WoodWeek – 16 April 2014

Greetings from your WoodWeek team. This week we have some key news stories from both sides of the Tasman for you. Also FICA is running a Logging Costing Workshop for contractor principals followed by a first aid course for forestry workers in Whangarei at the end of the month. FICA members get preferential registrations.

In Australia there has been call to government and industry to stem the decline in research and development to reverse industry fortunes. FWPA and AFPA have been proactive in creating awareness of the long-term industry needs for better collaboration as well.

Over the past week more than 200 industry delegates attended the FIEA Forest Investment and Market Outlook (FIMO) conference series in Auckland and Melbourne. A range of international speakers delivered a virtual smorgasbord of industry intelligence about forest investment, and markets of interest to people in our industry, across Australasia. All of our speakers, including three keynote speakers from Canada and the United States, were well received. As expected they provided considerable insight to industry leaders attending both of the conferences, on how international investment and market forces affect both the New Zealand and Australian forest industries. The discussion with delegates and speakers in the breaks was very encouraging.

This week in Melbourne delegate feedback highlighted two particularly outstanding speakers who addressed the FIMO conference group. Jonathan Wu from Premium China Funds Management spoke with exceptional insight on his favourite subject: foreigners doing business in China. He emphasized practical issues and how to focus on the substance and ignore the shadows. He dispelled several nasty industry rumours and set the story straight. He was clear, concise and right on top of the latest key China business issues delegates wanted to hear about.

Another outstanding speaker was Dylan Brady whose architectural practice – studio505, has vast project experience from Federation Square to engineered timber and multi-story buildings in both Australia and China. His firm is also active in the New Zealand market. He spoke with passion and commitment and a vast amount of practical experience. His knowledge and understanding of wood as an engineering material and its attraction for natural beauty combined to give our conference audience an outstanding presentation. He challenged our lack of progressive marketing in the area of commercial building and development using wood and showed a real understanding of how success is being achieved by others.

At both the Crowne Plaza Hotel and the Bayview Eden Hotel meetings there was, as usual, the constant buzz of networking during the breaks. The well- attended dinner session also provided a chance for people to catch up with current and former work colleagues. In Australia the gathered dinner audience heard from Mick Stephens from AFPA on their work to improve industry collaboration.

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Framework set for Independent Forest Safety Review

New Zealand’s Independent Forestry Safety Review Panel has agreed on a framework for doing its work and work is well underway on the development of a public consultation document. Panel Chair, George Adams said “the framework will help the Panel engage with industry stakeholders and the public.

For the framework, the Review Panel has drawn from the work of the Independent Taskforce on Workplace Health and Safety. The Taskforce formed a view that there were three key features (the workplace, people in a workplace and work organisation), which “combine together within a workplace to determine the workplaces’ safety culture and collectively impact on the workplace health and safety outcomes for the workplace”. The three themes have been used to create work streams for the Review.

The consultation document will set out the key issues impacting on health and safety in the forestry sector as the Panel understands them. It will also set out some options for change. But, the Panel Chair notes “there are no silver bullets – It is clear from our work so far, health and safety in the forest is not about one or two big changes. It will be about many changes, for everyone: forest owners, forest managers, contractors and workers”. This was made clear when the Panel visited some forest sites in Rotorua.

The panel will be inviting feedback on the issues and on the options. It will be asking for written submission. Along with the consultation document, the Panel will travel to some forestry regions in mid to late June over a period of three weeks.

The panel will be meeting with key industry stakeholders, forestry health and safety experts and forestry contractors and workers in the regions. Details of the consultation process will be made available on the Review’s website, www.ifsr.co.nz. To signal interest in attending the consultation process people can email, info@ifsr.co.nz
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Logging Costing Workshop - Whangarei - 30 April

Recently FICA responded to member feedback by running a revised version of the well-known ‘Logging Costing’ workshop.

We have now re-focused and re-named the workshop to the ‘FICA Logging Costing for Profitability Workshop’. The next one is in WHANGAREI on 30 April.

The first new format course held in Balclutha was very well-received. The new format includes two speakers – Mark Blackburne of Blackburne Group, well-known forestry accountants and Jon Dey of Forme Consulting, producers of annual machine costings. So for 2014 we plan to run it in four regions; East Coast, Northland (30 April), Taupo (24 September) and Nelson (22 October).

We will be canvassing members for feedback on an added half-day (morning) workshop for ‘Women in Forestry’ as a separate module. If there is demand, this extra workshop will be led by Sonya Elmiger from Blackburne Group. Call Christa in the FICA office to register.

Logging costing workshops are free to FICA members. Small contractor members get one free registration, medium contractors get two places and large contractors get three places. Extra FICA member registrations are $325+gst. Non-members are welcome with pre-payment of $650+gst.

Click here for more information and to register for the workshop.

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Stage set for FIEA Woodflow Logistics Conference

Over 400 forest managers, owners and harvesting contractors from New Zealand, Australia (a group of around 30 forest contractors visited as part of an industry tour organised by AFCA), the US, Canada and South America converged on Rotorua at the end of last year. The occasion was the Forest Industry Engineering Association (FIEA) organised Steep Slope Wood Harvesting conference and a Forestry Safety Summit. It was certainly this region’s largest gathering of forest managers and contactors seen for many years.

The success of the November event along with innovations drawn from a transport and logistics programme run for US forestry companies in the Pacific North West in October last year have been incorporated into this year’s Wood Flow Logistics 2014 event. The mid-June series is being run for local companies in both Australia and New Zealand. “New technologies, new practices and new operating systems being developed and adopted by some of the more innovative forestry, harvesting and wood transport companies” will be the focus for Wood Flow Logistics 2014”, says Brent Apthorp, FIEA Director.

At last year’s Steep Slope Wood Harvesting event, technologies that improved both worker safety and productivity on steeper terrain were highlighted. What was interesting is that a number of these new innovations were being developed by those working in the forest. There was an immediate need to change how wood was being harvested with their current equipment. The initiative was coming from contractors working together with local engineering companies.

Dale Ewers is a harvesting contractor based in Nelson with crews working around New Zealand. Late in 2011 the company decided after experimenting with a number of grapple carriages on their cable hauling and yarder operations to design and build their own – the Falcon Forestry Claw. The grapple carriages are now employed in all of Dale’s crews and have been picked up by other contractors. Fifteen have been produced. A smaller and lighter carriage has also just been built (800kg lighter with a maximum payload of approximately 4 tonnes) and at the time of writing, was being trialled by two of Dale’s crews.

The forestry claw incorporates a camera into the grapple carriage providing the operator a real time bird’s eye view of the operation. It includes an infrared camera and carriage lighting for operating in the dark, GPS location (with data on cycle time, elevation, distance, speed and slope being supplied), details on carriage distance to hauler and a host of other benefits. Dale’s Nelson crews are up to 95% utilisation with the grapple carriages.

Other innovations include an addition of an extra arm on the grapple that will hold trees already within the claw to multi-bunch (potentially leading to a 30% increase in the number of trees brought up to the landing). Other innovations being worked on by Dale and his team include a remote winch assist dozer, remote winch assist digger, crew voice recorders, automated hauler controls and a log carriage being fitted with a felling head. The objective from the start was to mechanise their harvesting operations with the aim of eliminating or reducing incidents on the landings, then with breaking out operations and finally, incidents through manual felling on steeper slopes.

Dale will be outlining these innovations and one of Australia’s largest stand-alone harvest and haul operations, Sunchip will be presenting as part of the harvesting component of the Australian leg of the Wood Flow Logistics event his year. In addition, the very latest developments from Waratah Forestry Attachments, Tigercat, Brightwater Engineering, an overview of innovations being used by leading South American harvesting operations and a new on-line mapping product to assist in harvest planning will be discussed at both the Australian and New Zealand legs of the Wood Flow Logistics 2014 event.

Wood Flow Logistics 2014 will run in Rotorua, New Zealand on 11-12 June and again in Melbourne, Australia, in the following week on 17-18 June. Further details on each programme can be found on the event website, www.woodflowlogistics.com






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Network for Women in Forestry

The twenty ninth issue of the Network for Women in Forestry (NWIF) newsletter is full of useful information for women in forestry particularly those within business management or administration roles.

Check it out here or head to the NWIF page of the FICA Website.



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Call to Reverse Forest Research Decline

Plans to revive Australia's forest products research have again been outlined at a national forestry investment conference. Delegates attending the Forest Investment & Market Outlook 2014 conference heard funding for forestry research and development has collapsed from a peak of AU$100M to AU$25M this year. The cuts have seen 200 forestry research and development jobs lost, leaving fewer than 80 positions in Australia.

But Forests and Wood Products Australia (FWPA) statistics show forestry and timber harvesting activity is starting to rise with demand for softwoods for Australian housing and for woodchips in China. FWPA managing director, Ric Sinclair says the industry is now looking at long-term investment in research to drive productivity gains.

"One of the challenges of the forest sector is that it is long-term investment," he said. "Making the right investments at the start of the cycle is about achieving that productivity”. "There's a proposal at the moment by the Australian Forest products Association, AFPA, to create a research institute. This is a long term proposal about holding the research capacity in a new structure, whether that is in one location or across several nodes”.

"We are also in the process of developing a bid for a CRC, which is very much focussed on how we transform the sector, given that we know the future markets and what are the type of products that are required. It's really aimed on the principle that we know the trees that are in the ground, for the next 15 to 20 years, we know their qualities: what is the best way to process those to ensure a sustainable and profitable sector? "There are three themes we are looking at: solid wood products, as well as engineered products and new engineered biomaterials".

Source: ABC

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Ocean Freight Index

The Baltic Supramax Index (BSI) closed on Tuesday at 916 points, an increase of 23.54% or 282 points since February's report.

The BSI (Baltic Supramax Index), published by the Baltic Exchange, is the weighted average on 5 major time-charter routes. It is based on a 52,454 mt bulk carrier carrying commodities such as timber.



(Source: Capital Link Shipping)

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Grand Designs for FWPA

On Sunday April 6th across Australia, television viewers were greeted by award-winning architect Peter Maddison, host of Grand Designs Australia, promoting wood for Planet Ark and Forest and Wood Products Australia (FWPA). The commercial, produced under Planet Ark’s Environmental Edge brand and co-branded Wood. Naturally Better.™ returns to free-to-air and pay TV in metropolitans and major regional markets in a short, targeted schedule.

“Tracking research has indicated excellent increases in awareness of our key messages from the previous campaigns with 74% of respondents saying the points in the ad were believable” said Ric Sinclair, Managing Director of FWPA, “Our market research also shows this ad is effective in helping people’s understanding of the environmental benefits of wood – and indicates that Peter, our presenter from Grand Designs Australia is doing a great job. I look forward to this campaign continuing to create good results for our industry.”

In the commercial, Peter Maddison explains that wood stores carbon and that carbon is better locked away in wood than free in the environment. He ends by suggesting that by choosing wood, viewers are doing good. Planet Ark’s Environmental Edge is a series of advertisements designed to provide people with facts to help them make more informed environmental decisions.

On free to air TV, the spot will feature in programs such as My Kitchen Rules, Better Homes & Gardens, The Living Room, movies, news and lifestyle programs. A pay TV and online schedule rounds out the campaign, aiming to reach a broad audience while targeting people interested in building and renovating.

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Shipping Alliance on the cards

An alliance of the world's top three container shipping firms which could control more than a third of the market is likely to start operating in mid-2014, No.1 player Maersk Line said after the tie-up was approved by U.S. regulators reports Thomson Reuters.

The industry has been battling overcapacity since the financial crisis because new vessels ordered before the downturn have flooded the market. This has driven rates on the main route between Asia and northern Europe to loss-making levels.

The proposed alliance is between Maersk Line, a unit of AP Moller-Maersk, Switzerland-based MSC Mediterranean Shipping Company and France's CMA CGM. To cut costs, they have agreed to pool about 250 ships which will operate on three trade routes: Asia-Europe, trans-Pacific and trans-Atlantic. This would allow the firms, which currently run many of their vessels only partly laden to run larger ships - which are more fuel efficient - fully loaded.

The so-called P3 alliance will have more than 40 percent of Asia-Europe and trans-Atlantic trade and 24 percent of the trans-Pacific market, according to industry estimates. The approval from the US Federal Maritime Commission (FMC) takes effect from Monday but will apply only to routes to and from U.S. ports. The alliance still needs approval from Chinese and European regulators before it can become fully effective. Maersk Line said it expected to receive Chinese and EU approval before the middle of this year. "We expect that the P3 can be started mid- 2014," it said.

Shipping and improving storage and handling efficiencies in ports will form part of the upcoming Wood Flow Logistics 2014 series that will be running for forestry, harvesting and wood transport companies in both New Zealand and Australia in mid-June. Details on the event can be found on www.woodflowlogistics.com

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Thanks to FICA Sponsors

We would like to thank all of the organisations who support FICA, which in turn works to promote business growth and improved safety and efficiency amongst forestry contractors for the benefit of New Zealand's Forestry Industry.

STRATEGIC PARTNERS








MEMBERS' BENEFITS – BUSINESS PARTNERS
Blackburne Group (ACCOUNTANCY & MANAGEMENT SERVICES)
UDC Finance (BANKING & ASSET FINANCE)
Sweeney Townsend & Associates (INSURANCE SERVICES)
TLC Insurance (INSURANCE SERVICES)

GOLD SPONSORS
Gough CAT
Cableprice NZ Ltd
Mini-Tankers (Z Energy)
Komatsu Forest NZ
Shaw's Wire Ropes
Pirtek
Brightwater and Madill
GE Capital
STIHL
Woodsman Pro
Blackwoods Protector

SILVER SPONSORS
Ensign
Trinder
Timbersaws (Levin Sawmakers)
Total Lubricants



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California Issues First Forestry Offsets

California air regulators on Wednesday issued the first carbon offset credits for a forest protection project, credits that power companies and others large emitters can use to meet their compliance obligations under the state's greenhouse gas reduction program.

The California Air Resources Board, which administers the program, issued 836,619 offset credits for the Yurok Tribe Sustainable Forest Project, which covers about 8,000 acres of tribal land in California's Humboldt County.

In return for the credits, the landowners have agreed to maintain or increase carbon stored in the trees for more than 100 years. The land is the ancestral homeland of the Yurok Tribe. The credits are currently worth about US$10.25 each, according to one carbon market participant.

Utilities such as Pacific Gas and Electric and Southern California Edison, a subsidiary of Edison International , have recently expressed interest in buying offset credits to help them meet their compliance obligation under the program.

Those companies as well as oil refineries and large manufacturers will be required in November for the first time to turn over allowances and offsets to account for their output of heat-trapping greenhouse gases.

"The issuance of these forest offset credits signifies a legal commitment to long-term forest protection and demonstrates the effectiveness and benefit of market mechanisms to encourage environmental action," Linda Adams, chair of the Climate Action Reserve board of directors, which registered the project and did its initial verification.

Source: Reuters
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Meanwhile ETS in New Zealand on Life Support

New Zealand has met its Kyoto obligations by a whisker, but it has little to do with the ETS, say forest owners. “From 2008 to 2012 the country’s 25 per cent increase in carbon emissions was masked by carbon stored in forests planted in the 1990s. As these trees are harvested, forestry will move from being a carbon sink to being a carbon source,” says Forest Owners Association chief executive David Rhodes.

“At that point New Zealand’s environmental credentials will be delivered a double whammy. Our steady increases in gross emissions will no longer be masked by forestry and indeed, forestry emissions will add to the negative ledger.”

Mr Rhodes says the government is portraying the ETS as a success because the Crown had a surplus of credits at the end of 2012. But that has little or nothing to with the ETS. It’s all due to a boom in forest planting in the 1990s. Since then we have moved to net deforestation, a trend that appears to be gathering pace.”

In its report to the United Nations Climate Change Convention in December last year, the government predicted the line from carbon sink to carbon source would be crossed in 2017.

“With large areas of harvested forest lying fallow and tree nurseries reporting falling demand for seedlings, Mr Rhodes says this line could be crossed much earlier than this. It may have occurred already.

“New Zealand has escaped by a whisker. The Kyoto reporting years from 2008-2012 portray the ETS in a good light, so long as you don’t look too closely. Our ETS is like a patient on life support. It’s meant to be a vibrant and alive, encouraging good behaviour like planting trees and discouraging excessive emissions, but it’s not achieving anything”.

“If the government truly believes the planting of new forests is a good thing for New Zealand – as it has said so many times – it needs to provide forest owners with an income stream from carbon. A good example is California which last week issued its first carbon credits to a forest owner.

“Forest offset credits there are selling for $US10 a tonne. In New Zealand, a forest owner would struggle to get more than $NZ3 a tonne.”
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Government Boost for Export Markets

The Government of British Columbia is investing C$6.1 million to build new markets around the world for BC wood products, including priority markets in China, Japan, India and South Korea. The funding is being provided to eight industry trade associations that operate market development programs in Asia, the United States, and other major markets, including Europe. Market development support is also being provided by the federal government, through Natural Resources Canada, and by industry.

British Columbia’s contribution is being distributed through Forestry Innovation Investment (FII), the province’s market development agency for forest products. FII also manages the Wood First program, which fosters the innovative use of wood and wood building systems in British Columbia, and other programs that promote the many environmental benefits of B.C. forest products.

Collaboration with industry and the federal government in the delivery of international marketing programs has been a successful model for BC. Since the government and industry set up a joint program in 2003 to target the Chinese market, BC softwood lumber exports to China have increased by close to 2,000 per cent, totalling C$1.4 billion in 2013.

Through the joint delivery model, provincial funding of C$6.1 million will be leveraged with additional contributions from industry and the federal government.
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… and finally … farming funnies ...

An old man in Australia had owned a large farm for several years. He had a large pond in the back. It was properly shaped for swimming, so he fixed it up nice with picnic tables, horseshoe courts, and some apple, and peach trees.

One evening the old farmer decided to go down to the pond, as he hadn’t been there for a while and look it over. He grabbed a five-gallon bucket to bring back some fruit.

As he neared the pond, he heard voices shouting and laughing with glee. As he came closer, he saw it was a bunch of young women skinny-dipping in his pond.

He made the women aware of his presence and they all went to the deep end. One of the women shouted to him, ‘We’re not coming out until you leave!’

The old man frowned, ‘I didn’t come down here to watch you ladies swim naked or make you get out of the pond naked.’ Holding the bucket up he said, ‘I’m here to feed the alligator.’

Some old men can still think fast.

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