Coming Up in NZ Logger This Month

The Caterpillar 320 has long been the workhorse for forestry contractors and the introduction of the D-series earlier in the year has made this loader even better. The December-January issue of NZ Logger magazine puts the new 320DFM through the Iron Test to see how much it has improved.

And in the quarterly NZ Timber section there’s a profile on the 60-year-old Mamaku sawmill and how it has managed to resist the recession.

To find out more head to the NZ Logger Website.

Australian ETS Stalemate Threatens NZ Harmony

Difficulties the Australian Government faces in passing its Emissions Trading Scheme underline the folly of New Zealand forcing through its own legislation under urgency, says Labour Climate Change spokesperson Charles Chauvel. The Rudd Government’s ETS may not pass because deep divisions in the Liberal Party Opposition mean the Bill is now struggling to find the numbers it needs. “We still hope that the Australian ETS passes, but if it doesn’t it will certainly underline National’s folly here in ramming through its legislation to harmonise with an Australian scheme that may well not come into being --- at least not immediately, and certainly not in the form planned when Nick Smith committed to harmonisation,” Mr Chauvel said.

The ACT party are echoing these sentiments. "ACT has said all along that it was foolish to ram through the ETS without waiting to see what Australia would do. The change in Liberal Party leadership today has spelt the end of the Rudd Government’s ETS and puts our exporters at risk," said ACT New Zealand ETS Spokesman John Boscawen yesterday. "Our exporters now face much higher costs than those of their Australian counterparts. We will no longer be competing on a level playing field, and this will have dire consequences on our economy.”

Young Engineer Adding Value to Forestry Industry

The New Zealand Young Engineer of the Year title was awarded to Michael Newcombe at a Gala dinner in Wellington last week. After completing his first degree at the University of Canterbury, Michael undertook masterate studies in earthquake engineering at the University of Pavia in Italy. He has continued to build his research and is now working towards completing his PhD on the design of reinforced wood structures using laminated veneer lumber held together by high-strength steel.

The goal of the work is to establish how to build safe multi-storey buildings using this new building material which has the advantage of contributing to sustainability, as well as having potential to establish a new New Zealand industry and adding value to the forestry industry by utilising New Zealand made wood products.

Michael has demonstrated strong practical skills as well as succeeding in his research. He has demonstrated the ability to work at the interface between research and business. He is an excellent communicator, both to his peers through published work and conference presentations, and as a teacher.

The New Zealand Engineering Excellence Awards are the premier awards for the engineering professionals of New Zealand and the Young Engineer award recognises a young engineer who has made an excellent contribution as an engineer and leader through their professional role and community involvement.

Machinery Giant Expects Recovery

Komatsu Forest had expected to supply $32m worth of harvest machinery to Timbercorp over the coming four years for the looming bluegum harvest in its biggest Australian deal. Those plans, which would have seen the global equipment manufacturer expand its South East workshop, collapsed with the downfall of the managed investment scheme company. But an international leader of Komatsu has visited the South East this week to continue the company’s dominance in the region and retain its 50% share of the Australian forest harvest machinery market.

Executive Vice-president Toshiya Yasukawa hopes to position the company to be a major player in harvest of the region’s hardwood plantations after 120 Komatsu machines have long been active in pine plantations surrounding Mount Gambier. Prototype harvesters have already been tested in the district for thousands of hours in preparation to introduce new equipment to the market.

“Since the global financial crisis last year, the market has been very slow — it has been a very weak year so far,” Mr Yusukawa said. “Worldwide demand for wheel-type forestry equipment has been down more than 50% compared to 2008 — it is a huge drop.” However, he said a strong turn-around was expected in the next six to nine months. “Then the bluegum harvesting will have to start and we see it probably improving about 30-35% next year,” he added.

Valmet Komatsu Forest Australian Sales Manager, Brenton Yon said although markets had dropped, the economy and industry were expected to swing back quickly. But he does not expect the new owners of Timbercorp’s forestry estate — Global Forest Partners — to honour the previous supply agreement. “I think they will do it differently — Timbercorp did their own harvesting, but the new owners will probably employ contractors rather than harvest themselves,” he said.

Meanwhile, he said Great Southern had always used contractors for its plantations, which appear set to be taken over by Gunns — a company that may need the hardwood estate to help sustain its Tasmanian pulp mill in a move away from old growth forests.

“We are just getting ready with bluegums and don’t have a lot of machinery in that field, but that is where the growth is,” Mr Yon said. He said pine activity would remain stable and it was previously hoped the bluegum boom would come over the next two years, but that had blown out to three to four years due to the managed investment scheme collapses and economic slowdown.

(Source: The Border Watch)

Bonus Safety Corner - My Seatbelt Saved My Life

Background - A tractor operator was blading off slash to get better access to a lone tree on the edge of a bank on the edge of a skid. As the operator lifted the blade, he felt the tractor start to tip forwards. The bank underneath the tractor then collapsed and the machine fell 25m down a vertical bank into a gully landing nose first on its blade. The machine's fall was broken by slash and fill in the bottom of the gully. The operator was seat belted in, and was able to crawl out of the cab unaided. The operator sustained sprained wrists, minor whip lash and bruising to abdomen where the seat belt dug in. Structurally the machine was undamaged.

Cause - The operator did not realise the full extent of the hazard - thought that he had another 10m of ground in front of him before the drop off.

Opportunities

People on the Move

On the 23rd of November, Romon Spiers was appointed general manager of Flight Timbers Ltd. Mr Spiers has a good background in the industry and will lead the company and its operations forward into the next dimension.

Departing GM Lochy Beckham has been with Flight Timbers for 21 years and prior to that spent 25 years at Pine Milling Co Ltd in Rotorua. He will continue with his directorship role in the company as well as becoming more involved in special projects and specific engineering aspects of Flight Timbers Ltd. Mr Beckham is not putting a definitive time on how long this will continue however he is expecting to be around for “a few years at least”.

ITC Timber Transaction to Proceed

On 31 August 2009 Gunns Ltd and Elders Ltd announced agreement on terms for the sale of the ITC Timber business by Elders to Gunns. The sale was conditional on Australian Competition and Consumer Commission (ACCC) approval of the transaction. The transaction was referred by Gunns to the ACCC for review.

The ACCC announced last week its intention to oppose the transaction, highlighting in particular its concerns about the impact of the acquisition by Gunns of ITC Timber's 50 per cent stake in the SmartFibre wood chip joint venture. The SmartFibre business is a woodchip export joint venture between Elders and Forest Enterprises Australia, operating out of Bell Bay in Tasmania. It has an attributed acquisition value in the proposed transaction of approximately $9.3 million (representing approximately 10% of the total transaction enterprise value).

In light of this decision, Gunns and Elders excluded the 50% stake in SmartFibre from the proposed transaction and the ACC announced this week that it will not oppose the revised proposed acquisition.

It is Gunns’ and Elders’ intention to complete documentation of a final transaction with completion targeted for the coming week.

NZ Home Building Approvals Climb in October

New Zealand home-building approvals jumped last month, extending their gains for a fourth month, ensuring a key element to the nation’s economic recovery remains in place as interest rates remain low. The number of consents issued surged 11.7% to 1,397 in October, seasonally adjusted, from the previous month, according to Statistics New Zealand. Excluding apartments, permits climbed 11.2% to 1,295, the highest since June 2008. The value of home-building approvals rose 9.5% last month from a year earlier to $481 million, while non-residential building approvals fell 5.6% to $329 million.

The consents data adds to signs of a revival in the housing sector, with home sales surging 36% last month from October 2008, according to Real Estate Institute figures this month. Reserve Bank Governor Alan Bollard has vowed to keep the official cash rate near its current record low 2.5% until the second half of 2010 and even though traders expect him to move sooner, he lags behind his Australian counterpart in raising borrowing costs.

“We continue to see residential construction as an important prop for growth over 2010,” said Bernard Doyle, New Zealand strategist at Goldman Sachs JBWere. “Low interest rates, house sales activity, positive net migration and construction sector business sentiment all point to further upside from here.”

Inbound migrants exceeded departures by 18,560 in the 12 months through October, a five-year high, according to government figures. Demand from migrants was a key factor fuelling New Zealand’s housing boom before the financial crisis brought it crashing down.

Commerce Commission Get All Clear to Chase CHH

A Supreme Court ruling has given the go-ahead for the Commerce Commission to proceed with a claim against Carter Holt Harvey Ltd. that could force the timber company owned by Graeme Hart’s Rank Group to refund as many as 60,000 households. The regulator claims CHH is liable for consumers and competitors who suffered a loss due to the forest products company selling timber below the grade claimed on the packaging.

The country’s highest court overturned a previous Court of Appeal ruling that the Commission failed to file proceedings against CHH within the limitation period allowed by the Fair Trading Act. “The Commission is pleased with the outcome of the Supreme Court hearing and will now focus upon progressing its proceedings on behalf of those who suffered loss arising from Carter Holt Harvey’s contraventions,” the regulator said in a statement.

In October 2006, CHH pleaded guilty to 20 charges of breaching the Fair Trading Act for selling timber that didn’t meet the grade advertised. The company was fined $900,000 and an executive was also fined in connection with the case.

The Commerce Commission is calling for homeowners and buildings that may have bought or used the mis-graded timber to contact them and is claiming CHH pay refunds to end-users the difference between what they paid and the fair market value of the lesser grade timber. It’s also pushing for CHH to compensate competitors that may have lost profit as a result of the sale. The timber in question was sold between May 1998 and October 2003.

$3.4 Million Approved for Erosion Control

The Ministry of Agriculture and Forestry (MAF) has approved in principle 19 new applications, worth over $3.4 million, under the East Coast Forestry Project’s (ECFP) 2009 funding round. The projects cover erosion treatments starting in 2010, 2011 and 2012. This funding will provide for a further 2,147 hectares of new erosion control projects in the Gisborne District.

Randolph Hambling, MAF’S Gisborne based regional manager for North Island Sustainable Programmes, believes this is a great achievement for sustainable land management and erosion control in Gisborne where erosion is a severe problem. “Together with the Gisborne District Council, we are committed to continue working with landowners through funding and advising on control measures that can effectively manage erosion and other issues that result from it such as sedimentation and an increased risk of flooding,” he said.

Forestry treatments which include Radiata pine, Douglas fir and Eucalyptus species, account for 69% of the 2,147 hectare area approved. Indigenous reversion treatments account for 11% and poplar and willow pole planting treatments account for 22% of the area approved. “Maori land, which has around 28% of the district’s severe erosion, accounts for 52% of the total area approved,” Mr Hambling said.

The Government established the East Coast Forestry Project in 1992 as a response to erosion damage to the district following Cyclone Bola. The scheme provides grants for various soil conservation treatments.

Buy and Sell

…and finally… the police officer and the granny…

Sitting on the side of the highway waiting to catch speeding drivers, a police officer sees a car puttering along at 22 Km/h. He says to himself, "This driver is just as dangerous as a speedster!"

So he turns on his lights and pulls the driver over. Approaching the car, he notices that there are five old ladies - two in the front seats and three in the back - wide eyed and white as ghosts.

The driver, obviously confused, says to him "Officer, I don't understand, I was doing exactly the speed limit! What seems to be the problem?"

"Ma'am," the officer replies, "you weren't speeding, but you should know that driving slower than the speed limit can also be a danger to other drivers."

"Slower than the speed limit? No sir, I was doing the speed limit exactly. Twenty-two kilometres an hour!" the old woman says a bit proudly.

The Police officer, trying to contain a chuckle explains to her that 22 was the highway number, not the speed limit. A bit embarrassed, the woman grinned and thanked the officer for pointing out her error.

"But before I let you go, Ma'am, I have to ask.. Is everyone in this car OK? These women seem awfully shaken and they haven't made a peep this whole time," the officer asks.

"Oh, they'll be all right in a minute officer. We just got off Highway 162."

And on that note, enjoy the rest of your week. Cheers.

John Stulen
Innovatek Ltd Rotorua Office
PO Box 6160
Rotorua 3043
New Zealand

Ph:+64 7 921 1382
Fax:+64 7 348 1420
Web page: www.innovatek.co.nz

This week's extended issue can be viewed at www.woodweek.com