Forest Biotechnology

Global Opportunities for Somatic Embryogenesis

Introduction and Outline

IntroductionForest Biotechnology ProductsCompetitive AnalysisIdentification of MarketsRegulatory Review of Major Markets

– Canada– United States– European Union– Australia and New Zealand

Opportunities and Overview for Identified Markets

– United States– European Union– Australia– New Zealand– Key Global Markets

Strategic Recommendation

Introduction

• Plant genomics started in 1866 with Augustine Monk Gregor Mendel.

• Mendel died in 1884 without acknowledgement or recognition of his work.

• In 1866 Weissmann coined the term “germplasm”.• Science has lead us to DNA mapping and gene-

sequencing systems.• Annual Global Forest Product Trade exceeds $140

billion.

Canadian Forest Product Trade (selected countries)

Trade Surplus (Deficit) in thousand US dollars

1996 1997 1998 1999 2000 2001

Australia $ 137,536.00 $ 120,759.00 $ 83,994.00 $ 99,972.00 $ 122,233.00 $ 62,098.00

Finland -$ 24,252.00 -$ 32,153.00 -$ 61,578.00 -$ 49,333.00 -$ 40,988.00 -$ 61,486.00

Germany $ 571,226.00 $ 560,015.00 $ 400,271.00 $ 331,443.00 $ 482,624.00 $ 275,709.00

New Zealand $ 17,267.00 $ 17,811.00 $ 9,018.00 $ 8,064.00 $ 11,770.00 $ 4,419.00

Sweden $ 4,828.00 $ 12,863.00 -$ 1,992.00 -$ 544.00 -$ 7,216.00 $ 6,747.00

United Kingdom $ 553,474.00 $ 438,060.00 $ 382,919.00 $ 349,617.00 $ 405,449.00 $ 352,247.00

United States $15,851,692.00 $15,898,227.00 $16,222,665.00 $18,303,521.00 $18,363,612.00 $17,244,587.00

Forest Biotechnology Products

FAO classifies into 3 types:Tools to assist in designing and monitoring tree conservation programs

Technologies to enhance vegetative propagation and mass produce uniform materials

Technologies to enhance characteristics and traits through genetic modification

Current Operational Product

• Somatic EmbryogenesisA process used for the vegetative propagation of selected tree species through the maintenance of superior trait germplasm and perpetual harvest of somatic embryos.

• Commercial ventures include:• Weyerhaeuser Corporation• Westvaco Corporation –

Pennsylvania/New York• Cellfor Inc. – Victoria, Canada• Arborgen Inc. – North

Carolina/New Zealand• Plantselct Inc. – Dartmouth,

Ontario

Current Research Focus

• Canadian Forest Service current research projects:– Environmental Impacts of

Forest Biotechnology– Conifer SE– Genetically Modified Trees– Genetically Engineered

Baculoviruses for Forest Insect Management Applications

• Identification of genetically superior trees and genetic diversity

• Tree Propagation through tissue culture

• Tree Improvement through genetic engineering

• Environmental impact assessment of biotechnology-derived products

• Forest protection using biological pest control methods

Market Identification

• Forest biotechnology CREATES future value

• Forest biotechnology requires skill and experience

• Forest biotechnology must be responsible

Future value must be included in management planning

Requires protection of gained intellectual property and

social infrastructure

Requires established policies and legislation that

represents social will and fosters environmental

sustainability

Market Identification

• Therefore:– Country must have:

• Good social infrastructure to support maintaining skilled staff

• Intellectual property law and enactment

• Environmental biotechnology law and enactment

• Need/Ability for increased domestic production of forest products

Major Suitable Markets:• Canada• United States• European Union

– Sweden– Finland– Germany

• New Zealand• Australia

Regulatory Review of Identified Markets

• Canada– CEPA, 1999 regulated by

Environment Canada– Strict environmental policies– Currently no approved products

• United States– Federal Plant Pest Act regulated

by the USDA and EPA– Four phases of approval: Pending,

Acknowledged, Regulated Status, and Nonregulated status

– Walnut approved August, 2003

• European Union– Full environmental risk

assessment– Jointly regulated through several

Ministries and Advisory Boards– Currently no approved products

• Australia and New Zealand– Based on ‘Precautionary

Principle’– Recent legislation and approval

process under Gene Technology Act, 2000 and Plant Breeder’s Rights Act, 1996

– Currently no approved products

Opportunities and Overview of Identified Markets

• United States– $15 billion forest product trade deficit– Softwood Lumber

• Lengthy trade dispute based on US embitterment over ambiguous stumpage fee allocations from Government to Canadian forest companies

• Permanent U.S. countervailing and anti-dumping duties totaling 27% were imposed on Canadian exports effective May 22, 2002

– Still a major global consumer– Opportunities for joint research

development and funding

Opportunities and Overview of Identified Markets

• United States Opportunities– Foreign investors seeking to

divest from traditional forest products while maintaining a core competency in the industry;

– Transparent regulatory policies with enacted legislation; and,

– Primarily English-speaking economy.

Opportunities and Overview of Identified Markets

• European Union– GDP of Forest Products for all

member states• $520 billion

– 80% increase in exports to the US due to Canada-Us Softwood Lumber trade disputes

– European Commission creates policies nd agenda on biotechnology for all member states to incorporate

– Focused on Environmental impact and supporting research

Opportunities and Overview of Identified Markets

• European Union– Sweden

• More than 400 years of forest management history

• Increasing allowable sustainable cuts from intensive forest management = 4,000 km2 per year

• IUFRO organizes annual symposium on Forest Biotechnology

• Extensive application of forest biotechnology research

– creation of functional SE for Scandinavian tree species

– Transgenic impact data modeling

Opportunities and Overview of Identified Markets

• European Union– Sweden Opportunities

• Intensively managed forests and forest management experience

• Strong research and development expenditures by Government

• Experienced and qualified research network• SE is close to being operational for Norway spruce• Government support research and development

activities• Committed university research departments• Developed social infrastructure and societal networks• Legislation protects intellectual property• Progressive social view of biotechnology benefits to

forestry

Opportunities and Overview of Identified Markets

• European Union– Finland

• 58% of all forestland is owned by private individuals

• Extensive family forestry farming culture

• Forest products comprise 29.2% of total exports

• Fragmented but well managed forest

• Communities all involved in forestry, high social awareness

Opportunities and Overview of Identified Markets

• European Union– Finland Opportunities

• Intensively managed forests and forest management experience

• Strong research and development expenditures by Government

• Experienced and qualified research network• Extensive forestry land base• SE is close to being operational for Norway spruce• Government support research and development

activities• Committed university research departments• Developed social infrastructure and societal networks• Legislation protects intellectual property• Progressive social view of biotechnology benefits to

forestry

Opportunities and Overview of Identified Markets

• European Union– Germany

• Large global producer of pulp and paper

• Large forest product export surplus

• Intensively managed forests

• Institutes the Biotechnology 2000 program which funds research and development of application to local needs

– Genetic engineering– Molecular biology

Opportunities and Overview of Identified Markets

• European Union– Germany Opportunities

• Intensively managed forests and forest management experience

• Developed social infrastructure and societal networks

• Extensive research and development infrastructure and support

• Enacted legislation protects intellectual property

• Progressive social view of biotechnology benefits to forestry

Opportunities and Overview of Identified Markets

Australia• Forestry comprises 1.1% of total GDP

output and 7.5% of total manufacturing output

• Imports of $1.3 billion and exports of $3.23 billion

• Forest Product trade deficit of nearly $2 billion

• 21% of total land area is forested• Plantations supply 50% of domestic

need, 70% by 2015• Eucalyptus and pine reach maturity in

35 and 75 years, respectively

Opportunities and Overview of Identified Markets

Australia Opportunities– SE is scientifically proven and functional for eucalyptus and pine, the

primary Australian plantation species;– Government support programs and incentives for plantation investment

and research and development activities;– Minimal established competition;– Large deficit of domestic production to consumption;– Regulatory infrastructure of legislation, advisory groups and oversight

established;– Transparent regulatory policies with enacted legislation;– Primarily English-speaking economy;– Suitable environmental conditions and extended growing season to

North America;– Developed social infrastructure and societal networks;– Commonwealth law protects intellectual property; and,– Progressive social view of biotechnology benefits to forestry

Opportunities and Overview of Identified Markets

• New Zealand– Intensive forest management for 50 years

– Rotations beginning to increase sustainable allowable volumes

• 1998 to 2010 will have increased 100%

– $1.9 billion forest product exports

– $0.3 billion imports

– Large forest biotech research facility in Wellington

Opportunities and Overview of Identified Markets

• New Zealand Opportunities– SE is scientifically proven and functional for eucalyptus and

pine, the primary New Zealand plantation species– Government support programs and incentives for plantation

investment and research and development activities– Primarily English-speaking economy– Suitable environmental conditions and extended growing

season to North America– Developed social infrastructure and societal networks– Legislation protects intellectual property– Progressive social view of biotechnology benefits to forestry

Opportunities and Overview of Identified Markets

• Central America– Large global producer– Extensive environmental damage– Need for biotechnology remediation products

• Financially feasible

• China– Large global consumer– Extensive forests, but rugged terrain and

fragmented agricultural lands

Canadian Support

• Canadian Forest Service– Research and development support

• Funding

• Research Professionals

• Department of Foreign Affairs and International Trade– Trade relationships– Networking and contacts– Market analysis

• Canadian Institute of Forestry– Funding

Strategic Recommendation

1.7% annual increase in global consumption demandScarce land resources

Consumption can be met by enhancing quality and quantity through biotechnology

Ensure contributions to policy development

Ensure proper knowledge management and protection

Strategic Recommendation

Focus on Australian MarketTransparent and enacted legislationProperty rights to knowledge recognized and enforcedLarge land base suitable for forest plantationsCurrent technologies functional in Australian climate

SE of eucalyptus and pine

Extensive government funding and support to developments and research that focus on solving the forest product trade deficit

Also maintain presence at research symposiums in EU, Canada and the US – contribute to policy development