Growing the best plank to build on

By PAM GRAHAM

A piece of four by two pine waved around at the annual meeting of forestry and biotechnology company Rubicon may hold the key to dramatically improving forestry returns.

The proposition is that just as the kiwifruit industry can grow a golden fruit, the plantation forestry industry can select, and rapidly propagate, pine trees "fit for purpose".

The piece of four by two came from a tree where the size of the soft juvenile core - wood that is of little value - was so small that every board cut was strong enough to frame houses.

It was developed by Trees & Technology, the former Fletcher Challenge Forests nursery owned by Rubicon and based near Whakatane.

"The size of the juvenile core is the key," said T&T managing director Andrew Rodwell. "It's where value is won or lost."

A slide shown by Rubicon chief executive Luke Moriarty at the meeting compared a log with a core of eight rings of softer juvenile wood from traditional family tree stock and one with three rings from cloned treestock now going to market.

An average tree will start producing stiff wood at age 10; the clone started producing it at age three. Of the 26 boards available from the two logs, the T&T log produced 22 of structural grade, the other log only 11.

For a mill the size of the Fletcher Challenge Kawerau site, this could mean a $25 million annual rise in revenue, said Moriarty.

That diverted shareholders' attention from an interchange between the chief executive and shareholder advocate Bruce Sheppard, who are still at arm's length.

(Last year Sheppard hugged Fletcher Challenge Forests' chairman Sir Dryden Spring.)

Rodwell said forestry was perceived as an unexciting commodity industry but there was also an innovation and growth story. T&T was a customer-focused technology business and a modern growing business, not a commodity business.

Technology driving wood quality could be considered a hard sell at a time when Carter Holt Harvey, the country's largest supplier of framing timber, has admitted it sold wood weaker than the average strength advertised.



Wood varies naturally. T&T asks visitors, including Prime Minister Helen Clark, to walk four planks that bend very differently to make the point.

Combine the natural variability with different forest management practices and different grading techniques and there is plenty to argue about on what affects wood quality.

One school of thought is that processing can engineer properties back into wood. T&T would argue it is better to start with a good tree.

Its scientists talk about trying to get wood quality to drive planting decisions and about the matching of genetics with forest management regimes.

It has researched ways of selecting the best trees, storing tiny plants and embryogenetic tissue material, propagating quickly and examining trees as they grow for characteristics when mature.

The big forest companies around the world all work in the area, which has challenges because pine trees are generally hard to propagate.

T&T provides services to ArborGen, Rubicon's bio-engineering, or genetic modification, operation.

The business that has been around longest is clonal propagation. To the layman this involves selecting trees and growing lots of exact copies.

About 10,000 clones have been tested in the past 15 years and 20,000ha planted in New Zealand.

When trees are about five years old, analysis of wood properties can be done and the qualities of the mature tree predicted.

The best-looking have not always proved to be the strongest and strength has become more of a focus over the years.

Trees suitable for former farmland is one area of potential because of the number of farm forests.

But, equally, as the best sites for forests become uneconomic because of high land values, work is going into finding trees that can perform on land marginal for forestry.

Disease resistance, and low incidence of twists and checking, or holes, are also desirable properties.

A T&T tree stock can sell for as much as $1 compared with 20c for a traditional seedling. It takes about 10 years to develop a clone and the lead time from committing to commercial scale and achieving it is about three years.

T&T produces 12 million treestocks a year, of which three million are clones represented by about 15 individuals.

T&T, which reported earnings before interest tax and depreciation of $1.3 million last year, typically has a strategic relationship agreement with clients, which include Fletcher Challenge Forests and Timber Management Company, manager of the former Central North Island Forest Partnership estate.

It expects to expand in Australia soon and is eyeing Chile.

Some forest owners say they are unlikely to plant whole forests of one clone for reasons of biodiversity and because it is so hard to predict market trends for wood by harvest time.

T&T estimates its clones planted on a good-quality site with a clearwood regime can produce returns of $2617 a hectare compared with an expected return of $1252 a hectare without clones.