Greetings from your WoodWeek team. This week the news in Australia about
corporatising
Forests NSW will be considered a logical progression by people within the
industry. Gunns will be celebrating once they finalise their most recent asset
sales - as well as their formal exit from native forestry.
Meanwhile in wet and cold New Zealand, the news of a large boost
in government spending
on industry safety is
likely to have positive implications for those working in the forest. More good
news comes this week from the industry marketing and promotions arm -
NZWood. With a new sponsor they should be able to do more good work
growing markets for our products.
Also in the mix this week we have a theft alert - please help out these
contractors if you can - to stop the rot. We also have an update for on the
Network for Women in Forestry. The industry review of the Approved
Code of Practice for Health and Safety in Forestry is very close to concluding.
It's been very well debated and thrashed out among key contractors, technical
experts and forest managers. The
changes are reflective of a very progressive industry with a growing culture of
safety responsibility at every level.
For FICA members please note the regional meeting next Thursday - and if
that doesn't spin your wheels - get your crew leaders to Taupo for the
Practical
Leadership Workshop. It all happens next week. Please call or email Christa
in
the FICA office in Rotorua to get your people involved.
Finally - a couple of interesting tidbits from America - if Warren Buffet says
housing is hot - will it change investor behaviour in this very sick sector?
Check out the latest changes in diesel prices, interest rates and exchange rates for Australia
in this
week's Key Indicators.
AUSTRALIAN CONTRACTORS' KEY INDICATORS
16 May 2012
Interest Rates
Diesel Price
Watch
90-day bill rate = 3.77%
VIC (excl
GST) = $1.45
Exchange
Rates
NSW (excl GST) = $1.49
AUD/USD = 1.0053
TAS (excl GST) = $1.56
AUD/Yen =
80.24
SA (excl GST) = $1.51
Wage
Price Index - All Industries
Consumer Price Index
Jan 12 quarter = 109.5
NC
Dec 11 quarter = 179.4
Change (quarter) = 1.2 %
NC
Change (quarter) =0%
Change (year) = 3.6%
Change (year) = 3.1%
Forests NSW to be Corporatised
The NSW Government will make Forests NSW a state owned corporation (SOC) the Minister for Primary Industries Katrina Hodgkinson announced late last week. The entity will remain publicly owned and the nature of the business and business relationships will remain largely the same, but the governance structures will change to improve the organisation’s commercial performance.
“The decision to corporatise reflects the Government’s recognition that there is much room for improving the financial performance of Forests NSW and delivering better returns to the community,” Minister Hodgkinson said. “As a state owned corporation under the direction of a skilled commercial board, Forests NSW will be able to focus sharply on its core business of growing and harvesting timber to meet the community’s needs for hardwood and softwood products while still providing recreational opportunities for the people of New South Wales,”
“The Government recognises the important ‘public good’ roles of Forests NSW as a fire fighting agency, a provider of recreational opportunities and the part it plays in feral animal control. The structural changes will not diminish these roles,” Minister Hodgkinson said. The changes are similar to those introduced into other publicly owned trading organisations such as Sydney and Hunter water corporations. There are no employment level changes proposed as a result of the organisational change.
Under the proposed SOC all the current wood supply commitments of Forests NSW will be transferred to the new corporation and will continue to be underwritten by the Government. “The Department of Primary Industries will handle all policy matters related to forestry and together with the Environment Protection Agency and Office of Environment and Heritage, will provide an effective regulatory framework for the State’s forestry industry, including Forests NSW,” Minister Hodgkinson said.
“There will be no reduction in the regulatory oversight of Forests NSW and the Government will ensure that the State’s commitments under the Regional Forest Agreements are met and that the expected environmental benefits are realised.” The Minister emphasised that the proposed structural changes would involve consultation with relevant stakeholders.
Key Forests NSW Facts
There are almost 540 State forests in NSW, which cover an area of around 2.2 million hectares.
Forests NSW is planting around 10 million trees across NSW in the 2012 planting season, which will ensure an on-going timber supply for its customers and a strong long term future for regional communities which depend on the timber industry.
Forests NSW’s obligations under wood supply agreements will continue to be guaranteed by the Crown.
Forests NSW will continue to provide high quality services and products to its customers, clients and continue its good relationships with local councils.
Forests NSW’s Fire Fighting Agency role will continue and its road network will continue to be maintained.
Safety Boost for Forestry from Increased Spend
The NZ Forest Owners Association welcoming a boost in government funding and support for
workplace health and safety improvement. The industry’s health and safety committee chair
Sheldon Drummond says the announcement by Labour minister Kate Wilkinson of NZ$37
million in extra funding couldn’t have come at a better time.
He says a safety culture initiative now underway in the sector is already being helped by the
government’s focus on improved workplace safety, with the Department of Labour focussing
its efforts on five priority sectors including forestry.
"Since the mid-1990s we have succeeded in reducing our accident and fatality rates, despite a
bigger log harvest, much of it in more difficult terrain than in the past," Mr Drummond says.
"But since the mid-2000s, accident and fatality rates have leveled out. It is our firm belief and
absolute commitment that we can do better. So, hand-in-hand with ACC and Department of
Labour, we are working to embed a safety culture in our forests."
"We have nearly finished a complete revision of the forest operations code of practice,
introduced certification for some high-risk jobs and will be hiring a safety expert to roll all
this out." The forest industry’s drug and alcohol-free workplace policy is innovative and bold
and has been widely adopted by forest owners and contractors, he says.
"Initiatives like these are not easy to implement, but they have massively improved our
workforce’s performance and wellbeing. Also the long-term benefits greatly outweigh the
short-term costs."
Gunns Outlook Getting Sunnier
Make no mistake - this is NOT investment guidance. But it looks like some positive vibes are
coming from Gunns on an increasing frequency. This week the company announced that they
expect to execute (their words not ours) the sale of their Heyfield mill.
A contract for the sale of the Heyfield hardwood sawn timber business valued at roughly AUD
28
million is expected to be completed in late May 2012. This
transaction finalises the exit for Gunns from operations based on native forest wood
supply. Woodflow from native forest harvesting in Tasmania ceased in June 2011.
The process for selling their investment in the Green Triangle forest estate is proceeding.
Indicative offers for its mainland based export woodchip operations and a structured sale
process has commenced for this business which includes the Portland woodchip export
facility.
In respect of the proposed capital raising Gunns is continuing in its discussions and diligence
with a select group of institutional investors in relation to a substantial capital raising. The
terms and nature of this proposed capital raising remain confidential and incomplete. It is
likely that the capital raising process will continue for what is at this time an indeterminate
period.
Finally, agreement has been reached with the Managing Director Mr Greg L’Estrange for the
extension of his term of appointment as Managing Director until 31 December 2012.
Ocean Freight Index
The Baltic Supramax Index (BSI) closed on Friday at 1109 points, an increase of 85% or 165 points since last months 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: Cotzias Shipping)
ALERT: CHAINSAWS STOLEN from 2 Contractors
Anyone knowing the whereabouts of Anthony (Tony) Trevor Hansen please contact:
Paul Woods - Makerikeri Silviculture Ltd, North Canterbury
03 31 28 642 or 027 245 0166
or Zac Te Ahuru - Silvicultural Contractor, Tauramarnui
07 896 7800
It is alleged that he is in possession 3 stolen chainsaws. He left without notice from Makerikeri
Silviculture on April 10, 2012. In his possession at the time was a Stihl 046 that does not belong
to him. He obtained work from Zac soon after and left with 2 other chainsaws. Complaints of
theft by an employee have been lodged with the police in Rangiora and
Tauramanui.
Forestry ACOP Review Nears Completion
Last week a group comprising representatives from across the forestry sector considered the
final round of comments by industry players in the Approved Code of Practice (ACOP) review
process. Armed with a healthy number of submissions received by the Department of Labour
(DoL) through the last round of public consultation via the DoL website and from individual
FICA members.
Feedback from contractors and forest managers was robust and constructive - a good sign
for our industry. The most recent meeting considered all of the feedback in relation to
proposed rule changes. Group participants understood clearly that this part of the process
was to ensure consideration of comments took into account the reasoning of respondents -
not the preferences individual project team members.
Where changes have been most sweeping are in the areas of felling and breaking-out, as it is
recognised by most people that these are the most safety-sensitive work areas in our
industry. Breaking out rules have been tightened considerably - with allowances for
alternative solutions which ensure that people are "thinking for themselves about safety and
productivity". Felling rules were not relaxed - something which did appear in earlier drafts.
Extensive feedback from contractors was universal in relation to not relaxing tree-driving
rules. Once again changes in this area encourage people to demonstrate thinking about
options before rushing into ill-considered actions.
The final product will now need to be polished by legal and ministerial processes within the
Department of Labour. Information on the eventual release of the revised ACOP for forestry
will be notified right here in WoodWeek.
Network for Women in Forestry
The seventh issue of the Network for Women in Forestry newsletter is full of useful information
for women in forestry particularly those within business management or administration roles.
NZ Wood has announced that Resene, the NZ owned and operated paint manufacturer from
Lower Hutt, has committed to a naming rights sponsorship of the 2012 Timber Design
Awards.
The competition brings together architects, architectural designers and engineers in a
showcase event that builds the passion for timber construction in New Zealand.
Karen Warman, Marketing Manager of Resene, highlighted the affinity between timber and
paints and stains – whether for dynamic effect or longevity and protection. “Resene has
always enjoyed partnering with the best and the Timber Design Awards enables us to develop
new relationships with those that value excellence in timber design – like we do! We are
especially pleased that this year’s Awards includes a Canterbury Rebuild category to highlight
the significance of the rebuild.”
In announcing the sponsorship, Jane Arnott CEO, NZ Wood highlighted how the Timber
Design Awards celebrate excellence across functionality and aesthetics. “The versatility of
timber offers infinite possibilities for professionals keen to blend beauty and form.”
“We have to remember that it was only a few decades ago that brutalism ruled, now
fortunately we have a better appreciation of design as well as the integrity of construction.
From curves to filigree, veneers to engineered timber beams only timber can excite, challenge
and change to meet every landscape and every client.”
The First Stage Call for Entries closes on Friday 22 June at 5pm. Entry forms are available
from www.nzwood.co.nz.
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.
At the ForestWood 2012 conference the Woodco Strategy and action plan was released. At the
same conference there was also a controversial but gutsy proposal for a mega-mill project to
include pulp and paper, bioenergy and bio-based chemical production. A very focused
proposal was put forward by Richard Phillips of North Carolina State University on behalf of
Carter Holt Harvey.
On behalf of FICA, using it's strategy criteria for industry growth, John Stulen evaluated the
plan which has genuine potential to achieve additional
export sales beyond logs. The refreshing part of the mega-mill is the prospect that it could
be a key factor in producing extra sales of $6 billion, over and above a log-exports-alone
growth strategy.
There are some big hurdles along the way – feasibility studies need to be funded and carried
out, massive engineering costing and capital expenditure projects need to be funded and
completed, resource consents need to be obtained, and human resources must be trained
and delivered in time for construction and operation of such a large pulp mill. But what an
exciting prospect for growing our industry!
FICA has applied their strategy criteria yardstick to Mr Phillip’s proposal:
STABILITY – The mega-mill would be a very stabilising influence on our industry as
it becomes a fixed-volume user and consumer of some 5 million cubic meters of wood
volume annually.
GROWTH – This is probably the biggest challenge; for our industry to grow pulp
and paper exports in export markets willing to pay the going price. Asia has to be a key part
of that focus.
LEADERSHIP – To begin, achieve and complete such a ‘single-action plan’ as the
“mega-mill” project would require some deeply committed leadership from both industry and
government.
FICA Field Trip & Dinner 24th May; Workshop 24th/25th May
Greetings FICA Members - We have two options for you and your crew leader for next week. On
the afternoon of Thursday 24 May we are running a "free-for-members" field trip and will
continue on networking with a dinner meeting at Ohope Chartered Club.
Our guest
speaker will be Martin Wouters from ManageACC, also known as "The ACC Guy". He has a
compelling story for FICA members. Unless you are entirely happy with your ACC bill - you
NEED to be at this meeting.
Tree Cutting Machine for Real Men
BEFORE YOU READ THIS - Note this is yet another outsiders interpretation of our industry.
Disturbing in some ways and delightfully ignorant in others. (... trees just 'magically'
regenerate in Finland ... !)
----------------------------------
The days of the lumberjack are over. Nowadays, machines have made us redundant in the
forest as they are designed specifically to fell trees whereas we, after thousands of years of
asking and chopping down trees, still don’t know our true purpose here.
But enough with the humour. The machines shown in the videos linked here are awesome and
extremely efficient at reducing an entire forest to a barren stumpy wasteland. The business
end of the machines is the harvesting head which can be mounted on various types of
vehicles. It enables the operator to choose a tree, then cut it, strip it of branches and then cut
pieces of an exact dimension with perfect accuracy.
Just enjoy the wonderful technology shown in these videos and also try to appreciate that
using equipment like these cutting heads and various similar ‘gadgets’, in places like Finland,
they are able harvest more and more trees every year, and through careful planning, their
forests always regenerate and usually surpass the previous year in terms of the quantity of
wood being harvested - awesome stuff!
(Source: Auto Evolution)
North America Forestry - Some Things Never Change
Ahh, North American forestry - Anytime you meet a Canadian they remind you how their
nasty American neighbours are constantly pursuing their northern neighbours in the law
courts with dumping allegations claiming unfair subsidies in Canuck forestry. That said,
witness the two news releases from those hockey-
playing, flag-waving Canadians.
The Nova Scotia government this week dug up $1.7 million to see that province’s forests
grow.
The money is supposed to help small private woodlot owners improve their operations,
“create healthier forests, promote growth of quality wood, improve wildlife habitat, protect
water quality and create productive and sustainable forest stands,” Charlie Parker, Minister of
Natural Resources, said in a news release. The funding will be administered by the
Association for Sustainable Forestry. About $750,000 is slated for small, private woodlots
with certified forests, and about $950,000 for non-certified eligible small private woodlots to
support their silviculture work.
The Canadian federal and New Brunswick provincial government have jointly announced $4.2
million in funding for new research into innovation and markets for the province’s forestry
industry. The money is going towards research and development at the new Northern
Hardwood Research Institute at the University of Moncton’s campus in Edmundston. The two
levels of government are providing $1.58 million each, and the university and private sector
are each giving $529,000.
“Money doesn’t grow on trees, but trees can create prosperity,” Prime Minister Stephen
Harper said while making the announcement last Friday. “We can work together and make the
right investments to build a sustainable forestry industry right here in New Brunswick.”
Harper said forestry is the third largest contributor to the national economy after energy and
minerals, but he added that the industry has faced its share of troubles, citing the housing
collapse in the United States and a historic drop in demand for newsprint as examples.
New Brunswick Premier David Alward said that’s why such funding aimed at boosting
research in forestry is important. “Research and innovation are vital to ensuring our forestry
industry will be even more important to the future of New Brunswick’s economy than it has
been to its past,” Alward said. The money is intended to boost the value-added wood
industry, which is one of the priority sectors under the provincial government’s economic
development plan. That sector of the forestry industry directly employs 9,600 people in New
Brunswick.
Warren Buffett hates housing ... NO LONGER
Warren Buffett's annual letter to shareholders is one of the most highly anticipated reports in the financial community. You can find a copy of his latest letter here.
Believe it or not, Buffett, in his 47th annual letter, has given a ringing endorsement to what is arguably the most spurned of all investments: housing. In fact, he boldly claimed that it would be smart for affluent investors to purchase not just a second or third home, but "load up" on "hundreds of thousands" of single-family homes.
Of course, we've been waiting for the housing recovery to kick in for some time now. But the past few months have brought real, tangible signs of progress.
Okay - we meant FUNNY - but it all seemed to flow so well --- read on ... for a LAUGH!
Did you hear about the thoughtful Scotsman who was heading out to the pub? He
turned to
his wee wife before leaving and said, "Maggie - put your hat and coat on, lassie."
She replied, "Awe Jock that's nice - are you takin’ me tae da pub with you?"
"Nay," Jock replied, "I'm switchin’ da heat off while I'm oot."
Two asparagus are walking down the road when one is hit by a car. The other goes in the
ambulance with his friend, sits in the emergency room, waits for some news.
A doctor comes to him. "I have good news and bad news. The good news - he'll make a full
recovery. The bad news - he'll be a vegetable for the rest of his life."
The political jokes just keep on coming, this one from Kevin. A driver is stuck in a traffic jam
on the motorway. Nothing has moved for half an hour when suddenly a man knocks on the
window. The driver rolls down his window and asks, "What's going on?"
"Terrorists down the road have kidnapped Rudd, Gillard, Swann, Kenneally, and Garrett.
They're asking for a $10 million ransom or they're going to douse them with petrol and set
them on fire. We're going from car to car, taking up a collection." The driver asks, "How much
is everyone giving, on average?". The man replies, "Most people are giving about a litre."
That's all for our mid-week wood news roundup. If you enjoy
WoodWeek
- pass it on - and tell a friend to subscribe as well - its FREE
Have a safe and prosperous week.
John Stulen
Editor
PO Box 6160
Building X91, Scion Campus, 99 Sala Street
Rotorua, New Zealand
Tel +64 27 275 8011
Web www.woodweek.com
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