WoodWeek – 7 October 2015

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Greetings from your WoodWeek news team. This week we’ve got market updates and a chance to win a Toughpad for ForestTECH delegates. In export market news this week it's a bit of a surprise in terms of wood markets - USA continues to be the leading market on export value, surpassing China and Australia. It now accounts for 22% of export product year to date.

Today’s first story is about where forest harvesting could go if the leading edge in Nelson continues to be successful. FFR chief executive Russell Dale says the remote controller is the beginning of a shift away from people working in dangerous situations, and reflects the mantra "no worker on the slope, no hand on the chainsaw". The rest of the forestry world is watching, he says. Indeed, they are and nowhere more so than the loggers and foresters in British Columbia. More on that next week.

One of the biggest developments recently across our forest industry in the past few years has been the successful implementation of the commodity levy to fund industry-wide projects for the benefit of all growers. Voting is now open for the person who will represent owners of smaller forests on the Forest Growers Levy Trust board. The two candidates are Guy Farman, managing director of Farman Turkington Forestry and Steve Wilton, managing director of Forest Enterprises. Both have strong forestry credentials and are based in the Wairarapa.

Once again in November we bring you FIEA’s ForestTECH 2015 conference. It will bring together forestry managers, planners and resource foresters from around the region. Tech sessions this year will give local forestry experts an insight into new data collection tools and the growing issue facing most forestry companies right now, how best to manage and analyze the quantity of field information being collected from a variety of sources.

An expanded Gateway programme of structured work placements will replace the forestry trade academy in New Zealand from 1 January 2016, as industry training organisation Competenz moves to make forestry training available to more schools and better prepare students for a successful career in the forestry industry.

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Remote controlled harvester put through its paces

It could be a scene out of a science fiction movie.

Sitting on a tree stump, forester Tony Irvine manipulates a control panel resembling a computer games console.

About 50 metres away a John Deere 909 tracked felling machine roars into life. With no-one sitting in the cab, the machine climbs up the slope towards a stand of trees, its large arm swinging in front.

The arm manoeuvres into position, then clasps a trunk in a robotic bear hug. Inside the arm a chainsaw whines and the tree is swiftly sawn through, toppling to the ground.

"It's like being on the set of the Transformers," exclaims Irvine's partner Fiona Corkin, standing among the group of officials and media for today's demonstration.

High up the hill behind, a remote controlled log grapple is ceaselessly moving up and down the slope on a flying fox, grasping logs in twos and threes, hauling them to the summit where they will be readied to be slung aboard trucks.

Both hi-tech systems have been developed by the forestry industry, with a nudge from the Government.

They are in part a response to the high death rate in the industry that saw 13 people die in 2013, in what Primary Industries Minister Nathan Guy has dubbed a "ghastly year".

But it is also about higher productivity. Ross Wood of Hancock Forest Management in Nelson, says mechanisation in the forests he manages has seen the daily tonnage of logs cut jump from 200 to 350 tonnes.

About half of New Zealand's plantation forests are on steep hills. Other parts of the world - Canada for example - face similar issues.

Rotorua whiz kid and engineer Paul Milliken, a director of Cutover Systems, has spent the last few years developing the remote control system with the aid of Daniel Lamborn and Allister Keast.

He is now working on the next model where the operator will be seated in a trailer, with more and better cameras, large screens and controls as close as possible to the real thing. Ultimately the operator will use foot pedals, as if he is in a real cab.

More >>

Source: Stuff News

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Forest grower poll opens

Voting is now open for the person who will represent owners of smaller forests on the Forest Growers Levy Trust board.

The two candidates are Guy Farman, managing director of Farman Turkington Forestry and Steve Wilton, managing director of Forest Enterprises. Both have strong forestry credentials and are based in the Wairarapa.

Anyone who owns a ‘qualifying forest’ of between 4 and 1000 hectares, planted before 1 October 2003, may vote in the election that opened on Monday 5 October and closes on Friday 16 October.

The election is the first to have been held since a commodity levy was applied to harvested plantation logs in January 2014. Three of the six elected board members retired this year after only one year in office. In the future, three directors will retire every second year after a four- year term.

All three members who retired this year offered themselves for re-election. The two representing owners of larger forests, Paul Nicholls and Philip Taylor, have been declared to be re-elected as they were the only candidates for the two vacancies. They join sitting directors David Balfour and Bill McCallum on the board as representatives of owners of larger forests.

With two nominations – existing board member Steve Wilton and newcomer Guy Farman – for the one ‘small forest’ vacancy, an election is needed. This is taking the form of a secret on-line ballot where each forest owner gets one vote.

The successful candidate will join sitting director Ian Jackson of South Canterbury in representing the interests of owners of smaller forests on the board. Trust chair, Geoff Thompson, says the forest growers levy raised $7.96 million in 2014 for activities that benefit all forest owners, including research, forest health, safety and training.

“In its first 18 months the Trust has funded some excellent work on behalf of all forest owners. But I strongly encourage individual levy payers to take time to inform themselves about this work and to vote for the candidate they believe will best represent their interests,” he says.

For more information about the activities of the Trust, visit www.fglt.org.nz. To find out more about the candidates, the voting process and to cast a vote, visit the Forest Voice website, www.forestvoice.org.nz

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Champion Freight Export Report - September 2015

Sawn Timber - HS 4407

For the month of Aug 2015, FOB Timber export value grew +26% to NZD 82 mln, the highest monthly value for the last five years (since Aug 2010).

The US continues to be the leading market on export value, surpassing China and Australia. It now accounts for 22% of export product year to date. New Private House starts in the US for Aug 2015 were recorded at 1.13 mln, (up +17% on Aug 2014), indicating strong support for further market growth (data release Sept 17, 2015 - U.s. Department of Housing and Urban Development). This growth was further backed by the weakening of the Kiwi dollar against the Greenback.

Export market to Australia remained relatively flat (+3% on Aug 2014), but showing a continued downward trend on an annualised adjusted basis with year on year growth recorded at -5% (equivalent NZD 8mln) for the 12 months to 31 Aug.

Export value to China has returned to growth over the past three months, with Aug recording an export value just short of NZD 16 mln. This is a trend that has not been reflected in log export values to the same market.

Logs - HS 4403

Log export values for August 2015 showed continued weakness in this market down 3% on August 2014. Looking at the 12 months to 31/08/15, Log export value is down 15% equivalent to NZD 360 mln.

Significant declines in Log export value have been experienced across all the top 5 destination markets except for Taiwan.

Source: Champion Freight

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NZ Logger - Bigger, Faster, HUNGRIER...

New Zealand forestry contractors’ love affair with big forestry machines continues, in spite of the tough business conditions.

In this month’s NZ Logger magazine read the first Iron Test on the new top-of-the-range Caterpillar grapple skidder – the Cat 555D. Working just north of Dunedin in the Herbert Forest for Black Contracting, it has been pulling unbelievably big loads with relative ease and, at the same time, reducing its environmental footprint, thanks to the first Tier 4 Final engine to go into the Kiwi bush that is both green and fuel efficient – video footage of the big Cat in action can be viewed on the www.nzlogger.co.nz website, too.

There’s also a guide about how to retain the value of logs produced by processing/harvesting heads through good operator and maintenance practices, which has been put together by timber research consortium, Solid Wood Innovation, to help improve understanding and encourage better practices.

The latest developments in the saw mill and wood processing industry were showcased at WoodTECH 2015 last month and highlights are covered in the magazine.

Plus much more, in the October 2015 issue of NZ Logger, now on sale at selected service stations, or to subscribe for either the printed version and/or the new digital version, visit www.nzlogger.co.nz.

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Earlybird ForestTECH delegates go in to win

Register early for ForestTECH and you're IN TO WIN - We did it for you last year and once again, Team Panasonic in both NZ and Australia have come to the party again this year. See our new and improved offer if you register earely for this year’s ForestTECH 2015 event. It's being run in Rotorua on 18-19 November and Melbourne on the following week, on 24-25 November.

If you register by the early-bird closing date - this Friday 9 October, you're IN the draw to win either a CF-AX2 Panasonic Toughbook or FZ-G1 Fully Rugged Toughpad. The total prize pool is valued at over $6000. Of course the odds of picking up one of the two prizes are pretty respectable as well. Registration details and full programmes for the two events can be found on the event website, www.foresttech.events.

ForestTECH 2015 will be bringing together forestry managers, planners and resource foresters from around the region. It will provide local forestry companies with an insight into new data collection tools and the growing issue facing most forestry companies right now, how best to manage and analyze the quantity of field information being collected from a variety of sources.

Other key themes include new technologies to improve mobile connectivity and data exchange within the forest and also between the forest, and other parts of the business. Leading forestry companies, technology providers and software developers will also be detailing an array of practical forestry apps that have been developed, are available, and are adding value to forestry operations around the world.

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NZ Key Contractors Indicators

Check out the latest changes in diesel prices, interest rates and exchange rates for New Zealand in this week's Key Indicators.

7 OCTOBER 2015
Interest Rates Diesel Price Watch
90-day bill rate = 2.84%Average (excl GST / all regions) = $1.08
Exchange Rates Change (month) = 1%
NZD/USD = 0.6486Change(quarter) = -7%
NZD/Yen = 78.13Change (year) = -19%
Labour Cost Index - Ag/Forestry/Fishing Consumer Price Index
June 2015 quarter = 1107 June 2015 quarter = 1198
Change (quarter) =+0.5% Change (quarter) = +0.4%
Change (year) = +1.7%Change (year) = +0.3%

*Note: The LCI has been re-expressed on a June 2009 quarter base (=1000).

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Timber and Wood Products Market Update

The Global Sawlog Price Index (GSPI) fell in the 2Q/15 to its lowest level in six years, reports the Wood Resource Quarterly.

Seattle, USA. Sawlog prices fell again in the 2Q/15 in most of the 19 regions worldwide that are part of the Global Sawlog Price Index (GSPI). The only regions where prices increased were in Northwest Russia and the Interior of British Columbia. The GSPI fell 1.5% to $72.63/m3 in the 2Q/15. This Index is currently at its lowest level since 2009, and is down 20% from its all-time high four years ago.

Over the past year, sawlog prices have fallen the most in Central European, Eastern European and the Nordic countries (in ranking order) predominantly as a result of a weakening Euro. Domestic log prices in US dollar terms have also declined in Latin America and Oceania, but to a lesser degree.

While log prices have fallen between 15-20% in most regions of the world the past 12 months, average prices were down only seven percent in North America, where healthy US domestic lumber demand and respectable log export volumes from both the US and Canada kept consumption of logs high in 2014 and 2015, according to Wood Resource Quarterly (www.woodprices.com).

The west coast of the US, British Columbia and New Zealand have expanded log and lumber exports to China quite substantially from 2010 to 2014, and these are also the regions that had the highest sawlog prices in early 2015 as compared to their respective ten-year averages. In the northwestern US, there has been a steady increase in log costs since 2009, and prices in 2014 were higher than their ten-year averages. However, during the first six months of 2015, log exports to Asia have been substantially lower than during the same period in 2014. Since last summer, shipments to China have plummeted by 45% to their lowest levels since early 2012. Two major factors have been influencing the decline in log imports to China in late 2014 and early 2015: there is decreased demand for wood in China, and high log inventories within China itself.

The reduced demand for US logs in Asia has resulted in declining sawlog prices in the US Northwest. In the 2Q/15, average prices for Douglas-fir and hemlock were at their lowest levels since 2012.

Source: Wood Resources International

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Preparing students for forestry - Gateway expanded

An expanded Gateway programme of structured work placements will replace the forestry trade academy in New Zealand from 1 January 2016, as industry training organisation Competenz moves to make forestry training available to more schools and better prepare students for a successful career in the forestry industry.

“Moving to an expanded Gateway programme for all forestry work placements will help us improve the way we promote careers in the industry and give students the skills they need to work in a forest,” says Joanne Verry, Competenz Careers Manager.

“Gateway is already in place for many industries including forestry and working well in many schools around the country, so it makes sense to expand the existing forestry Gateway. This move lets us cover more schools, give more students a taste of a forestry career, and increase the range of skills students gain to get ready for that career.

“That’s a win for students and schools, and for forestry employers and the industry as a whole.” Under Gateway, 200 secondary schools in New Zealand will have access to forestry training. This is a significant increase on the 26 schools which currently access forestry training through the trades academy programme, a joint venture between Competenz and the Primary industry training organisation (ITO).

The trades academy arrangement, which will continue until the end of the year, has been a successful partnership between Competenz and the Primary Industry Training Organisation (ITO). The Primary ITO will continue to offer training in sectors other than forestry.

These improvements build on the work Competenz is doing to support forestry careers. This work includes visiting over 150 schools each year, promoting regional forestry ‘heroes’ working in the sector, and playing a leading role in the national ‘Got a Trade? Got it Made!’ campaign. Our dedicated account managers support forestry customers and learners around New Zealand.
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Chuck Leavell on wood is good

Chuck Leavell, Rolling Stones piano player and co-founder of Mother Nature Network discusses the benefits of building with wood and how Europe is lowering its carbon footprint with wood pellets.

Source: Fortune News

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Large reparations and fines after deaths

It is believed 19-year-old Eramiha Pairama was killed instantly after he was struck by a log attached to a harvest-line hauler that had snagged on an obstruction and rebounded into him in January 2013.

But the cause-and-effect reaction against his employers, the Whakatane-based firm Puketi Logging, has taken two and a half years, ending on Thursday with a court judgement totalling $100,000 against the company.

Puketi Logging was sentenced to pay $75,000 in reparation, along with a $25,000 fine, by Judge Robert Wolff in the Tauranga District Court, following a successful prosecution by the Council of Trade Unions that took place in the same court in August.

Judge Wolff said it was clear Puketi Logging, under the directorship of Whakatane businessman Lawrence Harper, had dramatically failed Pairama who was working alone and out of sight of his supervisor, "breaking out" the logs on a hillside above Taneatua on a hot afternoon on Friday, January 11, 2013.

"He was inadequately trained to deal with that sort of log. He should not have been left alone by the foreman that day."

The private action was brought against the company by CTU president Helen Kelly, after WorkSafe NZ chose not to prosecute the company at the time.

More >>


Last week M&A Cross Ltd was sentenced in Rotorua District Court following the workplace death of forestry worker Charles Finlay near Tokoroa in July 2013. The company was ordered to pay $105,000 in reparation to Mr Finlay's family.

A additional fine of $25,000 as a fine was ordered after the company had previously pleaded guilty to a charge of failure to ensure personal protective equipment was worn by an employee.

The matter came to court following a private prosecution launched by the CTU.

Sources: Stuff and NZ Herald News

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Minister's definition of CRI purposes disputed

Redefinition of the purpose of CRIs a serious concern - The New Zealand Association of Scientists (NZAS) is surprised by comments made by the Minister of Science and Innovation, Steven Joyce, in apparent contradiction of the Crown Research Institutes (CRI) Act, 1992. “The Act describes the first two principles of operation for CRIs as undertaking research ‘for the benefit of New Zealand’ and ‘pursuing excellence’.” said NZAS President, Dr Nicola Gaston.

“Minister Joyce has said that ‘Crown research institutes are about commercial science, that's why they're there’, but benefit in the Act is not narrowly defined in terms of commercial outcomes.” said Dr Gaston. “It also includes a requirement for ‘social responsibility by having regard to the interests of the community in which it operates’”.

The Minister’s comments come after widespread concern at the announcement of largescale redundancies at AgResearch, the CRI responsible for agricultural science.

“Inflation has been allowed to erode the core funding that AgResearch receives from the government, exposing its science capability to the short-term priorities of the sector, based on precisely this misunderstanding of the balance of scientific work that CRIs should support," said Dr Gaston. “CRIs need sustained programmes of fundamental research so as to maintain a competitive edge, in order to deliver on their overall purpose.”

Dr Gaston notes that the Act outlines specific circumstances where maintaining capability and excellence is essential.

“The Act states that the Prime Minister may give directions to Crown Research Institutes during emergencies relating to civil defence, and to animal or plant disease. Directions can also be given by ministers in relation to international issues, presumably including issues such as climate change, epidemics and biosecurity. The CRIs must retain expertise for such situations”, said Dr Gaston.

The New Zealand Association of Scientists is a nationwide association of practising research scientists spanning the universities, technical institutes, Crown Research Institutes, government departments, industry, museums, other science institutions, and independent researchers.

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Taupo hosts potential sawmill investor

Last month, Enterprise Great Lake Taupo, Taupo District Council and NZ Trade and Enterprise hosted a number of Fenglin Group Senior Managers and an inter-agency delegation led by MOFCOM (Ministry of Commerce, People’s Republic of China).

Enterprise Great Lake Taupo has, for the past two years, been working with various entities to attract a commercial stakeholder to undertake an in-depth feasibility study to construct, own and operate a new world class sawmill, LVL (laminated veneer lumber) and MDF (medium density fibreboard) plant in Taupo, New Zealand. With support from NZ Trade & Enterprise, the Fenglin Group is currently undertaking this feasibility study, due to be completed by early 2016.

Fenglin Group Chairman, Mr Cui, said that his visit to Taupo was an essential part of the feasibility study process. “We see this project as a true win-win deal for both New Zealand and China,” said Mr Cui. “New Zealand wins as we would process these logs onshore here rather than in China. This would add more value to the product before it is shipped, generating more money into the local economy and creating jobs. China wins as we will have a higher quality product as radiata pine is far superior to the eucalyptus that we currently process.”

Enterprise Great Lake Taupo General Manager, Fritz Frohlke, said that this project will be hugely beneficial to the Taupo economy if it proceeds. “The estimates are around 250 jobs and a US$250m investment to build the plant using world class state of the art technology,” explains Fritz. “What is really exciting is the opportunity to add value to these logs before they go offshore, generating real economic benefit for our district. And of course, using geothermal clean energy will set a new benchmark for this industry and will put Taupo and New Zealand on the global geothermal energy innovation map.”

Taupo is located on one of the world’s largest geothermal fields which are used to provide low cost thermal and electric energy. The area is considered the ‘wood basket’ of New Zealand being surrounded by 250,000ha of the world’s largest stand of renewable and sustainable certified FSC radiata pine forests. Taupo has a long history in the value added wood processing sector.

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Buy and Sell

... and finally ... a four year old rugby joke

Flashback jokes this week >> from 2011 RWC days

Wallabies rugby practice was delayed nearly 2 hours today after a player reported an unknown white powdery substance on the practice field.

Coach Robbie Deans immediately suspended practice while police were called to investigate.

After a complete analysis, experts determined that the white substance unknown to players was the TRY LINE.

Practice resumed after special agents decided the team was unlikely to encounter the substance again!


Now, here's a 2015 RWC joke:

Q: What's the difference between a tea bag and the English rugby team?

A: A tea bag stays in the CUP longer!


Finally, YOU CAN STOP feeling sorry for your dairy farmer mate down the road. The story today is that prices rose sharply again in last night's fortnightly Globaldairytrade auction. Wholemilk powder prices rose 12.9% to US$2,824/tonne and have risen 78% from their August 4 record lows over the last four consecutive auctions.

That's all for our mid-week wood news roundup.

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John Stulen
PO Box 1230
Building X91, Scion Campus, 99 Sala Street
Rotorua, New Zealand
Tel: +64 27 275 8011
Web: www.woodweek.com

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