1. Business trends relevant to tropical timber products Lessons for Indonesia from an Australian perspective John Halkett General Manager Australian Timber Importers Federation Inc. 3 rd High Level Dialogue The New Era of Indonesian Legal Timber Products Jakarta, Indonesia 21 August 2013

2. Australian timber product imports Over the last decade Australia has consumed 7.1 million m 3 of timber products a year. Domestic consumption outstrips domestic production by between 5 and 10% The remaining 5 to 10% is sourced from imports. Over the last decade an average of AUD697 million of timber products has been imported each year.

3. Department of Agriculture, Fisheries and Forestry Illegal Logging Prohibition Act 2012 Illegal Logging Prohibition Amendment Regulation 2013 3 July 2013 Australia’s trade in wood-based products (1)

4. Department of Agriculture, Fisheries and Forestry Illegal Logging Prohibition Act 2012 Illegal Logging Prohibition Amendment Regulation 2013 4 July 2013 Australia’s trade in wood-based products (2)

5. Timber utilisation trends Overall timber imports increasing, but tropical hardwoods declining Quarterly Australian tropical hardwood imports by source

6. Tropical forest-related issues Sustainable, sensitive timber harvesting – legality an essential step Frugal use of tropical timber Plantation expansion and improvement Wood processing sophistication, investment and product innovation Economic outcomes related to carbon storage and trading

7. Tropical timber – moving up the value chain Need for producer countries to move up the value chain Example Myanmar essentially operates towards the bottom of the value chain. 800,000 tonnes of tropical timber exports a year earning USD 400 million. Malaysia has climbed up the value chain exporting more wooden furniture that basic timber products. 300,000 tonnes of timber-based product exported a year earning USD 6 billion Malaysia Myanmar generates only USD 500 per tonne while Malaysia benefits by USD 20,000 for every tonne exported. Data from: Myanmar forestry outlook study, 2009 Asia-Pacific forestry sector outlook study 2, Working Paper No. APFSOS II/WP/2009/07, Khin Htun Food and Agriculture Organization, Bangkok

8. Malaysia has climbed up the value chain Myanmar operates towards the bottom of the value chain

9. Applications based around attributes of tropical timber (laminates example): High strength to weight ratio, much higher than equivalent laminated softwood members Ability to produce exciting curved architectural shapes Corrosion resistant Dampener against noise Stable, will not dry and crack like solid timber Resistant to chemicals and aggressive environments Lengths and dimensions of products can be varied Low specific gravity easing cost of substructure Tropical timber utilisation (1)

10. Maintaining light sections makes the effect more striking Merbau glulam outperforms European and American glulams

11. Timber furniture

12. Timber utilisation (2) Overall timber imports increasing, tropical hardwoods declining and engineered products increasing Quarterly Australian imports of wood panels and engineered wood products by source

13. CLT prefabricated panel applications Now being widely incorporated into high-rise and civic development Fastest growing timber product with a current annual increase in demand of 30% Sustainability and reduced environmental footprint key drivers behind widening use Similar levels of structural, thermal and acoustic performance to concrete About a two-thirds of the weight of comparable concrete buildings Construction process cleaner, simpler and faster

14. Forté residential tower, Melbourne, Australia (1)

15. Forté residential tower, Melbourne, Australia (2) 32.2 metres, 10-storey – tallest modern timber apartment building in the world Aspiring to be first 5 Star Green-Star As Built certified residential building in Australia LED lighting, ‘smart’ electricity consumption, rainwater capture and use, water efficiency systems and appliances and car sharing

16. Docklands Library and Community Centre (1)

17. Docklands Library and Community Centre (2)

18. CLT prefabricated panel construction benefits Construction time and cost efficiencies Environmental benefits Lightweight construction and known fire, acoustic and thermal performance Positive carbon storage and life cycle carbon emission attributes

19. Lessons for Indonesia from Australian experience Sensitive timber harvesting – legality an essential step Continue to advance initiatives related to sustainable forest management Frugal and value-added utilisation of tropical timber Progress development of glulam and other engineered wood products and applications Encourage wood processing investment and product innovation noting the commercial opportunities associated with carbon storage and green star ratings

20. Thank you For further information: john.halkett@forestlands.com.au www.forestlands.com.au www.atif.asn.au