Funding boost for timber processing breakthrough

12 November 2007

Funding boost for timber processing breakthrough

A breakthrough development by Wood Engineering Technology Limited – enabling low value logs to be turned into high grade lumber – is taking a big step closer to full production with the backing of investment from the Foundation for Research, Science & Technology.

The patented process developed by Wood Engineering Technology allows “K” logs, the lower value non-structural log output from Radiata pine plantations, to be manufactured efficiently into engineered wood products. The end product is high value certified structural lumber for the New Zealand and global building industry.

The Foundation has approved an investment of more than $225,000 from its Technology New Zealand suite to part-fund a technology pilot plant that will produce an initial quantity of marketable product under the brand name OEL (Optimised Engineered Lumber). Earlier production testing has validated the technical concept and manufacturing process.

The OEL product is a direct substitute for structural lumber and is ideal for house building. It meets all building code requirements to a high degree of reliability – exceeding the performance of existing structural lumber while being consistently straight and true. The manufacturing process is so efficient and cost competitive that the OEL product will be able to be marketed at a lower price than equivalent structural lumber, even though it is significantly superior in its characteristics.

“OEL is a disruptive technology, producing a better, more reliable product at a lower price. “As such it has the potential to create significant value for the New Zealand timber industry,” Wood Engineering Technology director Tony Johnston said.

“OEL allows more of each tree to be converted into high-quality structural products. OEL products will compete directly with sawn structural lumber, but with performance advantages including consistent straightness and very low variability.

“The technology can be applied to feedstock not suited to traditional saw-milling, such as small diameter, crooked, or short logs. Because OEL uses logs that are currently exported at low value – generally to Korea for packaging or concrete form work – it fundamentally changes the economics of sawmilling and structural timber products.”

Wood Engineering Technology was formed in 2003 by a group of Auckland-based investors with international technical and commercial experience and track records in forestry, wood processing and bringing emerging technologies to market.

Mr Johnston is also a partner in LumberLink, a leading New Zealand exporter of traded lumber. He was previously Chief Executive officer of Thames Group, CEO of the Wood Processors Association and inaugural Chair of the Wood Council of New Zealand. He had a nine-year career in the wood products business of Fletcher Challenge, where he led the highly-successful development of the clear wood moulding market in the United States.

“The development of a cost-effective engineered wood product has been on the agenda for the New Zealand forest products industry for a long time,” Mr Johnston says. “We’ve long known that a large export opportunity exists for engineered wood products – an order of magnitude larger than the New Zealand market – but until this breakthrough we have been unable to meet the required price point. Now, we can do better than that.”

The OEL process involves sawing short logs into thin strips which are then dried, finger-jointed, laminated and cut to length to meet detailed product specifications. “OEL lumber meets the structural lumber standards in Australia and New Zealand for house construction. The strength characteristics of the OEL product can be readily adjusted to accurately and reliably meet other relevant structural timber building code standards,” Mr Johnston said.

Patents have been awarded for OEL in New Zealand and South Africa, and are pending in other major markets and manufacturing locations. The brand has been trademarked in New Zealand and several other countries.

Planning is under way to build the first commercial-sized modular plant, with a capacity to produce 50,000 cubic metres of OEL per year, enough to build approximately 4,000 New Zealand houses. Further plants are expected to follow throughout Australasia.

Mr Johnston welcomed the participation of the Foundation for Research, Science and Technology as a significant step in the commercialisation process. Wood Engineering Technology is also funded by its founders and a number of private investors.

The Foundation invests on behalf of the New Zealand Government, in research, science and technology. Through its Technology New Zealand suite of schemes, the Foundation assists companies to undertake research and development projects that result in new, export-focused products, processes or services.

ENDS