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SCION ANNUAL REPORT 2013 HIGHLIGHTS

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Scion49 Sala Street, Private Bag 3020Rotorua 3046New Zealandwww.scionresearch.com

September 2013© 2013 New Zealand Forest Research Institute Limited trading as Scion

ISSN 1177-1763 (print version)ISSN 1178-5276 (online version)

SCION ANNUAL REPORT 2013

Our Annual Report is presented in two parts – Highlights (Part A) and Reports and Financial Statements (Part B). Together both documents fulfil our annual reporting responsibilities under the Crown Research Institutes Act 1992.

The Reports and Financial Statements (Part B) includes the employment and environmental reports, core funding investment, directors’ report, performance targets and financial statements. Cover image: Pinus radiata seeds

Scion’s purpose is to drive innovation and growth from New Zealand’s forestry, wood product and wood-derived materials and other biomaterial sectors, to create economic value and contribute to beneficial environmental and social outcomes for New Zealand.

PROSPERITY FROM TREESMAI I TE NGAHERE ORANGA

OUR VISION

05 FROM THE CHAIRMAN AND CHIEF EXECUTIVE

09 RESEARCH PERFORMANCE

11 COMMERCIAL FORESTRY

17 SOLID WOOD PROCESSING

21 WOOD FIBRE, PULP, PACKAGING, BIOPOLYMERS AND BIOCHEMICALS

27 RISK AND ADAPTATION

33 LICENCE TO OPERATE

37 BIOENERGY AND ENERGY SECURITY

38 OUR COMMUNITIES

43 SCIENCE OUTREACH

46 OUR PEOPLE

48 FINANCIAL RESULTS SUMMARY

CONTENTS

SCION AT A GLANCE

REVENUE

LAST YEAR: $44.1m

$45.5m

TOTAL COMPREHENSIVE INCOME

LAST YEAR: $1.6m

$1.7m

RETURN ON EQUITY

LAST YEAR: 6.0%

5.8% ROTORUA274

02WELLINGTON

CHRISTCHURCH21

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298 FULL-TIME EQUIVALENT STAFF

THE NEW ZEALAND FOREST INDUSTRY

• New Zealand’s third largest exporter.

• Total export earnings were $4.7 billion (year ended December 2011).

• The available volume of wood harvested from planted forests has the potential to increase from 26 to 35 million cubic metres per year by 2023.

• The target is to increase exports to $12 billion by 2022 (from the “New Zealand Forest and Wood Products Industry Strategic Action Plan”).

04 SCION ANNUAL REPORT 2013

Our achievements are making an important

contribution to the forest and wood products

industries’ goals

HIGHLIGHTS 05

FROM THE CHAIRMAN AND CHIEF EXECUTIVE

New Zealand’s forest industry has enjoyed a positive year, with export earnings provisionally up 7 per cent to June 2013 compared to the previous year, and the national log harvest expected to exceed a record 26 million cubic metres.

TONY NOWELL, CHAIR

WARREN PARKER, CHIEF EXECUTIVE

Our successes over the past year, aimed at increasing the value and productivity of forestry, wood and biomaterial manufacturing, are game changing. During the year we have been:

• Defining how remote sensing technology can contribute to the goal of doubling the productivity of planted forests by enabling precision forestry.

• Developing and using the Woodscape study for the New Zealand Wood Council so it can evaluate new and existing wood processing technologies and highlight investment options for the sector.

• Working with the Radiata Pine Breeding Company Ltd to improve radiata pine breeding stock and commenced identification of the genetic structure of Pinus radiata DNA.

• Refining wood modification technologies to make higher value products from radiata pine.

• Working with Solid Wood Innovation to improve log processing yields through the use of segregation technologies.

Another important milestone was the successful development of a Primary Growth Partnership (PGP) investment proposal, ‘Stump to Pump’, with Norske Skög and Z Energy which may see the commercial production of renewable biofuel products using forest biomass. Scion will provide research and technology support for initial feasibility assessments.

In addition to its strong forest industry focus, Scion is also dedicated to increasing the benefit to New Zealand from forest ecosystem services and improved environmental sustainability.

Domestic wood processors have significantly increased production to meet rising market demand, mostly driven by the Christchurch rebuild and population growth in the Auckland region. They have however been negatively impacted by rising log prices driven by the strong export demand for logs.

Scion too, has successes to report, and we continue to make excellent progress in meeting the objectives of our Statement of Core Purpose. Our science, technology and thought leadership are helping to strengthen the forest industry’s international competitiveness and develop future growth options.

Our role in ensuring that exporters can expand their global markets and that forest growers are protected from risk is vital to creating economic value for New Zealand. Scion’s advances in these areas have been significant for industry, with examples such as:

• Identifying the cause of red needle cast disease and developing tools to mitigate its risk to forest health and log exports.

• Helping MPI to eradicate the Eucalyptus leaf beetle.

• Developing a new fire weather monitoring system and support tools for fire fighters.

• Developing, with others, an improved camera vision system for safer and more productive steep land harvesting.

• Assessing alternatives to copper chromium arsenic (CCA) preservation of timber.

• Supporting the industry develop alternatives to the methyl bromide treatment of export logs.


A highlight this year was securing a $4.7 million Waste Minimisation Fund grant, with Rotorua District Council, to build a commercial-scale demonstration plant for the TERAX™ technology, which converts organic waste, such as municipal sewage sludge, into energy and useful chemical products. The Terax Limited Partnership between Scion and the Rotorua District Council has been formed to commercialise the technology.

Helping Ma–ori grow their cultural, social and economic wealth through the sustainable use of their land is demonstrated by our work with Te Tai Tokerau in Northland to include kauri and totara in its forestry innovation project; and with Nga–ti Porou on the East Coast to develop an integrated afforestation programme for the Waiapu catchment.

Our achievements are making an important contribution to the forest and wood products industries’ goal of more than doubling exports to $12 billion per annum by 2022, in turn supporting Government’s target of growing exports as a percentage of GDP, from 30 per cent currently to 40 per cent by 2025.

SOUND FINANCIAL PERFORMANCE

Our financial results are summarised on page 48. Despite a challenging economic environment and expenditure constraints faced by our main Government clients, revenue for the year grew by 3.7 per cent to $45.5 million, with profit of $1.7 million ahead of the budgeted $1.4 million. This represented a return on equity of 5.8 per cent (budget 4.8 per cent) and enabled reinvestment of $975,000 into strategic initiatives such as industry secondments, commercialisation, Ma–ori economic development through forestry and campus development.

CAMPUS DEVELOPMENT AND ASSET MANAGEMENT

Scion implemented a 10-year campus maintenance and development plan in 2011. This year, as part of this plan, we commissioned the refurbished Orman Laboratory Wing. The wing was officially opened by the Minister of Science and Innovation, the Honourable Stephen Joyce, in October 2012. In June, the refurbished laboratories were awarded the international S-Lab 2013 Award for an International Laboratory Building.

Also, during the year approximately half of our staff located into more open, interactive work spaces with improved furnishings and equipment.

With respect to a safe work environment, in January we were delighted to achieve the tertiary level requirements for ACC Workplace Safety Management Practices. We are maintaining a strong programme of initiatives to build a ‘safety’ culture across the organisation.

We maintained Enviro-Mark Bronze accreditation for environmental management and are seeking ‘Silver’ next year.

Significant investment was also made in Scion’s tree nursery to enhance the security of the genetic modification field trial area, and improve the tree breeding and propagation research facilities. This infrastructure is critical to meeting forest owners’ productivity goals.

(left to right) Scion Director Chris Insley, Chair Tony Nowell, CEO Warren Parker and Hon. Steven Joyce at the opening of the Orman Laboratory Wing.

HIGHLIGHTS 07

FUTURE OUTLOOK

Markets for New Zealand forest and wood products are improving, and forecasts suggest a global deficit in softwood log supply as early as 2020.

These positive trends, along with a declining New Zealand harvest volume forecast from the late 2020s and the need to reduce our greenhouse gas emissions, have focussed forest owners and Scion on finding ways to improve the growth rate, wood properties and disease resilience of radiata pine by 2035. Wood processors would also benefit through improved log conversion yields.

Scion’s core purpose includes investigating ways for key stakeholders to increase their benefit from forestry-based ecosystem services, such as carbon storage, biodiversity protection, land stability and water quality. Forest planting and deforestation rates are proving to be very sensitive to carbon prices and this in turn is impacting the area and age structure of New Zealand’s future plantation forests, and greenhouse gas inventory. Carbon payments assist forest owners’ cash flow and are important for Ma–ori as they decide how to best use forest land returned through Treaty of Waitangi settlements and their currently under-utilised freehold land (an estimated 1.2 million hectares). Payments for these services would provide a fairer reflection of the economic value of forestry as a land use and encourage sustainable land management.

New legislation in Australia and the EU to ban illegally harvested tropical hardwoods, also presents opportunities for New Zealand’s certified plantation forests and the expansion of hardwood plantings. Producing radiata pine products with hardwood-like characteristics and improving other species with superior wood quality attributes, including New Zealand kauri, totara and red beech, are key examples.

An increase in the global demand for bioproducts is encouraging more New Zealand companies to invest in material composites, renewable chemicals and packaging based on forest biomass. The Woodscape study identified several bioproducts as having the potential to generate a step change in the economic returns from a log. These market opportunities are guiding Scion’s investments in bioproducts and bioenergy development.

The forest industry is also undergoing structural change to which Scion must be responsive. In March 2013, forest growers voted to support the introduction of a commodity levy. This is expected to be operational by 1 January 2014 and will raise an estimated $6.5 million per annum, with approximately half allocated to industry research. In addition, the Wood Processors Association and the Pine Manufacturers Association are planning to merge late in 2013, which should assist them to also introduce a levy and help position the forest products industry more effectively with key stakeholders.

Scion’s Board and staff are actively involved in these developments and assisting the industry to plan for sustainable growth and improved returns.

The new Callaghan Innovation presents Scion with a significant opportunity to boost its inputs into ‘high end’ wood and wood fibre manufacturing and bioproduct development research.

Four of the Government’s ten National Science Challenges provide opportunities for Scion to help tackle big problems confronting New Zealand. An eleventh challenge, Building better homes, towns and cities, is highly relevant to Scion’s capabilities and may be confirmed by December 2013. The challenges will influence Scion’s future science and investment, but in a manner that allows Scion to continue to fulfil its core purpose efficiently.

ACHIEVEMENTS AND ACKNOWLEDGEMENTS

This has been another very busy and productive year for the Board and executive team. Scion’s staff are continuing to excel and embrace change post the CRI Taskforce, with notable achievements highlighted on the following pages. We acknowledge their dedication and enthusiasm to realise Scion’s vision Prosperity from trees – Mai i te ngahere oranga.

Former director Alison Andrew left the Board in August, and we thank her for her excellent service to Scion. In December, it was a pleasure to welcome Dr Barry O’Neil and Ms Elizabeth Chambers to the Board. With the current Board continuing into the new financial year Scion is well placed to capitalise on opportunities arising from further positive change in the New Zealand science system, forest industry and biomaterials sector.

Tony Nowell Chair

Warren Parker Chief Executive


* This is a simple overview to indicate how the activities of Scion align to achieving the SCP Outcomes. All of Scion’s activities impact on each outcome. The above simply shows where the strongest alignment occurs.


MEASURING AND DELIVERING ON SCION’S CORE PURPOSE*

STATEMENT OF CORE PURPOSE

OUTCOME 1Increase the value and productivity of

New Zealand forestry, wood products and

wood-derived materials and other biomaterial

sectors to the New Zealand economy

OUTCOME 3Enhance New Zealand’s opportunity to benefit from forestry-based ecosystem services

to improve both the global market

position of industry and the environmental

sustainability of forestry production in

New Zealand

OUTCOME 2Protect and enhance market access and

improve risk management in the forestry industry

OUTCOME 4Increase renewable energy production

and energy security by growing

New Zealand’s ability to produce sustainable

bioenergy and liquid biofuels

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)In

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PIs)

WOOD PRODUCTS

I02 Improve the

competitiveness of the solid

wood processing

industry

WOOD FIBRE AND

BIOMATERIAL PRODUCTS

I03 Expand

opportunities in the wood fibre, pulp, packaging, biopolymer and

biochemical industries

RISK MANAGEMENT

I04 Improve

New Zealand’s forest and health and

preparedness for biosecurity incursion, fire and climate

change

MARKET ACCESS

ECOSYSTEM SERVICES

I05 Ensure

New Zealand forest industry’s

licence to operate domestically and internationally and enhance

environmental performance

BIOENERGY AND ENERGY SECURITY

I06 Increase

New Zealand energy sercurity

through the expanded

utilisation of forest biomass

for energy

KPI 1

Enhance forest

profitability

KPI 2

Expand commercial

forests

KPI 3

Improve wood product exports

KPI 4

Improve international

competitiveness of wood

manufacturing

KPI 5

Expand biorefining

KPI 6

Develop packaging solutions

KPI 7

Reduce biotic risk – forest

health

KPI 8

Reduce abiotic risk – fire, climate

change

KPI 9

Forestry – licence to operate

KPI 10

Wood manufacturing

– licence to operate

KPI 11 Increase wood product uptake

KPI 12

Increase energy security through forest

biomasss

COMMERCIAL FORESTRY

I01 Maximise the

value and profitability of

commercial forestry

HIGHLIGHTS 09

RESEARCH PERFORMANCE

HIGHLIGHTS 09


“This strategic and practical application of core funding is making a major

contribution to both science knowledge and exciting commercial

developments of high value to the forest industry.”

Dr John Butcher, CE, Radiata Pine Breeding Company

HIGHLIGHTS 11

COMMERCIAL FORESTRYIO1 – MAXIMISE THE VALUE AND PROFITABILITY OF COMMERCIAL FORESTRY

KPI 1: ENHANCE FOREST PROFITABILITYProgress to achieve KPI. Increases in productivity and wood quality through developing and transferring to industry in partnership with Future Forests Research (FFR) (i) new models that delineate the effect of forest management upon wood properties and (ii) further advances in resource assessment. In addition (iii) sequencing the Pinus radiata genome as a basis for developing substantially enhanced germplasm. Reducing supply chain costs through (iv) developing an Advanced Hauler Vision System to improve the productivity of cable harvesting operations and increase worker safety; (v) supporting the FFR harvesting programme in developing mechanical approaches to steep land harvesting.

GRAPPLING WITH THE SAFETY ISSUES OF HAULER OPERATIONS

Investment: Alpine Logging, FFR PGP

Of the five industry sectors where the most harm is occurring, forestry has the highest fatality rate. The ‘breaking-out’ function in hauler operations has been identified as one of the main activities responsible for serious harm. Apart from the human cost, ACC claims for forestry related accidents in 2011 were over $2.3 million.

The harvesting and logistics team, with FFR and commercial partner Alpine Logging, have built a prototype non-motorised hydraulic-based hauler grapple designed specifically for New Zealand conditions that will improve the safety of hauler operations in steep areas.

Designed to work across both swing and tower haulers, the grapple’s improved carriage design and control will enable more contractors to adopt the technology.

The technology features remotely controlled grapple rotation to reduce loading times and improve productivity for the hauler. The non-motorised hydraulic operating system also means the carriage is lighter and more cost effective than conventional motorised carriages. The first production unit is already in operation in the Bay of Plenty.

NEW CAMERA TECHNOLOGY IMPROVES HAULER VISION

Investment: Scion Core Funding, FFR PGP

Harvesting and logistics scientists, in collaboration with FFR, have developed an innovative hauler vision system, the ‘CutoverCam’ that will improve the safety and productivity of steep country forest harvesting operations.

Steep terrain often makes it difficult for a hauler to get a clear view of the breaker-outs, crew members who attach the wire ropes to felled trees for the hauler to extract and shift hauler ropes once a corridor of trees has been extracted.

The CutoverCam uses security camera technology to emit high frequency images of ground operations back to the hauler operator. The camera can be manipulated remotely by the hauler, providing a clear view of operations from a screen mounted in the cab, helping reduce breaker-out related accidents.

The camera has also been found to be beneficial for positioning the grapple and preventing hang-ups on stumps, improving cycle times and reducing damage to the hauler, chokers and ropes.

A business plan has been prepared and a company established to commercialise the technology.

LINKING WOOD PRODUCT QUALITY TO FOREST MANAGEMENT

Investment: FFR

Scion has developed a novel approach to predict the key properties that affect solid timber performance. This tool should assist forest growers to understand what combination of genetics, environment and management will deliver products that meet consumer needs.

The approach combines new methods for quantifying the distribution of wood properties within a tree (see Shining the light on spiral grain page 18), with numerical modelling to predict the performance of sawn boards, such as stiffness and warp.

Although the true cost of poor wood quality has not been fully quantified, previous estimates suggest it exceeds $200 million per annum. This tool will reduce the amount of timber rejected at the mill or by the consumer due to such things as excessive distortion, inadequate stiffness or unsuitable appearance.

HERBICIDE RESISTANT RADIATA PINE FOR COST EFFECTIVE WEED CONTROL

Investment: Scion Core Funding


A herbicide resistant radiata pine has been developed that may provide an easy and cost efficient solution to weed control. Resistance to an environmentally benign herbicide will improve the environmental footprint of a planting operation, and help forest growers achieve their sustainability and productivity goals, improving efficiencies in both forests and nurseries. This will be particularly beneficial for the establishment of radiata pine plantations in weed prone hill country.

Trials in the containment house and in the field have demonstrated the efficacy of herbicide resistance in genetically modified pine. It is projected that herbicide resistance could significantly reduce the cost of herbicide treatment due to lower labour and chemical input.

BORON VITAL TO TREE GROWTH

Investment: MBIE

Boron deficiency is the most widespread micro-nutrient deficiency in New Zealand forests, causing the death of terminal buds and shoots, and stem malformation.

Recent studies by Scion’s forest management scientists indicate that boron fertiliser may also promote tree growth, having wider benefits than the prevention of shoot tip or leader dieback. The application of boron fertiliser in areas where levels are low enough to limit tree growth may therefore improve forest productivity.

The cost of applying boron fertiliser, at a rate of 40 kilograms per hectare, is around $90-$110 per hectare (including fertiliser and application). Trials with radiata pine showed an average 22 per cent growth response to boron, with an 18 per cent growth response in Douglas-fir. A single application of boron is likely to be required for most sites.

Further research is planned to determine if growth response to boron will occur in a wider range of environments to those examined to date.

Sawmills now only accept Douglas-fir timber of higher stiffness, and many do not accept wood that fails to meet their stiffness grade. Outputs from this research will allow growers to retain their market share.

NEW CONTAINER FACILITY EXPANDS NURSERY OPERATIONS


Scion’s nursery has doubled the capacity of its containerised tree stocks facility to meet the needs of clients facing specific site or species challenges. The facility now has the scope to on-grow up to 700,000 exotic or indigenous plants, which increased the nursery’s total capacity to over two million plants, bare-root and containerised.

Research at Scion shows that container grown tree crops can significantly prolong commercial planting seasons and reduce the stress typically suffered by bare-root seedlings, resulting in faster recovery and a higher survival rate. Although bare-root technology will continue to be the mainstay of the industry, container grown tree stocks have a role to play in research and in meeting the challenges of site or niche species situations.

COASTAL REDWOODS SHOW POTENTIAL

Investment: FFR, MBIE

Scion, on behalf of FFR and industry partners, New Zealand Redwood Company and New Zealand Forestry, is exploring ways to improve the certainty of growing coastal redwoods commercially, and increase New Zealand’s acceptance of the product. A review of management practices and marketability is currently being undertaken.

KPI 2: EXPAND COMMERCIAL FORESTSProgress to achieve KPI. Increasing investment in new forests for a range of stakeholders. (i) Working with iwi clusters such as Te Tai Tokerau to support a business case for development of forests for Northland; (ii) improving knowledge of indigenous species (kauri and totara) through developing approaches, e.g. calculators to enhance their ability to be adapted for commercial forestry and (iii) continued support to stakeholders in Douglas-fir, eucalypts and redwoods to increase confidence in the expanded utilisation of these species.

DOUGLAS-FIR GENETIC GAIN TRIALS

Investment: FFR, MBIE

The breeding programme run by Scion through FFR and the Douglas-fir cooperative, has provided a solution to the shortage of Douglas-fir seed in New Zealand. Commercial quantities of seed from selected breeding stock are now available from seed orchards around the country.

Scion’s tree breeding scientists have undertaken an extensive selection programme of Douglas-fir based on timber stiffness. Superior germplasm from initial selections was grafted and made available to industry from 2005-09, producing commercial quantities of seed in 2010.

Large quantities of young plants from current commercial seedlots have been raised along with seedlings from the new selections based on wood stiffness. Genetic gain trials have been planted in 2012 and 2013 to establish exactly how these new seedlots benchmark against more traditional seedlots (for example, seedlots of Washington origin).

HIGHLIGHTS 13

Redwood is relatively unknown in New Zealand as a product. Redwood is structurally stable and can be used in existing sawmilling operations. Although more naturally durable than radiata pine, durability of current plantings appears to be variable. Domestic timber markets hold promise due to redwood’s relatively short 37-40 year rotation and its potential to have a higher return than radiata pine. However there is still a perception our domestic product will have to improve in order to compete with US-grown redwood.

Currently exported to the US as raw logs and timber, confidence is growing with the US market that New Zealand timber is comparable to that from their domestic crop.

The Redwood Development Plan identifies further research priorities to provide more certainty to growing redwoods commercially and encourage expansion of plantings. It is already being implemented by industry. The report is also being made available to regional councils and other redwood stakeholders.

PRECISION ASSESSMENT WITH TRANSFORMATIONAL TECHNOLOGY

Investment: FFR, MBIE, Timberlands Ltd, Rayonier; Interpine invested in the methodology.

...reliably monitoring individual trees from remote sensing has been an elusive goal for the global forestry industry for years, and we have achieved it...

LiDAR (Light Detection and Ranging) technology uses reflected laser beams to provide data on stand variables including height, volume, basal area and stocking. LiDAR is an assessment tool to aid forest management decisions and more accurately describe the forest resource.

Scion, in partnership with Kaingaroa Timberlands, Silmetra and Interpine, developed a methodology to utilise LiDAR generated data within an existing forest management structure. The methodology translates LiDAR information into area-based metrics that can be directly used within existing software systems to improve the accuracy of assessing stand resources.

Kaingaroa Timberlands plans to implement the technology to reduce the amount of field inventory plots required and will be acquiring LiDAR for use at Kaingaroa forest, which constitutes about 10 per cent of the national estate. Their development of this technology, in conjunction with Scion and other parties, is likely to expedite the uptake of LiDAR for inventory purposes throughout the forest industry in New Zealand.

In a step further, Scion’s resource assessment specialist and software developer, Dave Pont, has refined the methodology to detect, delineate and count individual trees.

The Individual Tree Detection (ITD) software can generate individual tree metrics and maps showing spatial variation in tree stocking, and allows forest managers to accurately predict stocking and tree dimensions. This level of detail has not been achievable until now.

“Reliably monitoring individual trees from remote sensing has been an elusive goal for the global forestry industry for years, and we have achieved it,” says Dave. “Application of the data is the key. Both the resource assessment and the ITD technologies use the same data from LiDAR; it’s how they analyse it which is different. ITD can provide detailed information that is not available using conventional remote sensing technology.”

Tests have shown the ITD software can count trees in a stand to within a mean absolute error of 5 per cent.

On-going research is looking into the utility of ITD to predict log grade and wood quality. This will reduce inventory error and allow more precise assessment of forestry resources.

Individual tree detection will also provide valuable input to a planned phenotyping platform for future research into genetics, tree breeding and forest management, which is critical for supporting industry’s productivity enhancement goal.

“These technologies are ideal for New Zealand conditions where there is predominantly a single species grown commercially,” says Dave. “This is not the case internationally where mixed species make it difficult to remotely assess resources. However, it is likely our software can be adapted to solve this issue for global clients.”

GROWING ECONOMIC VALUE FROM INDIGENOUS FORESTRY

Investment: Scion Core Funding, MBIE, MPI, Tane’s Tree Trust

...the improvement in productivity of Agathis species by 50 per cent in only one breeding cycle in other countries shows the potential to do the same for kauri in New Zealand...

New Zealand forestry is dominated by radiata pine. An increasing number of forest owners are looking to diversify in response to market changes and the forecasted impacts of factors such as climate change. This provides an opportunity to grow the economic value from indigenous species.

Ma–ori landowners and trusts, in particular, are actively pursuing growing indigenous species for timber or other commercial opportunities. Scion is working with FFR, Te Tai Tokerau Forestry, Tane’s Tree Trust and Northern Totara Working Group to identify the production and management potential of selected indigenous species.


“Surprisingly one of the greatest barriers to wider use of indigenous trees in both environmental enhancement and commercial planting projects is a lack of easily accessible and understood information about how to establish and manage indigenous species, and little is known about which provenance of which species to plant,” says Peter Berg, Chairman of Tane’s Tree Trust.

“Collaboration with Scion on a suite of key nursery and planting trials and investigating the cost of establishing indigenous forest on marginal lands is one very practical way we are helping to advance the information base. This includes evaluating the performance of indigenous tree and shrub species raised as bare-root plants in the nursery against expensive container grown seedlings on a range of hill country and riparian sites from the central North Island to North Auckland and involving councils, community groups, New Zealand Farm Forestry Association and other interest groups. Results are already demonstrating that major cost savings are possible and are attracting wide interest.

“In Northland, Scion is providing important leadership to the Northland Totara Working Group where Tane’s Tree Trust, local councils and landowners have established a comprehensive programme of silvicultural trials in naturally regenerated stands of totara on farmland. In this region at least, but probably elsewhere in New Zealand, the privately owned totara resource is very extensive – estimates off aerial photographs suggest more than 50,000 hectares in Northland, making this a particularly valuable commercial opportunity if properly managed.”

Growth and productivity models developed by Scion’s indigenous forestry specialists have been applied to a range of natural and plantation indigenous forests nationwide. The effects of pruning and thinning, and of faster growth rates on wood properties, are also being investigated along with opportunities for early value recovery from companion crops or commercial thinnings. Information from the growth and productivity models is being developed into web-based calculators from which real-world estimates on returns on investment and management regimes can be developed and compared.

Indigenous forestry specialist, Greg Steward, says results are encouraging and kauri in particular is showing good commercial potential. “We’re beginning to realise that indigenous species like kauri, can achieve commercial yields at harvestable ages of 50-60 years in good growing conditions. Apply good silviculture and we get better production, and we haven’t even looked at genetic improvement.

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KAURI VOLUME COMPARISON GRAPH

Planted-best growth performance

Planted-median growth performance

Natural-median growth performance

Comparison of estimated volume for kauri in planted and natural forests. From age 20-60 years planted kauri are estimated to produce 16-20 cubic metres/ha/year for medium to best performing forests. A comparative figure for kauri in an average natural forest is 2.0 cubic metres/ha/year.

HIGHLIGHTS 15

“The volume of kauri in 50 year-old planted stands compared to natural stands is about 12 – 20 times better. Wood quality is comparable, and density is not negatively influenced by latitude, age or growth rate. Planted kauri also responds well to thinning.

“Data supplied by INRA in France, show the models of growth and productivity for New Zealand kauri can be applied to Agathis species native to New Caledonia, grown in managed plantations. The productivity of Agathis in New Caledonia can be improved by 50 per cent in only one breeding cycle.

“The results are demonstrating that both kauri and totara are viable alternatives where radiata pine is not the species of choice. Combining Scion’s knowledge of growth modelling and INRA’s breeding selection, we will have an indigenous species with highly regarded wood properties and a number of natural attributes as a forestry species that’s also far more productive than was expected. I believe it is directly competitive against our exotic species, and as an indigenous species, very appealing to Ma–ori forestry aspirations,” says Greg.

UNLOCKING THE GENETIC CODE OF PINUS RADIATA


The benefits of being able to discover genes responsible for particular traits will be enormous for the forestry industry, fast-tracking tree breeding and facilitating earlier selection at the seedling stage that will accelerate genetic gain.

Scion has generated the genomic sequence data for Pinus radiata, providing a platform for a major productivity increase for New Zealand’s forestry industry and for placing Scion and partner, the Radiata Pine Breeding Company (RPBC), at the forefront of global tree breeding research.

This genetic snapshot of radiata pine provides an opportunity for scientists to unlock the secrets of the genome and use this information to develop improved germplasm and undertake leading-edge research in areas such as disease resistance and biomaterials.

The benefits of being able to discover genes responsible for particular traits will be enormous for the forestry industry, fast-tracking tree breeding and facilitating earlier selection at the seedling stage that will accelerate genetic gain.

Until recently, costs of whole genome sequencing were prohibitive. The advent of new big data technologies at New Zealand Genomics Ltd (NZGL) has helped Scion to become a significant international player in forest genomics.

“The conifer genome is almost ten times larger than the human genome, and could have up to 100,000 genes,” says Dr Heidi Dungey, Science Leader for forest genetics. “Scion’s Pinus radiata genome dataset consists of over eight billion short sequences and we couldn’t have done it without NZGL. It is the assembly and annotation of this sequence data which poses the next biggest challenge. This will be a huge computational undertaking.”

Scientists will assemble the data using a reference-based approach using work already done in sequencing the loblolly pine genome by the University of California, Davis. This will be the largest reference-based assembly ever attempted, and much like doing an eight billion piece jigsaw using a slightly different guiding image.

Results are expected to be available in 2014 when the first assembly of the Pinus radiata genome will go into the public domain for further collaborative input from the international genetic community.

A single tree has been sequenced at this stage, selected by the RPBC for its top breeding qualities. The benefits for the forest industry will be wide reaching. Genome sequencing has given the RPBC confidence to embark on a collaborative Genomic Selection project, which will be 50 per cent funded by the forest industry.

“The Radiata Pine Breeding Company is commencing a major research initiative to implement genomic selection in radiata pine breeding,” says Dr John Butcher, Chief Executive of the RPBC. “This will lead to a step-change in the forest growing industry with genetic gain being doubled, and time for deployment being halved.

“Scion is the major research provider to this development, and is utilising core funding to sequence the radiata pine genome. This independent Scion research will run in parallel with the RPBC programme and provide data to optimise the development of the molecular tools required for genomic selection.

“Information from the genome sequence will also contribute to research in such diverse applications as disease control and development of biomaterials from radiata pine. This strategic and practical application of core funding is making a major contribution to both science knowledge and exciting commercial developments of high value to the forest industry.”

John estimates the gain to the New Zealand economy from genomic selection facilitated breeding to be worth up to $12,000 per hectare to forest growers from improved volume alone.

Scion is investigating broader collaborations using the genome sequence, with the University of California, Davis and Universidad de Concepcion, Chile.

IO1 – www.scionresearch.com/impact/commercial-forestry

0 50 100 150


Greater onshore processing will

provide a significant boost to regional

and national economies

HIGHLIGHTS 17

KPI 3: IMPROVE WOOD PRODUCT EXPORTSProgress to achieve KPI. Improve wood product exports. (i) Continued development of a novel approach to developing a high performance wood product using radiata pine; (ii) developing new methods to enhance the durability of radiata pine to address concerns over some preservatives in timber; (iii) supporting the industry in enhancing standards; (iv) developing bio-derived adhesives to provide alternatives to formaldehyde based adhesives as a product differentiator and (v) continued to support industry in their product development activities.

NATURAL ALTERNATIVES FOR WOOD PRESERVATION

Investment: Scion Core Funding, MBIE, Abodo Wood Ltd

Strong consumer demand for healthy living environments, along with regulatory demand for chemical-free building products, is driving wood durability scientists to find bio-based alternatives to chemical wood preservatives. Our aim is to develop bioactive wood preservatives to achieve H3 hazard protection for wood used in window and exterior door joinery, cladding and outdoor uses such as decking.

Over the past two years, Scion’s wood preservative team has screened 100 compounds from a range of natural sources, identifying 20 with positive anti-fungal properties.

This year, the team has been able to fix two of these compounds in wood so they do not leach out when exposed to water, providing resistance to wood decay.

SOLID WOOD PROCESSING

With some existing wood protection chemicals now unacceptable to many consumers and restricted in certain export markets by new regulations, this technology will help New Zealand’s wood exporters meet global demand for environmentally friendly high-value building products.

CREATING HIGHER MARGIN WOOD PRODUCTS FROM RADIATA PINE


Scion’s dewatering technology, the removal of water from within the wood that enables further modification to take place, lays the foundation for the production of bespoke high-value wood products from radiata pine. This may allow radiata pine to sell at prices similar to high-value hardwoods.

The dewatering technology uses CO2 to remove water from within the centre of wood cells enabling further modification to a range of exacting stability, hardness, colour and durability requirements. Successful trials conducted this year by our wood processing scientists have further optimised the technology.

Using CT and MRI scanners, scientists have also been able to gain a clearer picture of comparative moisture distribution patterns inside both dewatered and conventional kiln dried wood. These in-depth studies show the dewatering process has no negative impacts on the final wood quality.

While the technology comes with higher capital and operating costs than traditional wood processing technologies, it would complement an existing sawmilling operation.

DEWATERING PILOT PLANT FIRST STEP TO COMMERCIALISATION

Investment: Scion CAPEX

A much greater understanding of the dewatering process has enabled scientists to scale-up the technology in a move towards commercialisation.

The construction of a supercritical CO2 dewatering pilot plant that can process larger amounts of wood, subject to the success of current trials and capital cost, is expected to commence at Scion’s Rotorua campus in 2014. The design is already completed and an independent business case prepared.

Design for the modification of Scion’s timber treatment facility has also been completed to enable chemicals associated with modifying timber to be evaluated as part of the dewatering technology.

The supercritical CO2 pilot plant would allow the production of sufficient volumes of dewatered material to further the research programme and assist potential licensee companies to complete market and economic evaluation of prototype products.

IO2 – IMPROVE THE COMPETITIVENESS OF THE SOLID WOOD PROCESSING INDUSTRY


KPI 4: IMPROVE INTERNATIONAL COMPETITIVENESS OF WOOD MANUFACTURINGProgress to achieve KPI. Assist industry in effecting costs savings. (i) In association with Solid Wood Innovation, a large scale trial to develop a tool to segregate logs based on stiffness has been undertaken and is showing promise; (ii) a kiln optimiser programme to introduce energy efficiencies into sawmills has been installed with indicated savings of up to 10 per cent of energy use.

REDUCING VARIABILITY IN PINE PROCESSING

Investment: SWI, MBIE

Radiata pine is inherently variable in its properties and subsequently, its response to processing. Scion’s wood processing scientists have worked together with Kaingaroa Processing Plant (KPP), Tui Technology, Falcon Engineering, and Automation and Electronics to improve efficiencies in, and outcomes from processing radiata pine.

A log segregation system has been devised and trialled at KPP. The system measures important log characteristics such as shape and pith location that should be able to predict the quality of the sawn lumber derived from each log. Sawmill trials in 2013-14 seek to validate that the segregation system can select logs with superior properties for structural and appearance grade products.

Our scientists have also confirmed that timber drying schedules can be optimised to reduce drying costs while maintaining product quality and throughput. Application of the kiln optimiser system in sawmills has shown that up to 11 per cent savings can be achieved in overall drying costs.

With about two million cubic metres of timber kiln dried annually in New Zealand at a cost of $50 per cubic metre (BERL Economic Impact of Wood Drying, 2004), application of the technology by only 30 per cent of the mills would equate to $3.3 million savings per year.

SHINING THE LIGHT ON SPIRAL GRAIN

Investment: FFR

Spiral grain is a causal agent of warp, adding considerable costs to the wood processing industry and undermining the reputation of timber as a reliable building product. Warped timber results in the loss of market position and substitution with steel framing or more expensive laminated timber products. The warp reject rate from Framing 1 grade is estimated to be 28 per cent.

Scion has developed a technique to map spiral grain angles on wood disks. The technology transmits short-wave near infrared light through wood disks, which moves in the direction of the fibre. Image processing algorithms are then used to eliminate wood features such as moisture and density, and calculate the angle of the grain.

The technology has been used to generate spiral grain maps for whole-tree stems of one clone, which will be used to gain a better understanding of the causes of spiral grain and assist in the development of breeding selection programmes.

The technology could also be implemented for log segregation. Early segregation will save cost by preventing the drying of inferior wood and enabling delivery of a more consistent quality product.

The technology was developed in partnership with FFR; PermaPine Taupo assisted with disk preparation. Wood quality scientist Mark Riddell and his team won the FFR Research Award for Science of International Quality 2012 for this work. Larger scale automated grain assessment is planned.

IMPROVING PRODUCTIVITY IN THE BUILDING SECTOR

Investment: Scion Core Funding, BRANZ (Building and Construction Productivity Partnership)

An industry-wide review of the building and construction industry by Scion and the Building and Construction Productivity Partnership has identified key drivers of change that will help the sector improve productivity.

Major construction projects, such as the Christchurch rebuild, intensification of Auckland housing and country-wide seismic strengthening, among others, will seriously challenge a sector subject to political, economic and social constraints, and dominated by small businesses having to account at many levels.

HIGHLIGHTS 19

Scion’s value chain optimisation scientists developed a systems mapping model to help them gain a better understanding of factors influencing productivity across all stages of construction, as well as taking into account the vast complexities of the industry.

Using the model, 19 critical points were identified in the building and construction chain where appropriate intervention could provide the greatest leverage. The review also contains 29 recommendations for improvement covering issues such as increased standardisation of processes, improved quality management, employee training, and client education and involvement.

The Ministry of Business, Innovation and Employment is using the findings as a basis for their ongoing work on housing affordability and construction productivity of the New Zealand construction sector.

WOODSCAPE STUDY

Investment: Scion Core Funding, MPI, WPA, PMA, NZFOA, NZTE

...the study identifies significant opportunities in primary solid wood processing of A and K grade logs...

Scion was contracted by the New Zealand Wood Council (Woodco) to conduct a nation-wide analysis of New Zealand’s wood processing sector with a view to expanding onshore processing operations. The study supports Woodco’s strategic goal of more than doubling export earnings from the sector to $12 billion by 2022.

“WoodScape is a valuable tool for investors,” says Colin McKenzie, Chairman of the WoodScape Board. “The WoodScape study has identified a number of promising opportunities for new wood processing ventures in New Zealand.

“This is of wide-ranging benefit to both existing processors and potential investors, who will be able to further refine the data for specific proposals, facilitating additional wood processing in New Zealand along with employment and value-added opportunities.

“WoodScape will also help Scion focus further research into generating more value for wood processors by gaining a better understanding of how the industry’s value chain can be enhanced.”

The WoodScape model has already been used for more detailed analysis of one technology and site specific studies are being planned.

Scion conducted the WoodScape study in partnership with FPInnovations (Canada) and with direction from a technical working group and project board, along with industry and government representatives.

IO2 – www.scionresearch.com/impact/solid-wood-processing

Our scientists designed a model to undertake financial analyses of current and emerging wood processing technologies for the study. The WoodScape model is able to highlight investment options based on metrics such as potential return on capital, job growth and GDP contribution. Factoring in region-specific information on wood quality and volume, the result is a value chain analysis where variables along the supply chain can be explored and potential opportunities identified.

“Due to the global financial crisis and associated low housing starts, the wood processing industry in New Zealand has had a difficult time in recent years,” says Peter Hall, technical leader for the project. “On the other hand a number of new processing technologies and products look promising. We needed to determine how an investor could compare all possible options and figure out where to focus resources for the future.”

About half of the country’s 26 million cubic metre annual harvest of logs is exported unprocessed. Greater onshore processing will provide a significant boost to regional and national economies and is the key driver behind Woodco’s strategy.

The WoodScape model was used to analyse the investment potential of a diverse range of nearly 40 different technologies; both current and emerging. They included solid wood products, panel products, pulp and paper, engineered wood products and biofuel plants.

The study identified significant opportunities in primary solid wood processing of A and K grade logs. Engineered wood products clustered with a process residue user, such as fuel and chemical production, also look promising. The WoodScape model has significant value in analysing these opportunities in greater depth, with a focus on sensitivity and risk analysis.


Our unique combination of

advanced equipment and capability enables

novel packaging solutions to meet market demands

HIGHLIGHTS 21

WOOD FIBRE, PULP, PACKAGING, BIOPOLYMERS AND BIOCHEMICALS

KPI 5: EXPAND BIOREFININGProgress to achieve KPI. Growing revenues by at least 10 per cent through development of new products. (i) The Woodforce product is now launched internationally with progress being made on its uptake in New Zealand; (ii) new chemicals from the by-products of the pulp and paper industry are in evaluation; (iii) new plastics from biomass have been made with the first commercial production of the kiwifruit biospife with ZESPRI; (iii) assisting Biopolymer Network Ltd in the development of high value chemicals (e.g. personal care) from plant biomass; (iv) developing lignin based products for application in very high value markets.

LIGNIN MATERIALS AT NANOSCALE

Investment: Scion Core Funding, Revolution Fibres Ltd

Scion’s Industrial Biotechnology Team has been investigating the application of advanced processing technology to create nanofibres from lignin.

Using Revolution Fibres Ltd’s commercial processing equipment, our team has been able to scale up this technology to produce continuous lignin nanofibre mats. This is the first step towards developing a product suitable for further processing into carbon fibre materials for potential uses in advanced composites, energy storage and filter media.

Waste lignin is the world’s second most abundant polymer. New Zealand alone produces approximately one million tonnes annually as a by-product of the pulp industry, most of which is used for energy production by the industry. The development of nanofibre mats adds co-product options for lignin, giving it the potential to become a cost-competitive and non-food feedstock for carbon fibre production.

WOODFORCE – GOING FROM STRENGTH TO STRENGTH

Investment: Scion Core Funding, PSAF, Sonae Indústria Group

Successful large scale trials of Scion’s wood fibre technology for polymer reinforcement have seen global giant Sonae Indústria extend their licence to commercialise the ‘Woodforce’ technology to North America.

Sonae Indústria has held an exclusive European licence for the technology since mid-2011 and has subsequently worked with Scion to scale up the technology for commercial production. The licence extension will increase Sonae Indústria’s ability to deploy the technology into major markets, generating significant royalties for New Zealand.

The technology binds wood fibre in pellet form to produce ‘dice’ that can be used in the manufacture of wood plastic composites using existing plastic processing equipment. The resulting product has strength and weight advantages with a lower environmental footprint than many plastics.

Scion’s agreement with Sonae Indústria maintains the opportunity and markets for local companies to exploit the technology and enable added value manufacturing, which is now being actively pursued.

KPI 6: PACKAGING SOLUTIONSProgress to achieve KPI. Supporting the packaging and composite products industry to grow the value of exports. (i) Supported the Biopolymer Network Ltd to enhance and commercialise the ZealaFoam™ bio-based foam packaging product as a sustainable alternative to expanded polystyrene; (ii) developing enhanced coating systems for packaging; (iii) developed the first, for New Zealand, biodegradation testing facility to assist the New Zealand packaging industry in evaluating their new products; (iv) working directly with the packaging and food products industry to enhance their processes and packaging solutions.

FRUCOR PACKAGING OPERATIONS AUDIT

Investment: Commercial

The Scion Packaging Solutions Team completed a technical audit of Frucor’s packaging line and storage facilities to identify inefficiencies, damage and poor performance of cardboard packaging on their juice production line.

Mr Alistair Sayers, Packaging Manager at Frucor, New Zealand’s second-largest beverage company, says they identified the need for an independent technical organisation with the expertise and analytical facilities to best identify and influence future improvements.

Several factors related to box construction, design, packaging robotics and moisture content were identified that contributed to box damage. Frucor has implemented several of the recommendations resulting in a 75 per cent reduction in rejectable carton quality and improvements in the proportion of the highest quality cartons. On a low margin product this is a great help to Frucor and the supply chain.

IO3 – EXPAND OPPORTUNITIES IN THE WOOD FIBRE, PULP, PACKAGING, BIOPOLYMER AND BIOCHEMICAL INDUSTRIES


OUTSIDE THE BOX THINKING WITH MULTI-LAYERED BARRIER COATING


Development of a coating technology for paperboard packaging that acts as a high moisture barrier increases packaging lifetime and ensures the product reaches customers in the best possible shape.

The new multi-layered, latex-based barrier coating greatly reduces the volume of coating required – the industry norm is to apply one thick barrier coating. These thin layers can be applied using equipment standard to packaging companies. Applying barrier coatings in-house rather than using external suppliers, means companies can supply packaging in response to customer demand.

Following laboratory-scale trials at Scion, this coating technology was successfully tested at Karlstad University in Sweden at pilot scale. It will be made commercially available to New Zealand’s paperboard packaging companies.

AUTOMATED BIODEGRADATION FACILITY AIDS AUTHENTICATION

Investment: Scion Core Funding and CAPEX, ZESPRI, BPN

Scion’s new biodegradation test facility will help New Zealand companies differentiate their products in international markets by providing validated evidence of their reduced environmental footprint.

Our scientists have completed the first trials using the facility, generating compostability data for internally developed biomaterials such as ZESPRI’s biospife and the Biopolymer Network’s (BPN) ZealaFoamTM materials (see An eco-friendly alternative to polystyrene below). The results will help with internal product development, and assist ZESPRI and BPN move towards composting certification of their products.

Built in line with international standard ISO 14855-1, the facility is designed to quantify the aerobic composting of bioplastics and other materials by replicating industrial composting conditions. The facility measures evolved CO2 levels of a product for up to six months and will help determine whether additives impede or accelerate composting.

This unique-to-New Zealand biodegradation testing facility will provide companies with an onshore option for the screening and authentication of their products.

AN ECO-FRIENDLY ALTERNATIVE TO POLYSTYRENE

Investment: BPN, MBIE

New Zealand’s packaging industry now has access to ZealaFoamTM, a revolutionary bioplastic alternative to expanded polystyrene (EPS) that can be manufactured on existing production lines with little modification.

Biopolymer Network Ltd (BPN), supported by Scion, established an industrial scale pilot plant in Nelson to mould fish boxes and other products from ZealaFoamTM for use in packaging, sporting goods, furniture and insulation.

Expanded polystyrene packaging is a multi-billion dollar industry with world consumption of 5.8 million tonnes; it is however made from non-renewable petrochemicals and its disposal is an international problem. As an eco-friendly alternative to a world-wide problem, ZealaFoamTM has the potential to generate substantial economic returns by providing a significant marketing advantage for New Zealand’s primary exports, in particular fresh and frozen fish. ZealaFoamTM also supports New Zealand’s high environmental standards.

Scion has undertaken an evaluation of ZealaFoamTM, which proves to be comparable with EPS in terms of performance and cost, with the added advantage of being sustainably derived and industrially compostable.

Biopolymer Network Ltd, a joint venture between Scion, AgResearch, and Plant and Food Research, is working with packaging and product companies nationally and internationally. It is also collaborating with CO2 processing experts (a significant part of the production process) and bioplastics manufacturers.

HIGHLIGHTS 23

CREATING A FUTURE FOR LIGNIN


...transforming this high-volume, low-value by-product into high-value biochemicals with potential for use in consumer goods...

Scion’s lignin research programme has identified enzymes to modify lignin and created potentially valuable chemicals and materials from this abundant by-product of wood processing.

Over one million tonnes of lignin is generated as a by-product of pulp and paper manufacture in New Zealand each year, which is used as a low grade fuel for energy production by the industry. Future forestry-based biofuels produced in industrial biorefineries will also produce lignin - one kilogram per litre of fuel. The economics of biorefineries will be greatly improved by the ability to add value to lignin.

Scion is focused on transforming this high-volume, low-value by-product into high-value biochemicals with potential for use in consumer goods, lubricants, adhesives or packaging.

Scion is tackling the challenge of unlocking value from lignin through industrial biotechnology – using enzymes and through chemical approaches for the development of epoxy resins – and the creation of lignin nanofibres.

Our biotransformation team, led by Dr Gareth Lloyd-Jones, has developed genetically modified, or recombinant, enzymes to transform lignin. These recombinant enzymes (so-named because they were created from recombinant DNA) were already known to science where they are involved in the remediation of polluted soils.

Many of these pollutants share a number of chemical similarities with lignin, specifically the presence of chemical rings in their structures. Based on this, Gareth hypothesised that this class of enzymes could be used to transform lignin. Of the enzymes produced, to date, more than a dozen have successfully broken apart these chemical rings.

These enzymes are being tested in Scion’s fermentation facility to determine which of them have the ability to transform lignin at an industrial scale. Gareth explains, “this is the first known application of enzymes involved in pollutant degradation as tools for lignin modification through industrial biotechnology.”

Chemicals from lignin could also find a future in epoxy resins, a high-value and versatile polymer.

Epoxy resins are used in a range of industries due to their valuable properties. Applications include coatings, castings, electrical components and insulation, reinforced composite materials and adhesives.

These epoxy resins are typically made via chemical reactions with Bisphenol A (or BPA), a substance that has raised health concerns world-wide.

The objective of our research has been to replace BPA with a bio-based alternative. Lignin has been broken down to smaller chemicals which are further reacted and formulated to make novel epoxy resins.

The lignin-derived epoxy components can replace up to 75 per cent of the BPA in a resin and lead to improvements in mechanical performance, outperforming the industry standard in strength and stiffness.

Lignin has also been used to produce nanofibre mats which have potential to be further processed into carbon fibre materials (see Lignin materials at nanoscale, page 21).


ADDING MILEAGE TO BIO-WASTE

Investment: Scion Core Funding, LignoTech Developments Ltd, Fisher Composite Technologies

...a transformation technology that converts bio-waste into a replacement for petrochemical and mineral fillers used in the manufacture of plastics and composites...

A three-way collaboration between Scion and industry partners, LignoTech Developments Ltd and Fisher Composite Technologies, has resulted in a revolutionary technology that creates eco-friendly, high-value products from agricultural waste.

LignoTech Developments’ transformation technology converts bio-waste into a replacement for petrochemical and mineral fillers used in the manufacture of plastics and composites. The patented steam explosion technology ‘pressure cooks’ lignocellulosic residue, such as dried distillers grains (DDGs), corn fibre and other biomass resources, opening the structure and making it amenable to further processing and modification. The resulting powder can be used as a filler in the manufacture of thermoset and thermoplastic bio-composite products.

Bio-composites made using LignoTech treated fillers are lighter and stronger with a Class A finish equal to those containing conventional fillers such as calcium carbonate. These properties make end products, such as sheet moulded and bulk moulded compounds, highly desirable to the automotive industry in particular, for use in light-weight, economical vehicle parts. Resin transfer moulding, or RTM, is another product showing considerable promise.

Scion has been working with LignoTech Developments since 2007, testing the mechanical properties of the biomass residue derived materials, such as impact resistance, stiffness and strength. In 2010, a strategic collaborative agreement was established between the two companies. Scion is currently working on further enhancements, such as reducing water uptake of the LignoTech material, which could significantly enhance the properties of the bio-composites.

With millions of tonnes of DDGs derived from the production of ethanol from corn each year in the United States alone, this ground-breaking technology is generating considerable interest from North American manufacturers. US-based Fisher Composite Technologies is working alongside LignoTech Developments and Scion to trial the technology with potential North American customers, ready for when LignoTech Development’s US plant comes on-stream.

IO3 – www.scionresearch.com/impact/wood-fibre

HIGHLIGHTS 25

“We see this exchange programme as offering many benefits to both our organisations. Scion provides much of our research and development capability, in addition to often helping us troubleshoot operational problems in a timely way. So we are keen to strengthen our technical links with Scion and this staff exchange programme, which was started in 2012, provides an excellent way of doing this. By embedding Sean in our pulp mill technical team for three months, he was able to get first-hand experience of the production environment, including the nature of problem solving, and gain a better understanding of longer-term improvement opportunities. The upcoming, reciprocal exchange will see a Kinleith technologist or engineer working at Scion and gaining research project experience and an understanding of how a knowledge-based organisation functions.”

Tom Clark, Manager Technical Services, Carter Holt Harvey Kinleith Mill

PAN PAC

Achieving the right balance

Clean technologies scientist Dr Suren Wijeyekoon proposed a nutrient dosing strategy for the biological treatment of wastewater during a three week secondment to Pan Pac’s pulp mill.

The pulp and paper industry has traditionally treated wastewater using biological oxidation ponds. Increasingly stringent effluent disposal limits means companies are beginning to invest in modern biological wastewater treatment plants with better engineering control.

Suren’s secondment provided support to Pan Pac staff following the mill’s recent upgrade of its wastewater treatment plant to Moving Bed Bio Reactor (MBBR) technology, based on a benchmarking study completed by Scion. This has led to new challenges for the company.

CARTER HOLT HARVEY KINLEITH

Linking science and technology at operational level

A three month secondment at CHH Kinleith pulp and paper mill provided wood and fibre scientist, Sean Taylor, an opportunity to gain a deeper understanding of the operations and challenges at one of the country’s largest mills.

The secondment also demonstrated the value of collaboration between industry players and the research community.

Pulp and paper mills are vast, complex processes. Immersion in day-to-day unit operations, and production and marketing meetings, greatly enhanced Sean’s overall understanding of the various pulping processes at a site-specific level.

It also shed light on global pulp market dynamics and how these impact on our client, Carter Holt Harvey.

During his secondment Sean was able to observe how the mill monitors and controls kraft pulp quality. In one situation, where a quality issue arose, his onsite presence assisted the mill technical personnel in investigating the issue through evaluation of process chemistry. Basic analytical tools developed by Sean provided insight into the mill chemistries at a fundamental level. These could be used adequately and independently by mill personnel as future process monitoring options.

Sean was employed full time at Kinleith between August and October 2012 as part of a reciprocal relationship between Scion and CHH.

SECONDMENTS

Pan Pac’s system needed to handle variable inputs, and as such, improved control of nutrient addition was required to maintain performance stability and reduce cost. Suren’s secondment has also provided the opportunity for two further research projects.

“The pulp and paper sector solid waste initiative project is an MfE, pulp and paper industry and Scion funded project for the big pulp and paper mills in New Zealand,” says Suren (see Safer waste disposal for pulp and paper mills, page 35). “My hands-on experience at Pan Pac has led to me being appointed ‘site owner’ for Pan Pac in the solid waste project. This will be an on-going relationship with Pan Pac and a good opportunity to strengthen the link between research and industry.”

“We found Suren’s time at Pan Pac highly beneficial as his ability to take theoretical principles into our practical environment and communicate them to a range of personnel was of great benefit. As a consequence he refined aspects of our operation that we now understand better to ensure a more controllable and logical plant operational base”.

Peter Campbell, Utilities Manager, Pan Pac


Substantial collaborative

research is reducing market access risks and has the ability to save $6.1 million per year in

fumigation costs

HIGHLIGHTS 27

RISK AND ADAPTATIONIO4 – IMPROVE NEW ZEALAND’S FOREST HEALTH AND PREPAREDNESS FOR BIOSECURITY INCURSIONS, FIRE AND CLIMATE CHANGE

KPI 7: REDUCE BIOTIC RISKProgress to achieve KPI. Reducing risk to New Zealand’s forests from new pests. (i) Developed potential control options to minimise the risk from red needle cast, a foliage disease of radiata pine; (ii) supported the industry to show that the causal agent of red needle cast Phytophthora pluvialis does not pose any threat to New Zealand’s log trade; (iii) supported MPI in an insect eradication programme; (iv) developed improved diagnostic tools for pests and diseases; (v) continued to collaborate across New Zealand and internationally to ensure New Zealand has the best capability to address any biosecurity risks.

NO THREAT POSED BY RED NEEDLE CAST

Investment: Scion Core Funding, NZFOA

Scion’s forest protection scientists have identified Phytophthora pluvialis as the causal agent of red needle cast, a disease which causes defoliation in radiata pine. The disease is viewed as moderately serious by growers; trees that experience repeated episodes of defoliation are likely to have slower growth rates than normal. Defoliation may lead to a 20-40 per cent reduction in annual diameter increment in the following year, however growth does recover.

Research, submitted for publication, has shown that P. pluvialis does not pose any threat to New Zealand’s log trade. Despite extensive sampling spores were not found to contaminate logs under natural conditions, and even when logs were artificially contaminated the viability of the spores rapidly declined.

The log trade is worth $1.7 billion per year and immediate trading bans due to biosecurity issues are a major concern to the industry. Research into red needle cast and other foliage diseases is given high priority by Scion and the forest industry, with results of the research to date being very favourable.

Scion is undertaking further work to develop a viable chemical control for red needle cast and an experimental programme is in place that will identify breeds of radiata pine with genetic resistance to the disease.

ERADICATING EUCALYPTUS LEAF BEETLE

Investment: Scion Core Funding, B3

Scion’s forest protection scientists have been working with MPI to eradicate the spread of the Eucalyptus leaf beetle, Paropsisterna beata.

The beetle defoliates the tree canopy, negatively impacting growth rate and subsequent pulp production. While the exact impact of a new invasive insect is difficult to quantify, MPI estimates the beetle could cause a reduction in pulp production by 1-2 per cent across New Zealand, meaning the pulp industry could face losses of up to $22.6 million annually.

The team has also determined an effective spray programme suitable to the terrain and canopy conditions of the area, using the AGDISP spray deposition model at Scion. The model uses combinations of droplet size, wind speed, spray release height and aircraft speed as input, and then outputs deposition profiles that scientists use to evaluate efficacy and drift. This information is used to develop a suitable application method.

At this stage the beetle is restricted to a small valley near Upper Hutt. Our scientists expect it to be eradicated after treatment in spring.

TACKLING BRONZE BUG THREAT


In March 2012, Scion’s diagnostic laboratory identified an insect new to New Zealand that has the potential to be a significant pest of eucalypts. The bronze bug, Thaumastocoris peregrinus was discovered in Auckland during routine surveillance conducted by MPI and partners.

This sap feeding bug causes leaf discoloration, or ‘winter bronzing’ which can lead to premature leaf drop and branch death. Potential hosts of the bug include over 30 species of eucalypts, but the most severely affected species to date appears to be Eucalyptus nicholii, a popular amenity tree. Apart from the United States, bronze bug has now been found in every major eucalypt growing region in the world.


We have been reviewing biological control options and stem injection as a method of reducing populations on specimen urban trees, and are continuing to support research on bronze bug ecology.

WINDOW OF OPPORTUNITY FOR QUARANTINE TREATMENTS

Investment: MBIE, STIMBR PGP, Scion Core Funding

Scion is leading a collaborative programme to investigate alternatives to methyl bromide in the quarantine treatment of logs. Because of its ozone depleting properties there is mounting global pressure to reduce emissions of methyl bromide to the atmosphere.

Our forest protection scientists have identified an opportunity to define fumigant-free windows during which there is little risk of pests on export logs. Using purpose-built ‘separator traps’ that allow the catch to be separated hourly or daily, scientists are able to match insect flight activities with meteorological conditions.

A national trapping network has been established at forest locations and ports throughout New Zealand to monitor pest species. The network is already having benefits and data has been used by MPI. Long term, these data will be used to develop a pest prediction model to establish treatment programmes based on risk.

In addition to a reduction in market access risks for our export forest products, this programme has the ability to deliver $6.1 million per year (based on 2011 export statistics) of savings through reduced fumigation costs, if a three month fumigant free period can be achieved.

Scion is working in collaboration with Plant and Food Research, the University of Canterbury and Bayesian Intelligence on the project, and with other stakeholders, STIMBR and MPI.

IMPROVED SURVEILLANCE FOR INVASIVE FOREST PESTS

Investment: Scion Core Funding, B3

Eradication of pest species such as the gypsy moth and painted apple moth, has cost the government tens of millions of dollars; if left untreated, their impact on the economy, for example on commercial forestry, horticulture and international trade, far outweighs that cost.

Scion has worked collaboratively to develop a multi-lure approach to pest trapping for the simultaneous surveillance of multiple species. This would provide more efficient detection of invasive forest pests and increase the likelihood of successful incursion response.

Surveillance trapping using species-specific attractants is a powerful method for the early detection of invasive species. The simultaneous surveillance of multiple species will reduce biosecurity risk without substantial additional cost. This approach has the potential to be implemented with existing surveillance activities for gypsy moth, a feared defoliator of numerous tree species often intercepted at New Zealand borders, for which a nationwide network of traps is already in place.

Results indicate that adding lures may reduce attraction and catch for some species but that the method is compatible for numerous other target species. Our initial work has been published and operational funding from MPI has been secured to further develop this concept in collaboration with Plant and Food Research.

This work was undertaken with our Better Border Biosecurity (B3) Collaboration partner Plant and Food Research, and several organisations overseas: FFPRI (Japan), INRA (France), Technical University of Lisbon (Portugal), University of Padua (Italy) and United States Department of Agriculture.

KPI 8: REDUCE ABIOTIC RISKProgress to achieve KPI. Reducing risk to New Zealand’s forests and rural environment to fire, wind and extreme rainfall and climate change. (i) Development of operational tools to help a forest growing company reduce the risk of wind damage associated within forest management activities; (ii) completion of an assessment of options for mitigating the risk of post-harvest debris flows resulting from high-intensity rainfall events; (iii) development of improved tools for adoption by rural fire stakeholders including updated fire behaviour models and a new model that predicts the rate of fire spread in crop stubble.

MANAGING THE RISK OF WIND DAMAGE

Investment: Timberlands Ltd

Scion has developed a new decision support tool to support the scheduling of production thinning that will help forest growers mitigate the risk of wind damage. Damage from strong winds can cause large value losses for forest growers. Silviculture activities that open up the stand, such as late thinning and harvesting, increase the risk of damage. As a result, few companies production thin their stands, preferring instead to thin-to-waste at an earlier stage.

Production thinning will enable growers to capitalise on the increased market demand for pulp and meet silvicultural objectives.

HIGHLIGHTS 29

The decision support tool synthesises knowledge from complex models that predict the risk of wind damage based on the location and structure of a stand, to create a set of simple decision rules that managers can use to determine whether or not a stand can be production thinned. Such effective management against wind damage therefore offers considerable financial savings to the industry.

ONE-STOP-SHOP FOR FIRE WEATHER INFORMATION

Investment: NZ Fire Service Commission (via the National Rural Fire Authority), MBIE

Scion and NIWA have developed a new national Fire Weather-System (FWSYS) that provides a ‘one-stop-shop’ for fire weather information, forecast data and danger conditions across the country. The system is the main tool used by the New Zealand Fire Service and rural fire managers to better monitor changing conditions and the potential for fire outbreaks.

Rural fires cost about $100 million per year (BERL The Economic Cost of Wildfires, 2009). The FWSYS will enable fire managers to better target fire prevention activities, such as permit requirements, forest closures and public education, as well as to heighten fire response readiness.

Provision of improved fire weather information to landowners and the public also increases their awareness of, and response to prevailing fire danger conditions, resulting in fewer fire starts and escapes, lower firefighting costs and reduced environmental impact.

The system is based on NIWA’s EcoConnect climate forecasting platform and utilises the latest research from Scion’s rural fire research group, including models of potential fire behaviour and improvements to the fire danger rating system.

PREPARING FOR THE FIRE SEASON

Investment: NRFA, DOC, Local Government, NZFOA, MBIE

Forecasting the severity of fire season weather conditions last November enabled New Zealand’s rural fire authorities to be well prepared for the summer season’s fire risks.

The rural fire research team led the production of a Seasonal Fire Potential Assessment for the country. Collating information on current and predicted conditions, the team was able to inform fire managers, the media and general public on fire weather potential over the coming summer. The outlook was updated in January with revised seasonal climate forecasts from NIWA, together with information following the spate of fires in Auckland, Northland and Canterbury.

As a result, fire agencies undertook more targeted fire prevention activities and strategically positioned firefighting resources in high risk areas.

The project was a collaborative effort between Scion, NIWA and NRFA in association with DOC and Rural Fire Authorities.

FIRE BEHAVIOUR MODELS – TOOLS AND APPS IMPROVE SAFETY

Investment: MBIE, rural fire end-users, PSAF

Fire ‘app’ funding: FRFANZ

Improved fire behaviour models for estimating fuel loads in grass and shrub vegetation types have been developed along with a new model that predicts the rate of fire spread in crop stubble. The models were produced using the latest data collected from experimental burning and other biomass sampling, and will enable fire managers to develop more effective and efficient fire control strategies.

The fire behaviour prediction tools, the Field Manual for Predicting Fire Behaviour in New Zealand Fuels and the Fire Behaviour Toolkit calculator software and smartphone applications have been updated to incorporate these improved models.

The latest smart ‘app’, developed in conjunction with Haumohio Software, provides firefighters with a further tool for predicting fire behaviour in remote field situations. The availability of a fire behaviour calculator for smartphones enables farmers and landowners to predict fire behaviour more accurately, thereby reducing the risks associated with burn-offs. The toolkit smart app is available in both Android and Apple format.


BUILDING RESILIENCE TO THE IMPACTS OF CLIMATE CHANGE

Investment: MPI

The Waiapu River has the highest level of sediment loading of any river in the country. Previous strategies to re-forest areas of the catchment that are prone to erosion have not been as successful as hoped, mainly due to lack of resourcing along with wider issues such as the on-going loss of human and social capital.

Scion’s environmental scientists are exploring ways to build community resilience to the impacts of extreme weather events associated with climate change. To design practical strategies, they have focused on the Waiapu catchment on the East Coast, one of the most vulnerable communities in New Zealand.

The Waiapu catchment is of considerable spiritual, cultural and economic significance to Nga–ti Porou. Scion is working alongside the community to develop an integrated afforestation programme that will provide employment for local people, opportunities for innovation, entrepreneurship and regional economic development, and that embraces Nga–ti Porou’s aspirations for economic independence.

IO4 – www.scionresearch.com/impact/biosecurity-fire-and- climate-change

SECONDMENT

HIGHLIGHTS 31

DEPARTMENT OF CONSERVATION

Being one step ahead of rural fires

Rural Fire Authorities in Canterbury have a better understanding of fire potential under different fire danger ratings as a result of a 10-day secondment to DOC by Scion’s fire scientist, Veronica Clifford.

Veronica conducted fire growth modelling scenarios for use in strategic tactical fire management plans (STFMP) using fire growth simulation software, Prometheus. This Canadian software has been adapted by Scion’s Rural Fire Research Team for New Zealand conditions. It estimates fire spread based on fuel type, weather conditions, topography and New Zealand fire behaviour models. The outcome is a set of predetermined response actions based on fire danger rating.

Using Prometheus, Veronica ran over 200 fire growth simulations for the Canterbury region. The data are being used to help determine better responses to rural fires.

Rural Fire Authorities have been able to use the results to identify resource requirements for different fire danger levels and assess the effect of time elapsed since ignition, on containment. They will also be able to justify appropriate fire reduction activities if early response is not possible.

Veronica has been able to demonstrate the effectiveness of Prometheus to fire managers and develop tutorials for its use, while testing the software for the developers.

Fire managers will be able to use the GIS-based growth model to predict the development and spread of fires in the New Zealand environment, and to support operational and strategic fire management decision-making in such things as suppression strategies, spread potential and post-fire assessment.

“The Rural Fire Authorities in Canterbury are grateful for Veronica’s secondment as it was useful to have a specialist from Scion complete the fire growth simulations and maps for each area plan,” says Heather Wakelin, Technical Support Officer at DOC.

“Prometheus was used to significantly improve the STFMP process. Predetermined response planning can be done using simple fire modelling equations, but better accuracy was achieved by using Prometheus to simulate fire growth across the landscape. It accounted for terrain and fuel type, enabling response to be targeted to a specific area or location on the ground.”


TERAXTM technology could save regional

councils approximately $80 million in landfill costs over 20 years

HIGHLIGHTS 33

LICENCE TO OPERATEIO5 – ENSURE THE NEW ZEALAND FOREST INDUSTRY’S LICENCE TO OPERATE DOMESTICALLY AND INTERNATIONALLY AND ENHANCE ENVIRONMENTAL PERFORMANCE.

KPI 9: FORESTRY LICENCE TO OPERATEProgress to achieve KPI. Supporting forestry companies to enable them to implement best practice in sustainable management of their forests. (i) Development of a forestry information portal to support the sustainable management and environmental certification of New Zealand’s planted forests; (ii) progress on the validation of biodiversity measures from LiDAR (a form of remote sensing) derived parameters of forest structure and condition; (iii) significant progress in supporting the forest industry to comply with FSC requirements for herbicide use; (iv) progress on development and validation of the spatial economic model known as the Forest Investment Finder, which provides forest growers and policy makers with information on the public and private benefits of afforestation; and (v) a highly successful one-day forum on integrating forest ecosystem services into policy with over 40 delegates from central and local government, CRIs, universities, and contributors from the USDA Forest Service and Australia’s CSIRO.

THE BENEFITS OF AFFORESTATION FOR PUBLIC AND PRIVATE USE

Investment: Scion Core Funding, FFR, MBIE

New Zealand’s planted forests provide valuable ecosystem services. Some, for example, wood, fibre and carbon sequestration have market value and are accounted for in policy. Others such as erosion prevention, recreation and biodiversity are difficult to quantify and their value has been largely overlooked until now.

Scion resource economists developed the Forest Investment Finder (FIF), a type of spatial economic model, to estimate the private (to the landowner) and public net benefits associated with afforestation.

In collaboration with the University of Western Australia and AgResearch, the research team has used the model to identify areas in New Zealand, such as the erosion-prone East Coast, where afforestation will provide significant public net benefits through, for example, reducing erosion and flooding. Site-specific policies can then be established for landowners to encourage the provision of benefits. These findings will help shape government and industry’s future afforestation policies, and provide a valuable evaluation tool for investors.

The FIF model is currently being used by MfE to estimate the profitability of plantation forests in the Waikato, and is gaining interest from other national agencies, regional councils and forest owners.

SCION APPEALS AGAINST DUPLICATION OF GM REGULATION

Evaluation of genetically modified (GM) trees under Environment Protection Authority approved contained field trials is of high importance to forest growers, who want robust evidence of GM tree benefits under New Zealand conditions before seeking commercial release.

Scion has lodged an appeal with the Environment Court against inclusion of material in Bay of Plenty Regional Council’s Regional Policy Statement (RPS) that would see the duplication of regulatory processes and associated costs involving genetic modification research.

Council has included provisions in the RPS that will likely require territorial authorities within the region to duplicate the regulatory framework operated by central government via the EPA and Hazardous Substances and New Organisms Act (HSNO) 1996.

The additional costs, time and uncertainty involved to duplicate applications would likely deter further research and development, and limit the availability of potentially beneficial technologies to industry, particularly forestry.

DETERMINING THE LEVEL OF WILDING CONIFER RISK

Investment: SFF, NZ WCMG

Many stakeholders are concerned about conifer wildings, especially South Island forest growers where the risk of wilding spread from managed plantations is affecting growers’ freedom to operate and could generate potential liabilities.

Wilding conifers affect the composition of vegetation, limiting land use and function. They grow faster and taller than low-stature indigenous vegetation, threatening indigenous ecosystems such as tussock grasslands, alpine ecosystems, wetlands, riparian land and coastlands.


The extent and severity of wilding affected areas is not well known; it is thought up to 1.2 million hectares throughout New Zealand have some level of infestation. Clear quantitative data are lacking and long-term studies are needed to make informed control decisions.

Scion, in partnership with the New Zealand Wilding Conifer Management Group*, is carrying out a nationwide assessment of affected areas using aerial photography to assess the current situation. Our priority is to better understand issues facing landowners in the future, and develop long-term solutions to managing the problem.

The work of NZ WCMG this year has contributed to the development of a national wilding management strategy by MPI.

*NZ WCMG includes Scion, MPI, DOC, LINZ, Landcorp Farming, regional territorial authorities, and farmers and forest companies. Some collaboration exists

with Landcare Research.

INDIGENOUS TREES FOR FARM RIPARIAN ZONES

Investment: Scion Core Funding, FFR, MBIE, Tane’s Tree Trust, Auckland Council

Establishing native forest is expensive, predominantly due to the cost of seedlings raised in containers.

Planting trials by forest management scientists, in collaboration with Tane’s Tree Trust, Mahurangi Action and other interest groups, have successfully shown establishment costs can be reduced by up to half using bare-root seedlings of selected native shrub hardwood species.

The trials compared the performance, handling and relative costs between bare-root transplants, seedlings raised in PB3 planter bags and those in Hillson root trainers. Results indicate that bare-root native shrubs have similar survival and growth rates to those in PB3 containers. Smaller root trainer stock showed less favourable results.

Subject to increased production of bare-root natives from nurseries, this would provide a cost-effective solution for dairy farmers contracted to Fonterra, who may be required to establish riparian zones by 2030 as part of their supply contract.

MINIMISING THE ENVIRONMENTAL IMPACT OF WEED CONTROL

Investment: MBIE, FSC Cluster Group, FFR, SFF

Environmental certification by the Forest Stewardship Council (FSC) requires a reduction in chemical use in plantation forests. This impacts on the forest industry’s current dependence on chemicals for cost-effective weed control, critical to forest management.

In partnership with MPI and FSC Cluster Group, Scion implemented field trials in spring 2012 to screen a number of herbicide mixes for their potential to replace chemicals previously rated hazardous by the FSC – terbuthylazine and hexazinone.

The status of terbuthylazine with regards to the FSC is still in question, and trial results indicate that its use in combination with alternatives to hexazinone will potentially provide acceptable weed control.

Subject to further testing, this result provides the forest industry with possible chemical weed control options that are compliant with FSC certification criteria.

KPI 10: WOOD MANUFACTURING LICENCE TO OPERATEProgress to achieve KPI. Providing tools and technologies to assist New Zealand’s wood and wood fibre manufacturing companies to meet Best Available Technology Economically Achievable. (i) Development and scale-up of proprietary environmental technology platforms; (ii) addressing generic issues across the pulp and paper industry regarding diversion of organic wastes from landfills and reducing receiving water impacts; (iii) adoption of industrial symbiosis concepts to maximise use and re-use of waste streams across regional clusters of industries; (iv) commercial scale-up of the TERAX™ technology to substantially reduce land fill from organic biowastes.

HIGHLIGHTS 35

SAFER WASTE DISPOSAL FOR PULP AND PAPER MILLS

Investment: Scion Core Funding, Waste Minimisation Fund, CHH, Pan Pac, WPI

Pulp and paper mills are large producers of organic and inorganic waste. This is currently sent to landfill.

This year, Scion’s Clean Technologies Team, with global project management firm Sinclair Knight Merz, has been working with three pulp and paper companies to explore alternative solutions to landfill disposal for their solid waste. These companies represent five of the seven pulp and paper mills in New Zealand.

An assessment of the mills involved in this study indicates that there is the potential to reduce solid waste going to landfill by approximately 25,000 tonnes each year. Scion has begun exploring options for diversion, including novel agricultural uses for the ash generated at these sites.

REDUCING COLOUR FORMATION IN WASTEWATER

Investment: CHH, Norske Skög Tasman

Scion’s work into wastewater quality for the pulp and paper industry has helped reduce the amount of colour released from mill wastewater treatment systems.

Colour formed during the treatment of pulp and paper wastewater has been difficult for mills to manage despite considerable effort, impacting on the aesthetic values of receiving waterways.

Detailed analysis of mill wastewater treatment systems at Scion provided the foundation for new management regimes to reduce the level of colour developed during biological treatment.

Mill sites taking up recommendations from the research have lowered wastewater treatment costs and continue to maintain reduced colour levels, a critical requirement for their discharge resource consents.

KPI 11: INCREASE WOOD PRODUCT UPTAKEProgress to achieve KPI. Providing robust technical information to support standards development and systems innovation in the wood and bio-based product manufacturing sectors. (i) Promoted harmonisation of standards between Australia and New Zealand by providing technical support for the inclusion of a new method for testing timber for H3; (ii) developed a new modified testing method for H1.2 applications; (iii) assisted Standards NZ to amend the New Zealand Standard 3640:2003 Chemical preservation of round and sawn timber; (iv) completed the Woodscape study with industry to provide tools to evaluate wood processing options for New Zealand.

COST EFFECTIVE SOLUTIONS FOR REPAIRING LEAKY BUILDINGS

Investment: MBIE

A method for improving the durability of untreated or non-compliant timber framing in leaky buildings, onsite, has been developed at Scion. This will help towards more cost-effective repair of leaky buildings, benefiting both builder and owner.

Applying boron glycol preservative treatment to three or four exposed faces of timber has proven to be effective in improving the durability of sound timber that is either untreated, or does not meet current treatment requirements.

Where pieces of timber abut, for example, multiple studs, corners and under lintels, our research shows that two coats of boron glycol preservative brushed on exposed sides, in conjunction with injecting the treatment into the interface between the timbers, meets the requirements for hazard class timber.

REVISED WOOD TREATMENT STANDARDS OPEN THE DOOR FOR GLOBAL MARKETS

Investment: Scion Core Funding, Commercial

The wood preservation industry is constantly seeking to develop new treatments that enable radiata pine to be used in high hazard areas, such as exterior cladding or foundation piles, that have less impact on people and the environment.

The process to introduce new treatments into the market is rigorous. This process is overseen by a committee of technical experts and affected parties, including a Scion representative.

Following a detailed review of standards for the chemical preservation of sawn timber (NZS 3640), technical amendments have been made to include new benign treatment systems. The systems will enable New Zealand to export treated radiata pine to European and American markets where regulations previously prohibited many of our treated wood products.

IMPROVED DURABILITY TESTING

Investment: Scion Core Funding, CSIRO

Establishing a product’s durability is the main impediment to the development of new wood protection systems. Industry relies on test methodologies to provide rapid proof of durability.


A survey of existing H3 (above-ground and outdoor) wood durability tests was conducted by our wood durability scientists, and various new options were trialled throughout Australia and New Zealand covering a range of conditions over four years.

Three new test methods were found to be reliable and faster than some existing methods. Approval from the Australasian Wood Preservation Committee (AWPC) is granted for inclusion of the new test methods and amendment is underway in the ‘Protocols for Assessment of Wood Preservatives’.

Scion has also proposed an ‘I’ frame test method to replace the current wall frame cavity test for hazard class H1.2 testing. Wall frame cavity method is a costly and longer test method compared to the ‘I’ frame test. The AWPC members are discussing the findings. H1.2 is an indoor hazard where timber is protected from weather but there may be some exposure to moisture, for example, framing timber.

Reducing product testing time will allow industry to obtain greater and faster returns on their investment in wood protection systems, and increase their response time to changes in preservation standards. Faster return on investment will also encourage more industry innovation in wood protection technologies.

DEMONSTRATING THE COMMERCIAL POTENTIAL OF TERAXTM TECHNOLOGY

Investment: approximately $10.5 million committed to R&D since 2005

Demonstration Plant: MfE, RDC

Terax Limited Partnership: Scion Core Funding, RDC, PSAF

A $4.7 million grant from MfE is supporting the design and construction of Rotorua District Council’s (RDC) first commercial-scale treatment plant using TERAXTM waste conversion technology. The process converts sewage sludge into energy and sterile chemical products, and the grant will enable further research into adapting the process to treat solid organic landfill waste. Design of the plant, which will be sited at RDC’s wastewater treatment facility, has commenced.

TERAXTM technology, developed by Scion in partnership with RDC, can reduce the organic fraction of landfill by 90 per cent and greenhouse gases by up to 70 per cent. At the same time, it produces nitrogen and phosphorous rich fertilisers, and acetic acid that can be used to improve the economics of wastewater treatment.

An international patent application for the technology has been filed, and Terax LP and Terax 2013 Ltd were established in partnership with RDC to commercialise the technology.

TERAXTM technology could save regional councils approximately $80 million in landfill costs over 20 years, and displace about $50 million in imported engineering services relative to purchasing foreign sludge destruction technologies. The global opportunity for exporting this technology is much larger.

Construction of the demonstration plant is due to start in 2014. Scion is now working to extend application of this technology to pulp and paper and treated timber waste streams.

IO5 – www.scionresearch.com/impact/market-environmental-performance

HIGHLIGHTS 37

BIOENERGY AND ENERGY SECURITYIO6 – INCREASE NEW ZEALAND’S ENERGY SECURITY THROUGH THE EXPANDED UTILISATION OF FOREST BIOMASS FOR ENERGY

KPI 12: BIOENERGYProgress to achieve KPI. Enabled at least one commercial partner to adapt and test to pilot scale a bioenergy technology concept. (i) Supported Norske Skög and Z Energy to develop their “Stump to Pump” initiative; (ii) continued to build international alliances and develop New Zealand relevant bioenergy platforms to support industry and regional development agencies in evaluating bioenergy options; (iii) the concept of biofuels/bioenergy production is now an integrated part of wood processing value chains and strategies, as evidenced in the Woodco Strategic Action Plan.

TAPPING INTO NATURE FOR GREATER EFFICIENCY


Scion has identified an opportunity for New Zealand’s wood processing industry to gain a competitive advantage by integrating with geothermal energy in the central North Island.

Integrated wood-processing clusters will achieve greater efficiency through sharing resources and utilising the area’s largely untapped geothermal energy. This will enhance the industry’s potential to develop new high-value wood products, and help realise its goal of doubling export earnings to $12 billion by 2022.

Scion is developing a tool to design highly-efficient integrated wood-processing clusters.

The tool was used by Scion to provide an analysis of the advantages of Kawerau as a wood processing centre and the benefits of using geothermal energy. This work currently focuses on the Bay of Plenty-Taupo region and builds on Scion’s energy and techno-economic analysis capability.

The symposium provided participants the opportunity to understand the biofuel research landscape in New Zealand, collaborate with other domestic research groups, receive an update on global developments from international experts and network with researchers, government and industry representatives. Technical highlights included Scion’s overviews of our bioenergy research and commercialisation experiences.

STUMP TO PUMP GAINS TRACTION

Investment: PGP, Norske Skög, Z Energy, Air New Zealand

A $6.75 million investment from the MPI Primary Growth Partnership will be used to co-fund the first phase of the ‘Stump to Pump’ programme to assess the potential for creating biofuels from woody biomass. Equivalent funding from programme partners Norske Skög and Z Energy will provide total funding of $13.5 million for the project.

The Stump to Pump programme is the most significant biofuels initiative in New Zealand’s history. It aims to create new high-value markets for forestry and wood processing residuals. The business case for this programme suggests that if this technology can be commercialised, the estimated economic benefit for New Zealand over the next 20–25 years is an annual increase in GDP of up to $1 billion and the creation of 1,200 direct jobs.

Initial funding will be used over 14 months to assess the technical and financial feasibility of creating biofuels from forestry and wood processing residues, and determine the commercial viability of establishing a modular test plant for the process. Scion will be providing research and technology support for the feasibility assessment.

IO4 – www.scionresearch.com/impact/bioenergy

Partners in this project include GNS Science, Bay of Connections, Kawerau District Council, Industrial Symbiosis Kawerau, Ngati Whatua, Norske Skög Tasman, Rotorua District Council, Sequel Lumber, Te Arawa, Tuwharetoa and Waikato Regional Council.

ADVANCED BIOFUELS RESEARCH NETWORK GAINING VISIBILITY


In 2010, Scion led the establishment of the Advanced Biofuels Research Network (ABRN) to coordinate bioenergy research and accelerate technology development across New Zealand. Scion remains central to this network, co-organising the annual ABRN Science Symposium and managing the website that went live in December.

Scion sponsored the 3rd ABRN Science Symposium in association with the University of Canterbury in November. The symposium theme was ‘The Role of Research in Scale-Up of Technology’ and featured keynote presentations by Kees Kwant from NL Agency (the Dutch agency for innovation and sustainability) and Tony Johnson from Beca-AMEC.


OUR COMMUNITIES

WORKING WITH MA–ORIThe conclusion of the Treaty of Waitangi settlements will see about 40 per cent of forest land, including some forests, in Ma–ori ownership. Ma–ori are increasingly interested in exploring a more active role in forestry, which could see an expansion of the forestry and wood processing industries in New Zealand and an increasing contribution by Ma–ori to the national economy.

Scion has a plan in place to help Ma–ori increase their social and economic wealth through forestry and sustainable land management. Our Ma–ori strategic advisory board, Nga Rangatira Ro–pu, provides advice on Scion’s Te Papa Tipu Ma–ori Plan and has reinforced our need to work with Ma–ori towards greater collaboration with the science sector and assisting Ma–ori to assume a more active role in managing their resources.

We are constantly seeking to foster the exchange of science and technology with that of understanding Ma–ori’s aspirations for their land. Partnerships are of real value and help guide the direction of our science for mutual benefit. This is facilitated by our efforts to improve staff knowledge of tikanga and proficiency in Te Reo.

Scion has built partnerships with several iwi groups and is continuing to do so with others. For example, we are working with Te Tai Tokerau Forestry Innovation in Northland to increase land value and generate employment through a forestry-based infrastructure. The inclusion of iconic indigenous species such as kauri and totara, are an important element of that project.

As key stakeholders in the future of forestry, the decisions Ma–ori make will help shape the future of New Zealand’s economy. Scion’s forestry and wood processing science and technology will help support Ma–ori make decisions that will provide return on investment, employment and the opportunity to reinvest in their land while meeting their social and economic aspirations.

MA–ORI ENGAGEMENT IS ONGOING

• Indigenous forestry specialist Greg Steward presented to MPI’s North Island Indigenous Forest Unit and Ma–ori liaison staff on research and results for kauri and totara.

• The forest genetics team worked with APR Consultants (Rotorua) on advising Nga–ti Whare Holdings Ltd in Minginui (Te Urewera) on their plans to develop an indigenous tree nursery. While small at this stage, this is an opportunity to showcase Scion’s indigenous nursery expertise and form closer links with iwi.

• Collaborations included ongoing work with Te Tai Tokerau; Central North Island Iwi Holdings Limited (CNIIHL); the Waiapu Research Team including Nga–ti Porou representatives; and Maraeroa Holdings Ltd regarding application rates of calcium for their ginseng plantations. Scion also presented at a ginseng seminar day at Pa Harakeke, organised by Maraeroa C Incorporation, to share new information about developments of the ginseng industry in the central North Island.

• Scion participated in the hui on Bay of Connections – Ma–ori Economic Development Strategy held across the Bay of Plenty.

• In collaboration with Nga–ti Pikiao, a totara planting site was identified on the Pukahukiwi-Kaokaoroa block at the northern edge of Lake Rotoiti, east of Rotorua, for the establishment of the first progeny trial of totara. Seedlings were planted by pupils from the nearby Whangamarino School, the Trustees of the Pukahukiwi-Kaokaoroa Trust and Scion. Over 1,200 totara were planted and the seedlings each student planted were recorded as part of the next generation’s connection with this totara stand as it develops over the coming decades.

MA–ORI INTERNS

To encourage more involvement by Ma–ori in science, three summer internships were offered to Ma–ori students: Grace Stone, Wiremu Ruru and Sam Nugent.

After completing a degree in Environmental Management at Te Whare Wa–nanga O Aotearoa, Rotorua, at the end of 2012, Grace Stone joined Scion for three months under the guidance of social research scientist Lisa Langer. Her research project was ‘Te Ahi I Te Ao Ma–ori’ or Fire from a Ma–ori perspective, and included traditional, ritual and cultural use of fire, beginning from pre-colonisation Ma–ori to present day use. With no detailed studies on Ma–ori and fire in the rural landscape more knowledge is required to understand Ma–ori and their use of fire, and the risks relating to fire in the landscape or outside the home before an education programme can be designed.

HIGHLIGHTS 39

Grace’s work provides an understanding of historic and present day use of fire by Ma–ori, and provides background knowledge to allow the development of strategies to improve dialogue between Ma–ori and fire managers to plan more effective preparedness and mitigation measures. Grace and Lisa submitted a paper on Te Ahi I Te Ao Ma–ori: Fire use: Ma–ori in rural areas in Aotearoa, New Zealand to MAI Journal: A New Zealand Journal of Indigenous Scholarship.

Wiremu Ruru was in his final year of a Diploma of Forestry Operations at Rotorua’s Waiariki Institute of Technology when he applied for the internship. He also holds a Bachelor of Commerce from Otago University. Like Grace, Wiremu worked in the Forest Environment and Economics Team. Supported by team manager Tim Barnard and economists Luke Barry and Richard Yao, Wiremu’s research project was on alternative land use with a focus on recreational hunting and how the cultural, traditional, environmental and economic values of this pastime can impact forestry organisations.

Canterbury University engineering student Sam Nugent joined scientists working in the Wood Modification Team, guided by research leader Dr Warren Grigsby. Sam’s role was to assist in developing novel wood modification technologies using Scion’s supercritical carbon dioxide capability. This resulted in a wood treatment formulation evaluated at pilot-scale later in the year.

Previous recipient Jamaine Fraser (2009-10), was awarded a Masters in Design from Unitec Institute of Technology in Auckland at the end of 2012. The focus of Jamaine’s internship at Scion was on the indigenous design of Scion material and engineered biomaterial products.

OUR PLACE ON THE GLOBAL STAGEScion is adept at building national and international collaborations. We can assemble large, multi-disciplinary teams with the skills and resources to capitalise on opportunities and tackle challenges. By leveraging domestic and international networks, our scientists access the latest technologies and secure intellectual property for the benefit of New Zealand. This is critical if Scion is to remain innovative and competitive in global markets.

International recognition in 2012/2013 included:

Senior Scientist Steve Wakelin was selected by the Inter-governmental Panel on Climate Change (IPCC) Task Force Bureau on National Greenhouse Gas Inventories as a Lead Author for the writing of the 2013 Supplementary Methods and Good Practice Guidance Arising from the Kyoto Protocol.

Principal Scientist Dr Tim Payn chaired the 13th and 14th Montreal Process Technical Advisory Committee meetings in Russia and Japan focussing on soil and water issues in forestry and on the communication of sustainable forest management. Environmental planner Tim Barnard represented New Zealand at both meetings.

Also Dr Payn was invited to join the reviewers panel of Trees4Future, a European Commission-funded project that aims to bring together, federate and structure forest research infrastructures and services across all disciplines.

Forest Management Science Leader Dr John Moore gave a keynote address to the ForValueNet conference in Montreal. ForValueNet is a strategic network in the forestry area funded by the National Science and Engineering Research Council of Canada.

Dr Christine Todoroki was invited onto the panel to review the performance and significance of outputs of US Forest Service staff.

Dr Dave Cown was a member of the international review team that evaluated the Forest Research Institute of Malaysia’s research programmes.

Forest Protection Science Leader Lindsay Bulman participated in an expert team to develop a strategy to deal with Dothistroma needle blight in Great Britain.

Dr Elspeth MacRae, General Manager Manufacturing and Bioproducts, was on the organising committee for two international events:

• the Agricultural Biotechnology International Conference (ABIC) 2012 held in Rotorua in September. ABIC promotes innovation and the opportunity for continuous learning and networking within the biotechnology community. Scion co-sponsored the conference;

• the International Knowledge-Based Bioeconomy Forum (KBBE) held in Rotorua in September. The KBBE is a partnership between New Zealand, Australia, Canada and the European Commission and aims to foster collaboration and innovation in the bioeconomy sectors.


VISITS, EXCHANGES AND SABBATICALS

Emeritus Professor Ulrich Zimmermann, senior professor at the Biocenter of the University of Würzburg, Germany, visited Scion. He is an eminent authority on plant water relations and has authored around 500 publications and more than 120 patents.

Pablo Crespell, a senior researcher in the business analysis group at FPInnovations in Canada, completed a three-month secondment with Scion, during which he conducted research on cross laminated timber and other next generation wood building systems and their potential to meet the current and future needs of the residential and non-residential markets in New Zealand and Australia.

The forest genetics team strengthened their links with Forest Research UK through the visit to Scion in March by Dr Trevor Fenning. He is collaborating with Scion on the development of early screening technologies for disease resistant genotypes, a high priority for New Zealand forest growers.

Two COST (European Cooperation in Science and Technology) Actions sent young researchers on science sabbaticals to Scion. They worked on microscopic imaging of polysaccharides in wheat bran cell walls and impregnation of timber with bioplastics.

In addition, Scion participated in COST Action meetings relating to packaging, modifying timber, biosecurity risk, forest management decision support systems, and Dothistroma needle cast.

Two sabbaticals were awarded that strengthened Scion’s relationship with international research institutions:

• Dr Brenda Baillie hosted Dr Dan Neary of the Rocky Mountain Research Station, USDA Forest Service, for a month to work on the fate and cumulative effects of herbicides commonly used in forestry operations across a range of forest soils. Their research will assist the forest industry and FSC in making informed decisions on the fate of herbicides in the environment.

• Dr Lloyd Donaldson spent six weeks on a reciprocal visit to Dr Ksenija Radotic at the Institute for Multidisciplinary Research, University of Belgrade, Serbia, to continue a further aspect of their joint work on spectral imaging. They explored the relationship between lignin and carbohydrates in the plant cell wall. Dr Donaldson also attended the International Symposium on Wood Structure and Ecophysiology in Naples while away.

A number of Scion staff completed exchange trips with support from the European Commission’s International Research Staff Exchange Scheme (IRSES) under the TRANZFOR programme. TRANZFOR is a joint programme of scientific co-operation and research exchange involving five leading research organisations focussing on forests and climate change.

• Lisa Langer visited the Institute of Agronomy, University of Lisbon, Portugal. She was hosted by fire researcher Maria da Conceição Almeida Colaço, who was previously hosted by Scion’s Fire Research Group in Christchurch. Both are investigating the wildfire risk in urban-rural interface and rural communities and are studying the effective communication strategies and community resilience to understand, inform and educate New Zealand communities about wildfire risk and preparedness.

• Luke Barry, Loretta Garrett, Duncan Harrison and Dr Brenda Baillie, visited Edinburgh on an ecosystem services mission. They completed a paper in collaboration with Forest Research UK and the Technical University of Lisbon titled: ‘A new holistic ecosystem services assessment and management framework for sustainable development and decision-making based on experiences with Loch Katrine, Scotland’. They also attended the ‘Managing Forests for Ecosystem Services’ conference.

• Dr John Moore spent two months at the French National Institute for Agricultural Research (INRA) looking at integrated risk management, the impacts of forest management on the risk of wind damage and the potential impacts of intensification of forestry on risk.

• Dr Simeon Smaill spent three months at INRA adapting an existing Pinus radiata nutrient balance model for Pinus pinaster and also presented soil microbial research relevant to forest management to third year students at the University of Bordeaux, resulting in an invitation to give more lectures as part of a formal arrangement with the university.

• Dr Eckehard Brockerhoff visited Professor Hugh Evans at Forest Research UK to continue work on biosecurity risk management and systems approaches.

• Three scientists from INRA spent time at Scion during the year on projects as diverse as conserving Pacific forestry to soil enzyme activity for the biowastes programme.

HIGHLIGHTS 41

• Christian Pilaar spent two months in Bordeaux, France, working with the European Forest Institute (EFI) to extend their forest productivity computer models. He also spent a month with Forest Research UK in Edinburgh helping to migrate their Ecological Classification System to a web-based GIS environment, providing forest owners access to this decision support tool.

Other visits included:

• Murray Davis to the College of Geographical Sciences, Fuzhou Normal University, China.

• Dr Michael Watt to the Universities of Santiago and Concepción and the two main forest management companies, Arauco and Forestal Mininco, in Chile.

• Dr Lloyd Donaldson attended a COST Action on cell wall nanostructure in Edinburgh and visited BOKU University in Vienna. On a separate trip he spent two weeks in Beijing teaching students at the Beijing Forestry University and also visited the Korean Forest Research Institute in Seoul and Kyungpook University in Daegu, Korea.

• Dr Tripti Singh, wood durability specialist, was invited to South Korea to present a paper at the 6th Bioenergy and Biotechnology Symposium at Chonnam National University and to give presentations to staff and students at Kyungpook University, Daegu. She also gave an invited presentation at Johann Heinrich von Thünen Institute in Hamburg, Germany.

• Lindsay Bulman visited the Forestry and Agricultural Biotechnology Institute at the University of Pretoria to strengthen collaboration with Professor Mike Wingfield and his group.

• Dr Dzhamal Amishev and Spencer Hill led an international study tour looking at different approaches to managing the risk of post-harvest erosion on steep sites.

A WELL-CONNECTED ENTOMOLOGISTPrincipal Scientist Dr Eckehard Brockerhoff, an entomologist in the forest protection team, contributed significantly as an international leader in his area of expertise.

He was elected as International Union of Forest Research Organisations (IUFRO) Division 7 (Forest Health) coordinator from 2014 – 19. This includes a seat on the Board of IUFRO. He is also coordinator of the IUFRO Task Force on Biodiversity and Ecosystem Services.

Dr Brockerhoff gave an invited keynote address at the International Congress on Planted Forest in Pierroton, France, and also participated in a workshop on “Globalisation of the Live Plant Trade: Informing Efficient Strategies for Reducing Non-Native Pest Invasion Risk” at the National Socio-Environmental Synthesis Center (SESYNC) of the University of Maryland, in Annapolis, Maryland.

Four international visitors were hosted by Dr Brockerhoff during the year:

• Dr Hervé Jactel (from INRA, Pierroton, France) working on biodiversity effects on forest pest impacts (two months);

• Dr Massimo Faccoli and PhD student Fabio Chinellato (both from the University of Padua, Italy) working on bark beetle biology and effects of climate change (three months);

• Dr Andrew Liebhold (from the US Forest Service, West Virginia) working on impacts and management of invasive forest pests (two weeks).


POST-DOCTORAL RESEARCH

A post-doctoral fellowship was awarded to Juan Rodríguez Gamir to investigate the combined impact of water and nutrient stress on plant and root physiological processes of radiata pine clones under future drought conditions. The research will take place in both New Zealand and France, co-supervised by Dr Jianming Xue from Scion and Dr Jean-Christophe Domec from INRA.

OUR LOCAL COMMUNITIES

SCION HELPS DRIVE GROW ROTORUA

Chief Executive Dr Warren Parker was appointed to the inaugural Board of Directors for Grow Rotorua, a Rotorua District Council controlled economic development organisation. The organisation works collaboratively with the region’s key economic influencers to drive sustainable economic growth for the region through forestry, tourism, geothermal and other sources of renewable energy and agriculture, and promote Rotorua as a preferred life style destination.

CONNECTING THE BAY

Scion actively participated in Bay of Connections, the economic development strategy for the wider Bay of Plenty region. The strategy sets the direction for growth and employment in the wider Bay of Plenty region, particularly in the aquaculture, forestry and wood processing, freight logistics, energy sectors and Ma–ori development. Through the delivery of innovative research and technology transfer Scion helps open up new opportunities for commercial forestry, wood and fibre-based products, bio-energy and environmentally friendly technologies, as well as contributing to the environmental and social wellbeing of the region.

Dr Trevor Stuthridge, General Manager Sustainable Design, served as chairperson for the resources sub-committee, Energy Action Group, and as a member of the Forest and Wood Action Group, for Bay of Connections.

INDUSTRIAL SYMBIOSIS KAWERAU

Dr Stuthridge also chaired Industrial Symbiosis Kawerau, an industry and community based initiative to develop new investment opportunities in waste management, bio-based products, forestry and wood processing and geothermal industries.

Scion is helping develop a tool for designing highly-efficient integrated wood-processing clusters that leverage off the region’s vast geothermal energy resources. The project focuses on the Bay of Plenty-Taupo region and builds on Scion’s energy and techno-economic analysis capabilities.

HIGHLIGHTS 43

SCIENCE OUTREACH

HIGH IMPACT PUBLICATIONS

Scion provides high-quality science to solve forest industry problems and strategically position the industry for the future. Publication of papers in the top scientific journals confirms Scion’s international standing and visibility as a research institute. The annual weighted average H-index for Scion publications during the year was 45.41, which is a little less than the previous two years as shown in the figure below.

H-I

nd

ex

Year Ending 30 June

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

55

50

45

40

35

30

25

20

15

AND TECHNOLOGY TRANSLATION

Direct engagement with stakeholders enables Scion to provide leadership in developing new opportunities and accelerates the uptake of new knowledge and technologies. Scion engages with its varied audiences in a number of ways from publications to direct contact.

During 2012 – 13, Scion scientists had 133 papers published in peer-reviewed publications. Listed below are the top five papers based on the journal’s H-index, which is an international measure of the impact of scholarly publications.

• Analyses of BlueSky Gateway PM 2.5 predictions during the 2007 southern and 2008 northern California fires by Strand, T. M., Larkin, N., Craig, K. J., Raffuse, S., Sullivan, D., Solomon, R., Rorig, M., Wheeler, N., & Pryden, D. Journal of Geophysical Research D: Atmospheres, 117 (2012). D17301.

• Habitat filtering by landscape and local forest composition in native and exotic New Zealand birds by Barnagaud, J.-Y., Barbaro, L., Papaïx, J., Deconchat, M., & Brockerhoff, E. G. Ecology. (2013). In press.

• Subcellular distribution of metals within Brassica chinensis L. in response to elevated lead and chromium stress by Wu, Z., McGrouther, K., Chen, D., Wu, W., & Wang, H. Journal of Agricultural and Food Chemistry, 61(2013), 4715-4722.

• Tight-binding approach to overdamped Brownian motion on a multidimensional tilted periodic potential by Challis, K. J., & Jack, M. W. Physical Review E – Statistical, Nonlinear, and Soft Matter Physics, 87(2013). #052102.

• Key features of the seed germination response to high temperatures by Watt, M. S., & Bloomberg, M. New Phytologist, 196(2012), 332-336.

THE NEW ZEALAND JOURNAL OF FORESTRY SCIENCE PARTNERS WITH SPRINGER

After 40 years of being published in-house by Scion, the New Zealand Journal of Forestry Science (NZJFS) has joined forces with international publishing giant, Springer, to increase global reach and impact.


The NZJFS is now freely available online through SpringerLink, with Scion retaining editorial management. Individual papers are published online as soon as they are ready, with one volume of the journal published each year.

OUTREACH TO INDUSTRY

FFR WORKSHOPS HIT THE SPOT

A new series of workshops held by Scion for FFR members proved to be highly successful in putting the latest scientific knowledge straight into the hands of commercial foresters. The workshops, delivered in the first six months of the year, were designed to stimulate and extend learning.

More than 80 people attended the practical and highly interactive workshops, which included presentations by industry experts, group exercises where forestry theory was applied to real-life situations, and field visits.

Feedback was overwhelmingly positive, with comments such as “the recent silvicultural workshop in Christchurch was fantastic and we need more events like this”. Another benefit of the workshops was recognition by the New Zealand Institute of Forestry as counting towards participants’ continuing professional development.

FOREST ECOSYSTEM SERVICES FORUM

New Zealand’s 1.7 million hectares of planted forests constitute a productive ecosystem mainly recognised for the provision of wood and fibre. However, the value of other services such as recreation and habitat provision remains unaccounted for and is usually ignored in policy decision making.

Forest ecosystem services is a growing area of research attracting widespread interest. To address this information need, Scion took the lead by organising a Wellington-based forum in May to identify key issues, roadblocks and opportunities for enhancing New Zealand’s understanding and use of ecosystem services in decision making. More than 40 delegates participated in the workshop representing government agencies, regional councils, other CRIs, forest industry and end-users, universities and foreign institutions.

FOREST BIOSECURITY WORKSHOP

Over two days in March Scion held the 11th Annual Forest Biosecurity Workshop. An initiative of the Forest Owners Association and MPI, the workshops are an excellent way to engage stakeholders in new approaches to forest biosecurity issues. This year the workshop focused on solving foliar diseases, and domestic and international speakers had much to offer during discussions. The impact on radiata pine is around $150 million per year in lost productivity and invasive pathogens are causing new problems globally.

Poster presentations on day one were a very successful format in enabling in-depth discussions between scientists and end-users, from forest managers to senior executives. The workshop also included time for a revision of the forest biosecurity research strategy.

BUILDING PRODUCTIVITY WORKSHOPS

Two series of workshops to examine the lifecycle of buildings were jointly hosted by Scion and BRANZ. Held in Rotorua, Auckland, Wellington and Christchurch they collectively attracted 110 attendees. Input from these workshops helped to identify the types of interventions that can be applied to influence increases in productivity for the construction life cycle. This research is now being used by MBIE in its planning for housing affordability and construction sector productivity work.

FRUCOR VISIT TO SCION

Staff from Australasian drinks company Frucor visited Scion in December to gain a better understanding of the work we do. Most of the visitors had a food technology or science background and were particularly interested in our packaging work. The group toured the extrusion and packaging laboratories and Scion’s new biodegradation test facility. They were also given demonstrations of paper-making, packaging treatments and biofoams.

EDUCATIONAL OUTREACH

CONTRIBUTING TO BIOLOGY TEACHERS’ PROFESSIONAL DEVELOPMENT

During May Scion participated in professional development (PD) days run by the Maurice Wilkins Centre for Molecular Biodiscovery, University of Auckland. These days focused on content for the new secondary school curriculum, including human manipulation of genetic transfer and its biological implications. Drs Christian Walter and Glenn Thorlby presented on transgenic trees to more than 400 teachers in four locations including Scion’s Rotorua campus. “Many thousands of students will now be getting taught the realities of GM rather than the myth,” said organiser Professor Peter Shepherd.

HIGHLIGHTS 45

BIOSPIFE IS A LEARNING TOOL ON THE SCIENCE LEARNING HUB

Polymer scientist Dr Martin Markotsis worked with kiwifruit exporter ZESPRI and the University of Waikato to produce a series of videos about the development of an environmentally friendly biospife (spoon-knife). The videos are available on the Science Learning Hub website, which is produced by educators, in collaboration with New Zealand scientists, to provide resources for students in years 2-10. The hub is funded by MBIE and managed by the University of Waikato.

FUELLING LEARNING THROUGH SCHOOL VISITS

Throughout the year Scion hosted a number of visits from secondary schools in the region. Scion takes on this responsibility earnestly, and programmes were tailored to the students’ learning outcomes to provide a real world context to classroom learning. Examples included:

• Over three days in November, 45 students from Rotorua schools’ Gifted Kids Programme visited to learn about plant classification and bacterial classification techniques.

• a group from Morrinsville College in March visited our timber engineering and bioplastics laboratories to further their study on the properties of wood and other materials.

• senior students from Reporoa College visited in May as part of their work towards the spectroscopy achievement standard level 3 in the national chemistry curriculum.

REACHING THE COMMUNITY

MAKING TELEVISION

Project Ma–tauranga

Science and Ma–ori knowledge combine in Maraeroa C Incorporation’s ginseng growing trial, which was presented on Ma–ori Television’s Project Ma–tauranga programme in August. The series celebrated Ma–ori innovation in the science sector. In an episode that focused on minimising the impact on papatuanuku (the land) from forestry activities, Scion scientists Drs Jenny Grace and Haydon Jones showed how their science contributed to creating viable ginseng crops within a pine forest that could lead to new revenue streams and reinvigorate the soil.

Rural Delivery

In November viewers of TVNZ’s “Rural Delivery” programme got to see how Scion scientists are using new technologies to see what happens inside a tree. Funded by FFR, the new sampling approach allows variation in wood properties to be measured at a scale that drives end product performance.

FASCINATION OF PLANTS DAY

Fascination of Plants Day is an international project driven by the European Plant Science Organisation (EPSO), of which Scion is a member and representative of New Zealand’s Crown Research Institutes. Scion developed new educational resources to mark the event and for two weeks in May, the Rotorua District Library featured a Scion display on the importance of trees to the environment, including explanation of the carbon cycle. The display contained hands-on activities for young people to explore the natural world around them.

SPONSORSHIP OF CONFERENCES AND EVENTSA range of events was sponsored during the year to promote Scion’s science and technology capabilities. Conferences are a valuable forum for building networks and exchanging knowledge within and between the science and end-user communities. Scion scientists presented at many of the conferences below and also staffed trade displays.

• 13th International Symposium on Soil and Plant Analysis

• VII Southern Connection Congress 2013

• Agricultural Biotechnology International Conference 2012

• Bay of Plenty Science & Technology Fair

• Carbon Forestry 2012

• International Symposium on Biopolymers 2012

• New Zealand Ecological Society Annual Conference

• New Zealand Farm Forestry Association 57th Annual Conference

• New Zealand Institute of Forestry 2013 Conference

• New Zealand Land Treatment Collective Workshop

• New Zealand Wood Timber Design Awards

• Pine Manufacturers & Wood Processors Associations’ Conference 2012

• Rural Fire Fighter Challenge

• Plastics NZ Conference

• University of Waikato Department of Earth and Ocean Sciences Graduate Conference

• Water NZ Annual Conference and Expo

• World Conference on Timber Engineering Biennial Conference


OUR PEOPLE

Dr Oliver Chikumbo and his co-authors from BEACON (a centre for evolutionary computing) won the prestigious Wiley Practice Prize at the Multi-Criteria Decision Making Conference, held in Spain, for the best paper describing a real-life application of multiple criteria decision making.

Margaret Dick was awarded the New Zealand Plant Protection Society Medal for excellence in plant protection sciences. Both nationally and internationally recognised as an expert in forest pathology, in particular, for her work with Dutch elm disease and Phytophthora sp, she was awarded Emeritus status in May.

Dr Dave Cown was named a Fellow of the New Zealand Institute of Forestry. He was also presented with the Distinguished Service Award at the IUFRO Division 5 conference in Lisbon for his outstanding lifetime contribution to IUFRO as former IUFRO Board Member, and his expertise on wood quality and wood processing.

Robert Lei was one of 27 future leaders in the Vision 2050 project, run by the Sustainable Business Council. Vision 2050 is a global initiative to help business move towards sustainability.

Mark Riddell, Charlie Low and Graham West were presented Future Forests Research science awards by Nathan Guy, Associate Minister of Primary Industries.

Dr Jianming Xue received an award from the Chinese Society of Forestry for presenting one of 12 outstanding papers at the International Conference on Sustainable Forest Management Adapting to Climate Change in Beijing, China. The paper “Genetic variation in foliar δ13C in relation to radiata pine growth at a dry site – implication for using δ13C signature as a screening parameter for drought tolerant genotypes” was co-authored by Heidi Dungey, Peter Clinton, David Henley, Sylvie Niollet and Alan Leckie.

Scion’s Rural Fire Research Team was awarded Best Applied Paper by the International Association of Fire Safety Science. The team’s paper was titled “Fire behaviour prediction tools for fire managers – lessons learned from tools development in New Zealand”.

SONG OF THE KAURI

Song of the kauri, a New Zealand-made documentary was shown during the International Film Festival followed by general release in New Zealand. The movie discusses the science and economics behind resurrecting planted kauri forests, with an underlying philosophy that instruments made from kauri could become ambassadors for New Zealand’s trees. The movie contains interviews with musicians, economists and scientists, including Scion’s indigenous forestry specialist, Greg Steward.

AWARDS AND ACCOLADES

HIGHLIGHTS 47


FINANCIAL RESULTS SUMMARY

2011 Actual

2012 Actual

2013 Budget

2013 Actual

Revenue, $m 43.35 44.06 46.13 45.49

EBIT, $m 2.60 2.07 1.94 2.55

EBIT Margin 6.0% 4.7% 4.2% 5.6%

EBIT-R, $m 2.94 2.89 3.09 3.52

EBIT-R Margin 6.8% 6.6% 6.7% 7.7%

Total Assets, $m 37.70 40.01 41.02 41.52

Return on Equity 7.3% 6.0% 4.8% 5.8%

Equity Ratio 67.6% 68.8% 69.7% 69.6%

Gearing 0.0% 0.0% 0.0% 0.0%

Revenue: Includes science research, contract work for government and commercial clients, royalties and licence fees.

EBIT: Earnings before interest, tax and restructuring costs.

EBIT Margin: EBIT ÷ revenue.

EBIT-R: EBIT before reinvestment where reinvestment are amounts approved by the Minister.

EBIT-R Margin: EBIT-R ÷ revenue.

50%

54%

42%

8%

2%7%

5%

3%3% 1% 5%

20%

1%

MBIE

EMPLOYEE REMUNERATION

GOVERNMENT DEPARTMENT

TRAINING AND RECRUITMENT

CONSUMABLES

DEPRECIATION AND AMORTISATION

EXTERNAL SERVICES AND CONTRACTORS

PREMISES COSTS

TRAVEL

OTHER OPERATING COSTS

NON OPERATING COSTS

NET PROFIT BEFORE TAX

OTHER COMMERCIAL

OUR REVENUE

HOW OUR REVENUE IS

SPENT

Return on equity: Net profit after tax ÷ average shareholders’ funds, expressed as a percentage.

Equity ratio: Average shareholders’ funds ÷ average total assets.

Gearing: Financial debt ÷ financial debt plus shareholders’ funds.

(The Minister of Finance and the Minister of Science and Innovation each hold 50% of the shares on behalf of the public.)

This document is printed on Advance Laser, which is an environmentally responsible paper produced using Elemental Chlorine Free (ECF) pulp sourced from Sustainable & Legally Harvested Farmed Trees, and manufactured under the strict ISO14001 Environmental Management System.

GLOSSARY

ABRN Advanced Biofuels Research Network

B3 ALLIANCE

Better Border Biosecurity Alliance

BPA Bisphenol A

BPN Biopolymer Network Ltd

CHH Carter Holt Harvey

CSIROCommonwealth Scientific and Industrial Research Organisation

DDGs Dried Distillers Grains

DOC Department of Conservation

EPA Environmental Protection Authority

EPS Expanded Polystyrene

FFPRI (JAPAN)

Forestry and Forest Products Research Institute Japan

FFR Future Forests Research

FIF Forest Investment Finder

FRFANZForest and Rural Fire Association of New Zealand Inc

FSC Forest Stewardship Council

FWSYS Fire Weather System

GM Genetic modification

HSNO Hazardous Substances and New Organisms

INRA (FRANCE)

French National Institute for Agricultural Research

IPCC Intergovernmental Panel on Climate Change

IUFROInternational Union of Forest Research Organisations

MBIEMinistry of Business, Innovation and Employment

MfE Ministry for the Environment

MPI Ministry for Primary Industries

NIWA National Institute of Water and Atmospheric Research

NRFA National Rural Fire Authority

NZ WCMGNew Zealand Wilding Control Management Group

NZFOA New Zealand Forest Owners Association

NZTE New Zealand Trade and Enterprise

PGP Primary Growth Partnership

PMA Pine Manufacturers Association

PSAF Pre-Seed Accelerator Fund

RDC Rotorua District Council

RNC Red needle cast

RPBC Radiata Pine Breeding Company

RPS Regional Policy Statement

Scion Core Funding

Crown Research Institute Core Funding

SFF Sustainable Farming Fund (MPI funding)

SLUA Soil and Land Use Alliance

STFMP Strategic Tactical Fire Management Plans

STIMBR Stakeholders in Methyl Bromide Reduction

SWI Solid Wood Innovation

UNFCCCUnited Nations Framework Convention on Climate Change

Woodco Wood Council of New Zealand

WPA New Zealand Wood Processors Association

WPI Wood processing subsidiary of Ernslaw One

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