WoodWeek – 22 March 2017

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Greetings from your WoodWeek news team. This week is bursting with good news from the forest. Of course, you’d expect that with the International Day of Forests being celebrated yesterday here in New Zealand and Australia (and today elsewhere on the planet).

This internationally recognised day is a chance to remind everyone how our forests bring much more than just income in economic terms. Slowly but surely, the environmental values of our land-based industries are coming to be acknowledged in the “accounts” that make up each industry’s total contribution to the national economy – both short and long term.

We applaud the Forest Owners Association for launching a recently commissioned report by NZIER highlighting the export earnings and environmental benefits that forests deliver both regionally and nationally.

Their report launch dovetails nicely with another report released by a cross- parliament party group called GLOBE, an independent one by Vivid Economics (echoed by Pure Advantage) that supports many of the findings of the FOA-NZIER study. In short, FOA is calling for the government to add a “Satellite Account” to its national accounts to explicitly credit forestry’s environment benefits our country enjoys.

Adding to this, Scion is seeking long-term views on our industry’s future. You have only a few days left to participate in Scion’s first long term industry outlook. Where is New Zealand’s forestry industry heading by 2025 and 2035? Scion is currently conducting a costs and markets outlook. Similar to our quarterly log price outlooks, the long term trending is done by eliciting information across the value chain.

Finally, to see what’s been achieved in export markets in the past 12 months, we've got the latest export market activity update for you in a series of really self-explanatory charts. Thanks to the great team at Champion Freight for this.

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Report highlights forest industry value

New Zealand forest industry important nationally, regionally and environmentally – NZIER Report

A report on the plantation forest industry has highlighted its value to national and regional economies, as well as forestry’s beneficial effect on New Zealand’s ecology. The NZIER Report was commissioned by the New Zealand Forest Owners Association and Farm Forestry Association.

The Report has found the forestry and logging sector is worth $1.4 billion to the national GDP, making a substantially larger contribution GDP than either the sheepmeat or beef sectors. Forestry is hugely important for many provincial economies, such as Gisborne – Tairawhiti, where it contributes nearly 5.5 per cent of the region’s GDP.

The Chair of the Forest Owners Association Peter Clark says the public has underestimated the forest sector’s role and importance.

“Knowledge of our sector has generally gone under the radar. This report will redress some of the lack of understanding. Our sector is growing faster than horticulture.”

“For the first time since 1882 if old records are accurate, the value of our forest product exports is now exceeding the total value of red meat exports. That represents a sea change in our primary export mix.”

“The Report details that our production has gone from 10 million cubic metres of timber in 1989, to 28.7 million cubic metres last year,” Peter Clark says.

MPI forecasts New Zealand forest product export returns to reach $6.15 billion by 2020, from the current $5.14 billion in 2016, with increasing returns from sawn timber, wood panels pulp and paper all contributing.

But NZIER says the fact that the very significant environmental contribution of forestry is not usually factored into its economic value, is a constraint on the industry.

NZIER suggests that the lack of a ministry or department dedicated to forestry is a constraint on the industry. NZIER also recommends the establishment of a satellite account to reflect the growing importance of this sector. Satellite accounts extend existing information on industries to include social and environmental values.

“A satellite account either connected to the tourism satellite account or as a stand alone satellite account would assist in reflecting forestry’s wider benefit to New Zealand”, NZIER says.

The report cites a Bay of Plenty 2014 study into ecosystems services (for example; carbon storage, erosion control, water quality, biodiversity and recreation) which if generalised across New Zealand, would provide $9.6 billion of ecological and social value from plantation forestry to New Zealand every year.

“At the moment” Peter Clark says “everyone, including NZIER, is making assumptions based on some studies in some regions. We really do need much better information on the national environmental and social benefits of forestry, even if there’s reasonably good information on carbon capture for instance.”

“The government’s Biodiversity Action Plan 2016 – 2020 set 2017 as the target date to ‘investigate the need and potential to produce New Zealand environmental-economic accounts’,” Peter Clark says. “So in implementing this undertaking, we’d love to see the government put the environmental ruler across our forest sector.”

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A day to celebrate forests

Celebrating forests - Yesterday was 'International Day of Forests', a day celebrated annually on 21 March to recognise and promote the many benefits that forests bring to our lives.

Forests play a very important role in New Zealand. The Forestry industry is the 3rd largest primary industry exporter, providing over 26 000 jobs and almost 5 billion dollars to the economy annually. Forestry also benefits the environment by stabilising soil, lifting water quality, storing carbon and supporting biodiversity. Not to mention that most of our homes and much of our furniture are constructed from trees, or products derived from trees. But the benefits of forestry extend further still.

Scion, the Crown research institute dedicated to growing New Zealand’s economic, environmental and social wellbeing through trees, has a unique understanding of the role of forests in our past present and future. To mark the 2017 International Day of Forests, Scion staff have shared what growing New Zealand through trees means to them.

Doug Gaunt, wood and fibre science leader, pointed out the huge benefits the New Zealand economy receives from forests. “The wood processing industry is huge for New Zealand – and there is so much potential for increasing value onshore by converting trees into products like structural and appearance grade timber (doors, window framing etc), engineered wood products, chemicals, fibre based products, adhesives, buildings and so much more.”

Sustainability was top of mind for biopolymer and chemicals research leader, Dr Dawn Smith “We can make incredible things with chemicals and fibre derived from trees – from 3D printed items, to biobased glue, there’s so much potential. Forests as a renewable resource are well placed to be the heart of a biobased economy for NZ.”

Sustainability was also a priority Dr Paul Bennett, science leader of our clean technologies programme, “We could replace the coal in industrial processes and produce liquid biofuels from trees. Some of the most promising bioenergy production comes from forest biomass and there’s potential to use forestry and wood processing waste in the short term and have a big impact. But we need to plant more forests so we can use more bioenergy in the long term.”

Scientist Steve Wakelin said the role forests play in sequestering and storing carbon is also a huge benefit to New Zealand and the world. “In the post-Paris Climate Agreement environment, trees are more important to New Zealand than ever. They are likely to play a big part in meeting our target reduction in greenhouse gas levels while still providing a wide range of other benefits.”

Environmental economist Dr Richard Yao on what prosperity from trees - mai i te ngahere oranga, means to him, said “The clean, fresh air that forests produce is the first thing that comes to mind. And the recreational opportunities that come from spending time in forests; exercising and watching the bird-life. When you add the economic value from selling the timber and the environmental value of avoided soil erosion, then it’s easy to appreciate how forests contribute to our economic, social and environmental wellbeing.”

Forests provide a valuable way of using land while protecting it at the same time. They support life, protect soil, are climate friendly and provide renewable materials and energy for people to use. Scion’s work ensures that forestry continues to flourish so that all of New Zealand can prosper for a long time to come.

The United Nations General Assembly proclaimed 21 March the International Day of Forests in 2012. The theme for 2017 is Forests and Energy.

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Funding support for people in timber

Timber Associations of the past may have vanished but some of the foundations they laid are still supporting the timber industry.

Take the example of the Northern Timber Association (NTA) which has largely been “in recess” since around 2000.

While NTA has led a name-only existence since then, the Directors have met annually and in November 2014 decided to consider an alternative pathway forward. The selected new direction was to establish a charitable trust, and in January 2016 the Northern Timber Association Charitable Trust was formally registered as a charity with the former directors of NTA being appointed Trustees.

Armed with the remaining funds of the former NTA, this Trust will provide funding support to approved applicants from the geographical region previously covered by NTA, with some particular emphasis on assisting educational opportunities for those actively working in the timber industry or seeking to do so.

The geographical area is described as being bounded in the North by the North Cape, and in the South by a line drawn east-to-west from Opotiki through Turangi to Taumaranui and then to Awakino in the west.

Applications for funding support that may be considered by the Trustees include:
  • Funding, promoting and supporting education that will benefit the timber industry
  • Establishing scholarships and other incentives for educational opportunities that will benefit the timber industry
  • Providing scholarship opportunities for University and Technical Institute students focused on timber
  • Funding and supporting timber industry training courses via BCITO, Competenz, Wood Wise and the like.
  • Supporting other registered charitable entities such as Rotary Young Leadership, Spirit of Adventure, Outward Bound, NZ Timber Museum and others of similar ilk.

Some applications have already been actioned for the YE 31 March 2017, namely via Massey University Albany campus, and Competenz.

Future applications may be submitted in writing to The Secretary at 1/26 Pleasant Rd, Glen Eden, Auckland 0602.

Contact for further information about the Trust is Ian McGregor on 027 495 6182

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Champion Freight Export Report - March 2017

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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Have your say - Industry outlook survey

You have a few days left to participate in Scion’s first long term industry outlook

Where is New Zealand’s forestry industry heading by 2025 and 2035?

Scion is currently conducting a costs and markets outlook. Similar to our quarterly log price outlooks, the long term trending is done by eliciting information across the value chain. No single person can see the full picture. This is why Scion collates people’s perspectives, summarise the results and share the outcome exclusively with those who provided inputs. Participation is strictly confidential and often includes the views of people who sit on the other side of the negotiation table.

This is the first time for this kind of outlook to be generated in the New Zealand forestry industry and we invite your participation. The outlook includes aspects on the future of forestry, harvesting, domestic processing, ports, transport & shipping, and the international markets. Different people will be able to provide information on different parts of the supply chain, and collectively, they paint the full picture.

The outlook is hosted at the following URL: https://www.surveymonkey.co m/r/ScionMarketOutlook
Please participate before Monday 27 March 2017.

This work is funded by STIMBR.

For more information, contact carel.bezuidenhout@scionresearch.co m

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NZ needs more trees, less beasts

We need more science, more trees, fewer beasts to beat carbon emissions - A combination of technology breakthroughs, much more plantation forestry, and a big switch away from pastoral, particularly dairy farming, are identified as the key elements of any approach New Zealand takes to reducing its carbon emissions to a net zero level, according to a new report sponsored by the New Zealand chapter of GLOBE, a multi-party, global parliamentary grouping.

On current policy settings, the report by London-based Vivid Economics says New Zealand will remain ‘off track’ to meet its climate change policy commitments.

The ‘Net Zero in New Zealand’ is Vivid's second report on this country. It was behind the 2012 report for the green business group, Pure Advantage.

The report coincides with today’s release of a report card on New Zealand’s environmental performance from the OECD, which also highlights emerging constraints on the country’s agricultural capacity, particularly the impact of further expansion of dairying, as well as shortcomings in its urban planning regime and urgent need to implement announced policies to deal with freshwater quality improvement.

Early reporting suggested Vivid was urging the culling of the national dairy herd by up to 30 percent, but its managing director, John Ward, said any such adjustment would be of long term changes in land use and that the report aimed to show scenarios rather than hard and fast predictions about the future.

It poses two key scenarios - "Innovative NZ" and "Resourceful NZ" - as poles between which the future might play out. The Innovative scenario delivers more emissions reduction gains through scientific discoveries, such as a vaccine to lower methane emissions from cows, while the Resourceful scenario assumes a doubling in plantation forestry and reversion to native bush of currently marginal, eroded land.

Among the report's main conclusions is that "it is possible for New Zealand to move onto a pathway consistent with domestic net zero emissions in the second half of the century, but only if it alters its land-use patterns".

There was an "acute need" to upgrade the quality of energy and land-use modelling tools to help support a plan to achieve low carbon emissions.

New Zealand's already high level of renewable electricity generation made it unusual for a developed country, with most reducing electricity generation emissions as their earliest priority.

However, there was a major opportunity to electrify as much of the public, private and freight transport as possible to substantially reduce carbon emissions from vehicles and to do the same for the production of low-grade industrial heat.

The country would have choices as it moved towards to "net zero-consistent trajectory", including "the extent to which it is able to make use of new technologies and the extent to which it needs to embark upon substantial afforestation".

"With some constraints, there will be an opportunity to flexibly adjust the rate of afforestation as the pace of new technological development and deployment becomes clearer."

"If it chooses to substantially afforest and it is fortunate enough to benefit from the extensive availability of new technologies, it could be possible for the country to achieve domestic net zero emissions by 2050," says Vivid. However, forest planting would only be a useful approach until around mid-century.

"In the second half of the century alternative strategies will be needed," the report says, recommending the development of "a trajectory for emissions price policy values, to apply to all government assessments and analyses".

Far higher carbon prices than today's $17-plus would be required if the emissions trading scheme was to start changing investment and public behaviour and was necessary to prevent the potential for "asset-stranding" where carbon prices render some industries unviable.

The report raises the significant potential contribution to lower emissions if the country's aluminium smelter, steel producers and oil refinery were to cease operations, but does not recommend this or include those outcomes in its scenarios.

Vivid also notes that any such policy would be at risk to reduced agricultural output from New Zealand being replaced by another country at no guaranteed climate change gain.

It also urged political parties to articulate areas of common agreement on climate policy and the creation of an independent climate change institution to lead policy- making.

Green MP and former diplomat Kennedy Graham has been a prime mover in establishing GLOBE in New Zealand, with members from across the Parliament, including the National, NZ First, Act, United Future, Maori and Labour parties.

To download the Vivid report click here

Source: BusinessDesk via Scoop

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Douglas-fir essential oil judged a winner

Douglas-fir essential oil a winner in timber design awards - Congratulations to ForestPlus Oils, winner of the Scion-sponsored Novel Application of (wood) Fibre category in the NZ Wood Resene Timber Design Awards held in Auckland last week.

ForestPlus Oils won the prize for their ‘essential oils from pines’ product, an essential oil distilled from New Zealand Douglas-fir. The ForestPlus team use the roadside trimmings and wilding trees from Douglas-fir forests to distill oil using their own uniquely designed distilling equipment. The tree material they use would otherwise be considered a waste product, adding a potential new profit stream for some forest owners.

Scion’s Doug Gaunt, who sat on the judging panel, said the oil project had a close alignment with Scion’s strategy to use as much of each tree as possible, not just the wood.

“This product takes a small amount of side stream material from a tree and turns it into a very valuable item. Novel uses like this can change the profitability of some forestry crops and have the potential to create a whole new type of short rotation oil/chemical producing crop. It’s exactly the kind of thinking we prize at Scion.” Paul Greaves from ForestPlus Oil says.

“We’re really excited about our essential oil from pines product. The vacuum distillation technology we’ve developed, has never been used before, and it has some definite advantages compared to other techniques. The award is recognition of this.”

ForestPlus report that they’ve sent over 3300kg of oil to the US, where it’s used for aromatherapy, skincare and massage. And in that process they have removed and processed over 1.3 million kg of biomass from road edges and wildings since 1 July 2015. Doug says, “In many ways this is another Kiwi can-do story, solving a waste problem, designing and building a plant, securing a market and making it all work”.

The NZ Wood Resene Timber Design awards are the only timber design award in New Zealand. Run by the promotional arm of the forestry industry, NZ Wood, the awards have been going since 1975 and remain a great opportunity to recognise excellence in timber engineering, innovation and high-quality building design using timber.

The Novel Application of Fibre award was judged for use of a new wood product or system which contributes to the use of wood fibre derived products in a manner that characterises its unique features via an innovative application of design, science or technology.

The category was open to entries from any sector.

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Pine Harvest Plans for Tutira Regional Park

Hawkes Bay: Pine Harvest Plans for Tutira Regional Park- Plans for the upcoming pine forest harvest at the back of Tutira Regional Park were approved at this week’s Environment and Services Committee meeting.

Approximately 114 hectares of pine forest in T?tira Regional Park, owned by HBRC, is due for a staged harvest between 2018 and 2025.

The Council has been working on arrangements to secure access, minimise soil loss to Lakes Tutira and Waikopiro, and other preparatory works for the harvest to occur. Contractors awarded the job of harvesting the site will need to demonstrate to the Council innovative approaches to minimise soil and sediment from entering nearby lakes and waterways.

Asset Management Group Manager Mike Adye talked about protecting Tutira’s lakes from harvest effects.

“Contractors will have to show how their harvest processes minimise soil disturbance and disperse stormwater. We will pursue options like silt fences, drainage control, sediment traps or ponds, oversowing and replanting, and consideration for harvest timing to minimise any impacts,” says Mr Adye.

Harvest access is currently being finalised. Options considered have included using the present public access road for Tutira Regional Park. This was not supported by hapu represented by Maungaharuru Tangitu Trust. The current park road is unsuitable for harvest. It also includes DOC-owned land and passes close to a number of sensitive sites of cultural significance.

The harvest itself will be timed to achieve the best return from timber prices. Construction and infrastructure costs will be met by revenues from timber harvest, estimated to be a net return of $2 million.

Regional Councillor Paul Bailey was satisfied with the plan presented to the Council.

“The health of Lake Tutira is in our sights. This future work also needs limit any possible erosion and protect the sensitive Tutira catchment. I am happy we’re on the right track,” says Cr Bailey.

Source: Scoop News

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RED ALERT: Particulate Filter Burn Cycle

A recent incident has alerted us to a hazard associated with a new feature on 2016 model Toyota Hi-lux vehicles (and applicable to other vehicle makes as well). The vehicle is fitted with a Diesel Particulate Filter (DPF) that automatically runs a ‘Burn’ or ‘Regeneration’ cycle to empty the filter and remove carbon from the engine. As the vehicle does this automatically, drivers will probably be unaware that a regeneration cycle is underway until stopping at which point the vehicle will run at a high idle (~1,200RPM) with the cooling fan on. The heat generated from the exhaust during these regeneration cycles is extreme.

Hot enough that long grass near the muffler/exhaust tip was burnt in the recent near hit. The driver had stopped and got out of the vehicle and heard the grass burning. They immediately moved the vehicle and fortunately the grass was still green enough that it hadn’t caught alight and had only burnt the area around the muffler.

Please be very vigilant of this hazard at all times. The potential risk of fire is high, especially with the current dry, hot, conditions and if driving through or parking in areas with heavy undergrowth or dry matter!

Source: Rayonier Matariki

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Whanganui roads under pressure now

Forestry trucks are ripping up Whanganui's rural and suburban roads - and ratepayers may have to foot the bill.

The district council faces a $20 million shortfall over the next 10 years and has effectively run out of money to complete its roading programme. The situation is being blamed on damage caused by logging trucks.

The roading budget may need to be topped up from general rates "sooner rather than later", manager Mark Hughes told Tuesday's infrastructure and special projects committee.

Council has "robbed Peter to pay Paul" by putting less urgent projects on hold, he said.

"We basically don't have the money to carry out the body of works we should be doing. The pressure is coming from the increase in heavy forestry-related commercial vehicles."

About $200,000 needs to be spent on Eastown Road which will not survive the winter without urgent repairs, he said.

More >>

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Tenon shareholders support Clearwood mill sale

UPDATE: Tenon shareholders back sale of Taupo mill, winding up - Tenon shareholders have overwhelmingly backed plans to sell the firm's Taupo wood processing mill to a consortium of US and New Zealand investors and wind up the business.

At a special meeting in Auckland, investors were almost unanimous in their support of measures to sell the Clearwood mill in Taupo to interests led by Tenon's controlling shareholder Rubicon for US$55 million, which would then see two capital returns expected to generate $2.12 per share for investors, followed by a de-listing from the NZX and ultimate liquidation of the business.

"If shareholders approve the resolutions put to the meeting today, there can be no doubt that the strategic review will have delivered considerable value to our shareholders," director Mark Eglinton said in speech notes published to the stock exchange. "More than US$125 million (including dividends) will have been returned to shareholders, which will equate to a total shareholder return in US dollars of approximately 50 percent since we started the strategic review process in 2015."

Last November, shareholders approved the US$100 million sale of the US operations to New York-based buyout firm Blue Wolf Capital, allowing the company to make a US$71 million capital return via a share cancellation. The Rubicon-led purchase of the Clearwood mill in Taupo trumped seven other competing offers.

Rubicon owns about 60 percent of Tenon and wasn't allowed to vote on a component of the transaction to approve the related party transaction, nor the de-listing resolution.

Tenon started turning a profit in 2014 after more than a decade of losses as the US home- building sector began to recover, supporting demand for its wood mouldings which it largely sold into the world's biggest economy via Home Depot outlets. The company looked at other ways to cash in on the US housing market, before attracting bidders when it ran the ruler over its businesses.

The shares last traded at $2.05 and have gained 7.5 percent over the past 12 months.

Source: BusinessDesk via Scoop News

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Wallenburg prize for tree breeder

Ronald Sederoff was awarded the 2017 Marcus Wallenberg Prize for his breakthroughs in developing methods for gene discovery in conifer species and exploiting new breeding technologies for improved properties. Better quality and higher productivity are the incentives for molecular genetics of forest trees.

Professor Sederoff, North Carolina State University, USA, was one of the first scientists in the field of molecular genetics of forest trees. From the early 1990s he was involved in almost all the early studies on genetic modification of conifer trees, quantitative genetic studies and later also tree genomics.

For his discoveries Ronald R. Sederoff is awarded the 2017 Marcus Wallenberg Prize of SEK 2 million.

Innovations for the forest industry
Ronald R. Sederoff has explained that the purpose of his work is to better understand the biology of forest trees and to use this information to accelerate breeding.

He established in 1988 the Forest Biotechnology Group at North Carolina State University to concentrate on the genetic basis of quantitative traits in trees.

Until then tree breeding had focused on understanding the inheritance of different traits, without directly caring about the actual genes that determined these traits. Ronald R. Sederoff was one of the first tree geneticists trying to link biological properties with genetic information in trees, so called genetic mapping, using the newest markers available to identify important properties like rust resistance, tree growth and wood quality. His group has been actively working on sequencing pine and American chestnut genomes.

His group has also specialized on the molecular basis of the structure of wood to investigate the biochemical and genetic basis of cell wall formation. Their focus is on the pathway for lignin biosynthesis and cell wall structural proteins.

Ronald R. Sederoff has provided the forestry sector with new methods and applications for tree breeding and valuable information to be used in the restoration of for example the American chestnut, which is today on the verge of extinction due to a devastating fungal disease.

Several of the inventions in his group have been granted patents in the US.

A rapidly developing field
The Prize Selection Committee of the Marcus Wallenberg Foundation states in its motivation that Ronald R. Sederoff’s work has a major impact on the field of forest molecular genetics. Improvements in forest tree breeding for enhanced productivity resulting in a more rapid genetic gain are among the most obvious benefits of the work in his group.

“Forest biotechnology is a rapidly developing field with many bright investigators, new innovations and highly interesting publications. Recent advancements in genomics and gene editing technologies will make the field even more important in the future”, says Professor Gunilla Jönson, chairperson of the Marcus Wallenberg Prize Selection Committee.

The Marcus Wallenberg Prize 2017 will be presented by HM the King of Sweden to Ronald R. Sederoff at a ceremony in Stockholm during October.

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Buy and Sell

... and finally ... moving on from the Irish

Last week we picked on the Irish, so this week, how about some political one-liners and jokes:

"I remember when Halloween was the scariest night of the year. Now, it's Election night."

"I don't approve of political jokes...I've seen too many of them get elected."

Moving right along then ...

The Trump administration is issuing an executive order banning the sale of pre- shredded cheese. That will make America grate again.


Enough jokes for one day >> here is something you might enjoy (just for a change):

"Why the Sequoia needs fire to survive" ... It's got some stunning imagery!

Click here to view

Have a safe and productive week.

John Stulen

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