WoodWeek – 25 January 2017

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Chinese wood products production and demand increased over 2016, fuelling wood import gains from Russia, but also from the USA, New Zealand (logs), Australia (logs), Canada (logs) and Europe (lumber). We’ve got the numbers and the graphs to show what’s happening in the marketplace. Of course, we are now at a seasonal peak with only days to go to the holiday period for the Chinese New Year – 28th January.

Once again we’ve had a fantastic response with people registering for the upcoming Forest Safety Summit conference series in Rotorua and Melbourne. It’s happening in early March and there are still early-bird discounts available online, but not for long! Close to 400 people are now registered in total for these timely gatherings. See today’s issue for some more news on our technology speakers.

The growth in woodlot harvesting is clearly evident in the Taranaki region. WorkSafe inspectors have been quick to note it is a place they need to focus on too. Meanwhile, one of the key financiers of forest equipment in New Zealand, UDC Finance, is now going through the sale process by it’s owner, ANZ bank. In Australia there is concern about potential job losses unless the wood supply is assured for Australian Sustainable Hardwoods in Gippsland.

Around the rest of the wood world, Tenon, which recently sold its USA operations, is in exclusive talks with a potential buyer of its remaining New Zealand assets. In South America, record dry weather has seen Chile lose more than 100,000 hectares to fires this month. In British Columbia the government has agreed to listen to the logging contractors who are saying they need the politicians’ help. Together they will look to see what needs to change in order to strengthen and ensure sustainability for contractors, suppliers and the communities where they live and work.

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China imports rebound

China's Imports Rebound in 2016 - led by Lumber (+19%) and Logs (+9%) - Chinese wood products production and demand increased in 2016, fuelling log and lumber import gains from Russia, but also from the USA, New Zealand (logs), Australia (logs), Canada (logs) and Europe (lumber).

Final year-end statistics for 2016 show that China's imports of logs and lumber have rebounded strongly from the slowdown in 2015. Softwood lumber imports soared to new heights and recorded the highest import volumes ever.

China imported 48.7 million m³ of logs in 2016, an increase of 9% from 2015. Of the total log imports, softwood log imports were 33.7 million m³ (+13% as compared to 2015), while the hardwoods were 15.1 million m³ (+2%). China imported 31.6 million m³ of lumber in 2016, up 19% over 2015. Of the total lumber imports, softwood lumber imports were 21.1 million m³ (+21% as compared to 2015), while the hardwoods were 10.6 million m³ (+15%).

These and other year-end statistics and analysis will be featured in the February issue of WOOD MARKETS' monthly China Bulletin that will be released after Chinese New Year in February.

With steady to increasing demand in 2016 and with well-balanced inventories, both softwood log imports and prices (in US$/ m³) increased throughout the year. New Zealand softwood log exports continue to dominate exporters to China and increased by 12% in 2016 at 11.6 million m³. This was followed by Russia (9.2 million m³), USA (4.5 million m³), Australia (3.3 million m³) and Canada (2.8 million m³). The 2016 softwood log import volumes have only been exceeded by the record volume in 2014 of 35.5 million m³.

Source: Woodmarkets.com

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Champion Freight Export Report

Thanks to the great team at Champion Freight we've got the latest export market activity update for you in a series of really self-explanatory charts.

Click here to download the Champion Freight reports.

Source: Champion Freight

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ANZ to sell UDC Finance to HNA Group

ANZ Bank New Zealand Ltd announced earlier this month it has agreed to sell its asset finance business, UDC Finance, for NZ$660 million to HNA Group, a Fortune Global 500 company focused on tourism, logistics and financial services.

ANZ New Zealand CEO David Hisco said the sale followed a strategic review and was in line with ANZ’s strategy to simplify its business and focus on its core banking activities.

The purchase price of NZ$660 million represents a price-to-book ratio of 1.6 times net assets of NZ$424 million as at 30 September 2016.

“UDC Finance is a great business which is performing well,” said Mr Hisco. “We’re extremely proud of what our teams have achieved over the years providing specialist asset-based finance to New Zealand businesses for plant, vehicles and equipment.”

Mr Hisco said the purchase of UDC Finance by one of the world’s largest asset finance and leasing companies was a significant vote of confidence in the New Zealand economy.

“HNA is well placed to invest in specialist asset finance products and systems which will help UDC expand further in the future,” said Mr Hisco.

HNA doesn’t currently operate in New Zealand so this sale will maintain competition in the asset finance and leasing market which is good for customers. HNA intends to preserve UDC’s operations, offering ongoing employment to all existing UDC employees and maintaining existing customer lending.

Since its founding in 1993, HNA Group has evolved from a regional airline based on Hainan Island into a global company with over US$90 billion of assets, US$30 billion in annual revenues and nearly 200,000 employees across North America, Europe and Asia. The financial arm of HNA operates a diverse set of businesses in equipment leasing, insurance, and credit services, including China’s largest non-bank leasing company, one of the world's largest aviation finance businesses, one of the world’s largest container leasing businesses, and Europe’s largest trailer leasing business.

“UDC’s highly diversified portfolio offers significant growth opportunities in Australasia and supports HNA Group’s disciplined approach to expand our core tourism, logistics and financial services businesses,” said Adam Tan, Vice Chairman and CEO of HNA Group.

“We are excited to welcome UDC Finance to the HNA Group family and we look forward to working with their experienced management team as they continue to support the growth and aspirations of New Zealand businesses, investors and consumers.”

The UDC sale is subject to closing steps and conditions including engaging with investors on the replacement of the Secured Investment program and regulatory approvals. Completion is expected late in the second half of the 2017 calendar year.

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Safety Summit proving popular

“Technology is vital in many new safety improvements in the forest industry – and the upcoming Forest Safety Summit will be showcasing them and the people who established them,” says Forest Industry Engineering Association event manager, Gordon Thomson.

Since early December, FIEA has been extremely busy with Safety Summit registrations. The industry response has been huge, says Thomson. Forest industry leaders have been very proactive in safety even before health and safety laws were reformed he added.

Only 4 exhibitor stands are still available and well over half of the conference seats are sold already. Now is the time to register to make sure you don't miss out. Special offers are now being made available to members of other industry associations across the forest industries. To take advantage of this offer, go to http://forestsafety.events

“At our March conference people will see technology is key to new safety advances that industry leaders have made. The speed of adoption by practical forestry people has been encouraging. Many innovators have already provided safety outcomes for their teams and clients. So, the case studies they will bring are proven to deliver results,” adds Thomson.

“For the first time, FIEA has teamed up with the Forest Industry Safety Council (FISC) to organise a workshop as part of the Safety Summit,” says Thomson. “Working with Fiona Ewing of FISC has led us to include a series of workshops and panel sessions for people to interact – from the forest floor to the CEOs.”

Two key technology speakers are:
  • Richard Lawler, Director of Engineering, Forestry for John Deere Forestry from USA. Richard has worked closely with developments in steep slope harvesting in both North America and New Zealand.
  • Jim French is an industry solutions specialist across Australasia for Teletrac Navman. For over 20 years he has shared his passion for GPS asset tracking with practical contractors to satisfy their needs.

FIEA is pleased that so many local industry leaders and safety champions have come forward to support the 3rd FIEA Forest Industry Safety Summit. This conference series sold out in previous years, and is running again in March 2017 in Rotorua and Melbourne.

The summit runs 1st & 2nd March 2017 in Rotorua at the Distinction Hotel. The following week it moves to the Bayview Eden Hotel in Melbourne running on 7th &8th March.For full details visit: http://forestsafety.events

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Forico plants up large

Forico last week demonstrated its long-term commitment to the plantation forestry sector in Tasmania as it completed its extensive 2016 planting programme. A total of 7 million seedlings (more than 6,300 ha) were planted during the season from September to early January.

“This is perhaps the largest current plantation establishment programme by a single company in Australia,” said CEO, Bryan Hayes. More than 60 people have been engaged by Forico and its contractors to achieve the target area of reforestation at a cost of AU$15m. “We are especially grateful for the contribution of all of our service providers and our staff in achieving this historic result,” said Mr Hayes.

Since its establishment by forestry investment manager New Forests in September 2014, Forico has planted 3,582 ha in 2015 and now 6,300 ha in 2016, clearly demonstrating that it is here for the long term.

All Forico land and forests, both plantation (100,000 ha) and native forests (81,000 ha) are certified against the Forest Stewardship Council (FSC) Forest Management standard and PEFC Australian Forestry Standard.

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Taranaki forest harvest rising

Taranaki's logging contractors are gearing up to harvest a bumper crop over the next few years as trees planted more than two decades ago begin to mature.

Many of the plots around Taranaki were planted in the 90s, with most taking between 25 and 30 years before they were ready to be cut.

New Zealand Forestry regional manager Cam Eyre said there is around 19,000ha of Radiata pine in the Taranaki region, 80 per cent of which was due to be harvested from 2015 for the next six or seven years.

"It's all over the place, down close to Whanganui, it will all come through New Plymouth's port, and then out near Te Kuiti, out on the Forgotten World Highway all that wood from all over the place comes through Port Taranaki which is good," he said.

Port Taranaki has already seen an increase in logging exports coming through in the last year. A record volume of 357,000 JAS (Japanese Agricultural Standard tonnage) was exported from the port in the 2015-16 financial year, an increase from the 209,000 JAS of the previous year, which resulted in an 80 per cent increase in revenue for the port from its log business in the 2015-16 financial year. "Signs are good for that growth to continue," Port Taranaki chief executive Guy Roper said.

"Our half-year throughput to 31 December is up a third on the same six months last year, and we expect trade could grow by as much as 10 per cent a year across the next four years."

In early January, Eyre organised a breakfast for about 150 forestry staff to remind them to look out for themselves and their work mates as they returned to work after the holiday period.

"It's a reminder to the boys about the risks that are involved with working in the forests and this is a really hot time for us, a lot of the fatalities that happen in the forest usually happen in those first few days when everyone goes back to work, so it's a way of getting everyone together and really having a real health and safety focus when you start up," Eyre said.

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Source: Stuff news

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Log supply concern for Gippsland mill

Recently, Australian's main media outlets covered the story of potential job losses in Gippsland, with a mill that processes wood from Victorian forests. They were suggesting 250 jobs are under threat unless a substantial supply of timber is secured soon. The closure threat from Australian Sustainable Hardwoods in Heyfield comes at a difficult time for the Andrews government in Gippsland, after energy giant Engie announced it would close the Hazelwood power plant at Morwell.

The mill processes Victorian ash species hardwood, including from the politically and environmentally-sensitive central highlands, home of the endangered Leadbeater's Possum. It is a major employer in the town of 2000 people. State-owned agency VicForests says the supply of ash timber needs to be reduced from current levels because of modelling around future timber resources.

Mill management were to meet with staff to outline their plight. It is understood without a contract for supply of at least 120,000 cubic metres of wood by June next year, it will be forced to shut down. The mill processes 155,000 cubic metres of hardwood every year and has over 250 direct employees and contractors, the company says.

The Herald Sun reported that the despite repeated attempts to engage with the Government to attain a new long term supply agreement, Agriculture Minister Jaala Pulford and her staff have refused to meet with ASH representatives. Ms Pulford’s spokesman said VicForests was continuing to negotiate with ASH about a future sale agreement.

For more coverage by ABC News, click here.

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Drone crash probably a good thing

Dreams of the drone industry have crashed into reality- Attendees at the recent Consumer Electronics Show could play around with a dizzying array of unmanned aerial vehicles. Drones that take selfies. Drones equipped with thermal imaging cameras to see at night. Drones that help fishermen chase their prey.

No use is too niche as drone-makers chase a market that's forecast to grow an average 32 per cent annually over the next decade to reach US$30 billion, according to ABI Research. But away from the showroom floor, a chill has settled on a once-hyped market.

France's Parrot SA, the second-largest maker of non-military drones, is laying off a third of its staff because margins on its consumer drones were "insufficient to deliver profitable growth".

That's a remarkable statement from the company that pioneered cheap consumer drones in 2009 and now focuses on those priced between US$100 and US$500. Almost 60 per cent of Parrot's revenue is from drones.

There are two reasons for Parrot's woes. First, it's withering under the competitive onslaught from China's DJI, the undisputed king of non-military drones. DJI makes higher-end models pitched at hobbyists and businesses, which use them for everything from crop inspection to construction. The venture-backed company controls the entire process from design to manufacturing, making it more efficient than outsourcing rivals, and with better products. Lately DJI has gotten more aggressive on price, competitors say.

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Source: Stuff News

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BC loggers look for support - and get it

BC's loggers are in it for the long run: but struggling to support rural communities - Independent timber harvesting contractors—the economic backbone of British Columbia’s rural communities—are struggling in a business climate that doesn’t support locally owned forestry businesses.

The annual loggers convention was held last week in Vancouver. With key politicians in attendance they are seeking to find out what needs to change in order to strengthen and ensure sustainability for contractors, suppliers and the communities where they live and work.

“Recent industry polling tells us that two in three coastal British Columbians feel government should be doing more to support the forest industry,” said David Elstone, TLA Executive Director. “We agree. We want timber harvesting contractors to be in it for the long run too.”

To that end, the TLA has also been working to build relationships with BC’s rural communities.

“TLA members live in these towns, build their businesses in and around them, support local community groups and are vital to the economic health of the entire province,” explained Elstone. “We talked to community leaders last year and released a report, “Community Perspectives on the BC Coastal Forest Industry” that gave some insight into coastal communities’ views on forestry.

When you get down to the nuts and bolts of it, it’s clear timber harvesting contractors are critical. “Without contractors, BC’s forest industry would grind to a halt,” said Elstone. “They are the first link in the supply chain. And they are at risk of giving up.”

“We're pleased that Minister Thomson joined our conference,” said Elstone. “He and his staff are working hard on the Forest Sector Competitiveness Agenda and we appreciate how much they believe in and work for the forest industry.”

Late last week the BC government agreed to appoint an independent facilitator to carry out a province-wide "Forest Industry Contractor Sustainability Review".

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Photo: David Elstone, TLA

Source: Truck Loggers Association, BC, Canada

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Tenon in talks to sell remaining assets

Tenon, which sold its US operations for US$110 million, is in exclusive talks with a potential buyer of its remaining New Zealand assets, which would see the former Fletcher Challenge entity wound up.

In late December the company distributed US$71 million to shareholders, cancelling one out of every two shares held and returning $2.40 per cancelled share. The company has entered exclusive talks with one party with the goal of signing a sale and purchase agreement for its Clearwood New Zealand business, it said in a statement. If a deal is signed, surplus cash would be returned to shareholders and the company liquidated at an estimated cost of US$8 million.

"The proposal is conditional upon a number of items (including Tenon shareholder and court approvals) which Tenon is currently assessing," it said. "Grant Samuel will be asked to prepare an updated independent report to Tenon shareholders once final agreement has been reached."

The New Zealand business was valued at between US$63.3 million and US$74.1 million in independent adviser Grant Samuel’s report on the US transaction. Its sales rose 5 percent to US$81 million in the year ended June 30 while earnings before interest, tax, depreciation and amortisation more than doubled to US$12 million.

Tenon said the Grant Samuel report will update the "average adverse currency movements" among other things.

Separately, Tenon said Rodger Fisher will leave the board at the end of the year and will be replaced by Wood Engineering Technology director Stephen Walker.

Tenon shares last traded at $2.40.

Source: BusinessDesk via Scoop

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Chileans battling worst forest fires ever

Vast woodland fires in the center and south of Chile have caused "the biggest forestry disaster in our history," President Michelle Bachelet said Monday, canceling a trip abroad to supervise the emergency.

A total of 130 square kilometers (500 square miles) have been charred, mainly in sparsely populated rural areas, according to the National Emergency Office.

Although most of 150 fires that broke out this summer season were under control or extinguished, 48 are still raging.

Three firefighters have died and another three were wounded battling the flames.

Soldiers and dozens of aircraft have been brought in to help.

Bachelet scrapped a trip to the Dominican Republic for a summit of Latin American and Caribbean leaders in order to oversee the official response.

Mexico and Argentina responded to an international call for assistance from Santiago by lending fire fighters.

In the central regions of O'Higgins and El Maule, the fires were considered the worst in the past 50 years, and a "state of catastrophe" has been declared for them.

Fires are common in Chile's parched woods during summer. Most are caused by human activity.

But this year was considered worse because of a drought that has built up over the past eight years, attributed to climate change. A 10-day run of high temperatures also contributed.

More >>

Source: Yahoo News and Firefighternation

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NZWOOD timber design finalists announced

Finalists Announced for Resene NZ Wood Timber Design Awards - NZ Wood has announced the eagerly-awaited Stage One Finalists for the Resene Timber Design Awards 2017.

“We’re delighted to have had strong support again this year,” said Debbie Fergie, NZ Wood’s Promotion Manager. “Our stand out this year has been multiple entries by architects and designers.”

She explained that competition had been extremely tight, with many entries missing out by only one point. “Thank you to everyone who entered the awards,” she said. “We hope you will be encouraged to enter again in the future.”

Stage Two of the judging process will take place on February 8, when category winners and the supreme winner will be decided. All winners will be announced at a gala awards dinner at the Pullman Hotel in Auckland on 9 March 2017.

This year’s judging panel comprises professionals from a variety of engineering and architectural backgrounds, who are eminently qualified to assess the innovation displayed and quality exhibited.

Dr Michael Newcombe – BE Civil (Hons), MSc, PhD, CPEng - is a Director and Senior Structural Engineer at Enovate Consultants and has a masters from the European School for Earthquake Engineering and a Doctorate in the design of multi-storey timber buildings. His recent professional experience includes over two years as general manager of an Auckland-based structural engineering office, designing and reviewing numerous residential, industrial and commercial structures. While proficient with concrete and steel design, he is sought after as a timber technology expert by a broad range of clients and teaches timber engineering at professional seminars and University.

Mike’s roles within Enovate are business development, structural design and review of new residential, commercial and educational projects, and the design and development of alternative structural systems.

Architect Pip Cheshire is a fellow of the New Zealand Institute of Architects, a member of the Auckland City Council Urban Design Panel, and Green Star Accredited Professional. He is the founding principal of Cheshire Architects Ltd (2004), a move that followed 13 years with Jasmax as a director and, later, managing director.

Dr Duncan Joiner, Chief Architect with the Ministry of Business, Innovation and Employment, has experience in architectural practice, research and education. He holds a PhD from London University, is a fellow of the NZIA and a life member of the Designers Institute of New Zealand (DINZ).

In addition, the Novel Application of Fibre Award will be judged by Doug Gaunt, a civil engineer with extensive research experience. Gaunt is Science Leader, Wood and Fibre at Scion in Rotorua. He specialises in all aspects of timber engineering and leads research into new timber products and systems.

Finalists selected in the eight categories are:
  • Residential Architectural Excellence, sponsored by Carter Holt Harvey Woodproducts NZ: For the innovative use of timber resulting in a distinctive visual impact on a residential building, either stand-alone or multi-unit/multi-storey project.

  • Commercial Architectural Excellence, sponsored by Timberlab Solutions Ltd:For the innovative use of timber resulting in a distinctive visual impact on a commercial, industrial, or public building environment.

  • Engineering Innovation, sponsored by NZ Timber Design Society: For the innovative use of engineered timber, resulting in a distinctive technical/structural impact on a residential, commercial, industrial or public building environment.

  • Excellence in Engineered Wood Products, sponsored by Nelson Pine Industries and XLam NZ: For the innovative use of Engineered Wood Products (EWP), resulting in a distinctive impact of the EWP properties and/or aesthetics on a residential, commercial, industrial or public building environment.

  • Interior Innovation, sponsored by Taranakipine: For innovative use of wood or a wood panel product as a signature feature, in a predominantly wood building, adding ambience, flair and practicality.

  • Exterior Innovation & Infrastructure, sponsored by Smartclad: For any wood or wood panel product that forms the exterior of or is an exterior structure, be it residential or non-residential which highlights the versatility and flexibility of wood while enhancing the structure’s aesthetic.

  • NZ Specialty Timber Award, sponsored by NZ Farm Forestry Association: The use of specialty timber in a manner that best highlights its unique characteristics. This category is open to entries from across the spectrum of NZ grown timber usage from furniture to buildings, facilities to objets d’art.

  • Innovation of Student Design Award - (NEW CATEGORY), sponsored by Juken NZ: Three projects by third year students were nominated by each academic program for architecture or engineering (Victoria, Auckland & Canterbury). Judges will select the final two winners. NB: As entries in this category are concept designs not actuals, no images are available for publication.

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Exhibition showcases modern wood

Not your grandfather’s two-by-fours: A new exhibition showcases modern wood construction - Here we are in the year 2017, getting ready to ride in robot cars and eat meat grown in labs, but a skyscraper built out of wood still seems outlandish. Why? Wood is one of the world’s sturdiest and most versatile building materials. It has a single raw ingredient that doesn’t require intensive energy to produce: just trees.

The Horyuji temple precinct in Japan has wood structures that have been standing since about 700 AD. The onion-domed wooden churches on Russia’s Kizhi Island date to the early 18th century.

Today we have an innate distrust of tall wood buildings, a sense that they’ll roar into flame at the first spark. This distrust is, in part, a legacy of terrible 19th-century conflagrations like the Chicago Fire of 1871 and the Boston Fire of 1872. Those disasters and others led to the adoption of fire codes that prohibited wood structures above a certain height, saving lives in the process.

But it’s the 21st century, and a new exhibition at the National Building Museum in Washington challenges us to let go of our fear and embrace the future. The structural wood products that have recently entered the market are not your grandfather’s two-by-fours. Engineered timber beams have been proven in tests to be just as fireproof as steel, and arguably more so, since their cores as less likely to melt in a fire. They are also surprisingly strong.

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Source: The Architects Newspaper

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Buy and Sell

... and finally ... This is interesting, nay ... astonishing!

1917 to 2017 Its amazing what can happen in a 100 years.
(I know this was America, but it still makes the point.)

ASTONISHING -- THE YEAR IS 1917 - The year is 1917 "One hundred years ago." Let’s see what a difference a century makes!

Here are some statistics for the Year 1917:
• The average life expectancy for men was 47 years.
• Fuel for cars was sold in drug stores only.
• Only 14 percent of the homes had a bathtub.
• Only 8 percent of the homes had a telephone.
• The maximum speed limit in most cities was 10 mph.
• The tallest structure in the world was the Eiffel Tower.
• The average US wage in 1910 was 22 cents per hour.
• The average US worker made between $200 and $400 per year.
• A competent accountant could expect to earn $2000 per year.
• A dentist $2,500 per year.
• A veterinarian between $1,500 and $4,000 per year.
• And, a mechanical engineer about $5,000 per year.
• More than 95 percent of all births took place at home.

Ninety percent of all Doctors had NO COLLEGE EDUCATION! Instead, they attended so-called medical schools, many of which were condemned in the press AND the government as "substandard."

• Sugar cost four cents a pound.
• Eggs were fourteen cents a dozen.
• Coffee was fifteen cents a pound.
• Most women only washed their hair once a month … and used Borax or egg yolks for shampoo.
• Canada passed a law that prohibited poor people from entering into their country for any reason.

The Five leading causes of death were:
1. Pneumonia and influenza
2. Tuberculosis
3. Diarrhoea
4. Heart disease
5. Stroke

• The American flag had 45 stars ...
• The population of Las Vegas, Nevada was only 30.
• Crossword puzzles, canned beer, and iced tea hadn't been invented yet.
• There was neither a Mother's Day nor a Father's Day.
• Two out of every 10 adults couldn't read or write.
• And, only 6 percent of all Americans had graduated from high school.

Marijuana, heroin, and morphine were all available over the counter at local corner drugstores. Back then pharmacists said, "Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach, bowels, and is, in fact, a perfect guardian of health!" (Shocking or what?)

Eighteen percent of households had at least one full-time servant or domestic help.
About 230 murders were reported in the ENTIRE USA!

It is almost impossible to imagine what the world may be like in another 100 years.

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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