Tag Archives: Hydrowood

Hydrowood update

hydowoodS

The long anticipated Hydrowood project is finally under way on Lake Pieman on Tasmania’s west coast salvaging specialty timbers from flooded hydro dams.

http://www.examiner.com.au/story/3505999/lake-pieman-site-of-australian-first-underwater-logging-video/?cs=95

http://www.abc.net.au/news/2015-11-20/the-hunt-for-sunken-treasure-harvesting-underwater-timber/6957388?WT.ac=statenews_tas

Here is the projects new website.

http://hydrowood.com.au/

I have both hopes and fears for this project in terms of what it could do for the special timbers/blackwood market.

My hopes are that through Hydrowood sales the company will provide much needed special timbers price and market transparency. This is unlikely to happen but I will certainly be encouraging the company management to adopt a commercial/transparent model.

The main driver that will encourage Tasmanian farmers to grow commercial blackwood is if there is much more price and market transparency. Can I get Hydrowood on board?

Ideally I would like to see Hydrowood set aside the very best logs from the salvage operation and every 3-6 months have a major auction.

Let us put 1,000 cubic metres of Tasmania’s finest timbers on the auctioneers table every 3 months and see what the market is prepared to pay!

Let us clearly demonstrate that the forest industry has commercial muscle and is no longer a community service.

Let us use this opportunity to stimulate interest in the real value of quality timber, and growing trees as a profitable investment and primary industry.

The fears are that a) they will flood the market and drive down prices, or b) the ST oligarchy that are currently pushing for World Heritage logging will force the Government to put restrictions on the Hydrowood markets/prices, or c) given the history of the last 40 years that this will turn into yet another Tasmanian forest industry disaster.

Hydrowood estimates they will salvage 80,000 cubic metres of special timbers over the next 3 years, with the possibility of the project lasting another 5 years. This is far more special timbers than has ever been supplied to market before. I would be surprised if the Australian market can absorb this volume of wood. Some of it will have to go to export markets. Perhaps all of it should go to export markets.

Much of this 80,000 cubic metres will be blackwood.

I don’t have a problem with our valuable timbers going for export, especially if they are attracting premium prices and the market is kept informed.

What this huge volume of premium wood will do for the special timbers market and for prices will soon enough become apparent.

The Hydrowood project will definitely have a prolonged and significant impact on the profitability of a number of important Tasmanian businesses. Consequently there will be political repercussions.

So now the Tasmanian special timbers market has four different classes of suppliers:

  1. Forestry Tasmania and its subsidiary Island Specialty Timbers selling taxpayer-subsidised, community service special timbers from public native forests, for which the Tasmanian/Australian taxpayer contributes $80 per cubic metre to subsidise the sawmillers and craftspeople [unprofitable and unsustainable];
  2. Hydrowood supplying salvaged special timbers from Hydro dams, at a cost that reflects the cost of salvage [profitable (??) and unsustainable];
  3. Tasmanian farmers selling salvage special timbers from their farms at a cost that reflects the cost of salvage [profitable and unsustainable];
  4. Tasmanian farmers who are actually growing commercial, sustainable special timbers where the cost of the wood actually reflects the cost of growing, harvesting and replanting the trees [profitable (??) and sustainable]. These poor farmers now have a very difficult market in which to operate and compete. They have absolutely no support from the Government or industry. Do they have any support from the market?

If the State Government goes ahead with logging the Tasmanian Wilderness World Heritage Area there will be a fifth supplier in the special timbers market – taxpayer-subsidised, unprofitable and unsustainable.

If that’s not a buyers dream market I don’t know what is!

How can Tasmania’s special timbers and blackwood industries have any future with this mess of a marketplace?

The only business model for a successful forest industry is profitable tree growing. So where are the profitable tree growers in any of this mess?

Does Tasmania really want a special timbers industry? It sure doesn’t look like it!

Dear reader, please think carefully before making your next special timbers purchase.

It really is a pathetic joke!

But good luck to the Hydrowood team.

It’s a shame we can’t have a profitable, commercial and sustainable special timbers industry in Tasmania, as well as the clean-up and salvage.

HydrowoodBlackwood

Some Hydrowood salvaged blackwood – unique but how valuable is it?

 

 

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Hydro Wood – Landline – ABC

This is just such a great feel-good story, no one could possibly have any problems with salvaging public timber at taxpayers expense. Could they?

Hydrowood Landline

Hydro Wood – Landline – ABC.

Generally I support the project.

And I congratulate SFM Forest Products for getting the project going.

However I do have a few issues that I think warrant consideration.

And the ABC Landline program was screaming these issues at me loud and clear.

1) The complete disconnect from any commercial reality (but we do have a very long tradition of this in the forest industry). Can the market absorb an extra 20,000 cubic metres of specialty timbers per year? How will the wood be sold to market? Tender? Auction? Mates rates? Will these logs be available for export? What impact will this have on current market prices, especially for blackwood, given that private growers will be competing against even more subsidised wood? For heavens sake!! When will the private forest grower ever get a fair deal in Tasmania? When will we stop bastardising the forest industry? When will we stop thinking of the forest industry as a community service and start thinking of it as a business?

2) If the timber resource is so valuable then why the need for a taxpayer subsidy? The forest industry already has a bad track record of squandering vast millions of Government handouts and subsidies. This just sets yet another bad example, and it didn’t need too. This could have been a fully commercial, profitable operation with no taxpayer funding.

Here’s a recent example from New Zealand that provides a much better model for how to deal with the salvage of a public special timbers resource, and this will result in money going to the Government not costing taxpayers. Why can’t we do it this way in Tasmania?

http://www.doc.govt.nz/about-doc/news/media-releases/2014/first-west-coast-timber-salvage-approved/

And this is just the first of what they hope to be many Hydro special timbers salvage operations!! Excuse me while I scream in frustration!!!

There will be very little investment in blackwood in the next few decades whilst the market is flooded with this cheap subsidised wood.

Screw my plans for a blackwood growers cooperative!

Screw existing private blackwood growers whose resource is now worthless!

I think given this is a private company running the Hydrowood project whose goal it is to look after the interests of private forest growers, a bit more thought on the commercial context and planning would have made this project much more agreeable to private blackwood growers.

As it is I think the project is currently detrimental to the interests of private blackwood growers. This needs to change!

Please can’t we do better than this?