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Overseas Opportunities for Australian Forestry Sector

Overseas Opportunities for Australian Forestry Sector. ABARE Outlook Conference March 4 2008. Topics. Australian forest industry’s current overseas business Regional forest products demand/supply issues Australian industry growth Overseas opportunities Conclusions.

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Overseas Opportunities for Australian Forestry Sector

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  1. Overseas Opportunities for Australian Forestry Sector ABARE Outlook Conference March 4 2008 ABARE Outlook Conference

  2. Topics • Australian forest industry’s current overseas business • Regional forest products demand/supply issues • Australian industry growth • Overseas opportunities • Conclusions ABARE Outlook Conference

  3. Australian forest industry’s current overseas business 300 Manufactured wood exports by country 2006 - 2007 250 Paper and paperboard 200 Wood based panels Sawnwood '000 m3 kt (paper product 150 100 50 0 Rep. of China Taiwan Hong Kong Japan Malaysia New Zealand Korea ABARE Outlook Conference

  4. Australian forest industry’s current overseas business Wood product export trend from 1995 - 2007 8000 6000 '000 m3 kt (paper product Woodchips 4000 Paper and paperboard Wood based panels Sawnwood 2000 2006-07 0 1997-98 1995-96 1999-00 2001-02 2003-04 2005-06 ABARE Outlook Conference

  5. Regional forest products demand/supply issues • Regional markets - globally strongest growth • Product innovation – big role for RCP and (hardwood) pulpwood grades. • Regional fibre supplies are constrained • Embodied energy values of wood (and biomass) are increasing ABARE Outlook Conference

  6. Regional markets’ strong growth 5 E. Europe & Russia China 4 Rest of Asia Africa 3 LatinAmerica Average 2.0%/a 2 Oceania 1 WesternEurope North America 0 Japan -1 0 20 40 60 80 100 Pulp fibre demand growth 2005 - 2020 %/a Share of consumption mid decade % ABARE Outlook Conference

  7. RCP and hardwood fibres have strongest growth Million tons/a 600 World Consumption of Papermaking Fibre 1980-2020 Forecast 400 Recovered paper Non-wood 200 Hardwood Softwood dominated grades 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 ABARE Outlook Conference

  8. Growing Russian log export duties • April 2008 step appears likely • Creates East Asian market opportunities * ABARE Outlook Conference

  9. Regional log imports are evolving Chinese Log Imports – 2007 Source ITTO 08-07 • Russia is Asia’s major source for fibre • China doesn’t have incremental domestic sources available ABARE Outlook Conference

  10. Australian forest industry’s major growth through 2010 • Immediate term growth - plantation hardwood chip volumes • Post 2010 announced new/expanded pulpmill projects will become operational based on current timetables • Gunns’ greenfield Tasmanian BHKP mill +/- 900 000 ADt/a • Visy Tumut new kraftliner line +/- 350,000 Mt/a • Protavia new BCTMP line +/- 750, 000 ADt/a • Softwood log, lumber and panel exports ABARE Outlook Conference

  11. Export woodchip potential Million BDt 9 OUTLOOK South Korea Net surplus potential Taiwan Indonesia 7 Japan China 5 3 1 2007e 2002 2004 2006 1992 1994 1996 1998 2000 2016f 2011f ABARE Outlook Conference

  12. Woodchip export opportunities • Indonesian MTH supply constraints • Europeans tapping South African and Latin American sources • Strong markets to meet tightening supply/demand ABARE Outlook Conference

  13. Softwood • Potentially good markets for export accessible sources • Increasing Russian taxes and uncertainty – traders looking for alternative supplies ABARE Outlook Conference

  14. Biomass • Accessible biomass sources will increasingly be tapped in the search for renewable energy sources • Australia is remote from mainly European markets - but could benefit from knock-on effect. ABARE Outlook Conference

  15. Conclusions • Strong demand and limited supply in Asian markets • Opportunities across a range of products • Uncertainty on Russian taxes will be resolved – outcome will drive more or less opportunity for Australian exports ABARE Outlook Conference

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