping costs, and a spike in the price of natural gas, which is used to power mills, cut into profits.
Since then, crude oil has retreated below $40 per barrel and natural gas prices have fallen by about 60 percent, but the industry faced another challenge as demand for forest and paper products collapsed under the weight of a deepening global credit crisis and ensuing recession.
Share prices tumbled an average of 66.2 percent among companies that produce everything from plywood to paper, according to the Dow Jones U.S. Forestry & Paper index. By comparison, the Dow Jones Total Market index fell 40 percent while the Standard & Poor's 500 index lost 39 percent.
"It was a very challenging year," said Longbow Research analyst Joshua Zaret speaking about the lumber end of the industry. "It started off with extreme headwinds from higher input costs which led to the industry raising prices. And just when it appeared they were likely to realize benefits from higher prices the world went into a steep recession and volumes fell off a cliff, causing earnings to fall and stock prices to plummet."
The difficulty extended across the forest and paper products industry. In October, newsprint demand in North America had fallen by nearly 20 percent, year over year, according to Kimberly Nolandof of Gimme Credit, as retailers shifted advertising spending to the Internet from newspapers. Demand for printing and writing paper also slid, hammering shares of newsprint makers like Delaware-based AbititiBowater Inc., which fell nearly 98 percent.
By November, demand for containerboard, a paper product used to make cardboard also waned, dropping 8.6 percent year-over-year - only the third time in the last 35 years that demand dropped so dramatically, according to UBS analyst Gail Glazerman said. Shares of Memphis, Tenn.-based International Paper Co., a top North America corrugated packaging maker, fell 63 percent.
Meanwhile, demand for two-by-fours and other construction lumber dried up as the U.S. housing market contracted. In December the Commerce Department said November housing starts were the lowest since it began keeping records in 1959. Shares of timberlands and wood products maker Weyerhaeuser Co., of Federal Way, Wash., declined 59 percent in 2008.
Business could be challenging for companies in the sector for a while. Standard & Poor's expects the U.S. housing market to begin recovering in 2010, and then only gradually.
"It doesn't matter whether a company is focused on wood products or paper products: The new year is going to be extremely difficult from both a volume and a pricing perspective," Zaret said. "There will be some cost relief, although it is unlikely to be great enough to offset the penalty from falling prices and demand."