WoodWeek – 31 May 2017

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Greetings from your WoodWeek news team. This week we have reactions from the key association leaders in our industry to the recently announced Budget in New Zealand. For the most part there was nothing for the forest and wood products industry. Mostly, it was a missed opportunity to put incentives in place encouraging forest planting to offset our international climate change liabilities for the Paris Agreement.

Looking to current trade results, more dairy, wood, and wine exports in April 2017 led to a goods trade surplus of $578 million, according to a report from Statistics NZ.

Looking further ahead economically, we have some words of warning from Australian Steve Keen. Who’s he you might ask? He was one of only a handful of economists to predict the Global Financial Crisis. His most recent book, Can We Avoid Another Financial Crisis? leaves readers in little doubt he believes we're heading that way unless we adopt a fundamentally different approach to private debt. He says it’s all about debt – specifically private debt.

“We’re focussing on the wrong topic. We’re so focussed on government debt, what actually caused the crisis was run away private debt.” And he says there are a number of ‘debt zombies’ in the world economy - New Zealand among them.

This week we end on a more positive note with Pan Pac celebrating a milestone for their Super-B truck and trailer combinations that have saved over one-million litres of diesel for every year in operation. They estimate the HPMV concept has halved product cartage cost over the next equivalent option.

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Budget ‘fail’ on local climate change solutions

Investment opportunity missed by factor of 10 - The Forest Industry Contractors Association (FICA) is concerned at what wasn't in yesterday’s Budget. The stagnant level of funding for growing local forests is not good enough for dealing with climate change challenges. We have a land base and local tax-paying businesses are sitting in a prime position to ‘think global and act local’.

“What was not in the Budget is just as important as what is. From our perspective we need more like $200 million for planting trees locally”, says FICA president Ross Davis.

“On any analysis, the Budget sum of less than $20 million for planting is just business as usual. A much greater effort is needed and Government leadership here would be a double-win, had they been brave enough to invest in forests for New Zealanders on our own land,” added Davis.

“Planting trees is the most effective way of spending money to ensure New Zealand meets its commitments to the Paris Agreement on climate change.”

“The double win is that big forest plantings would sequester far more carbon and rural community employment could be boosted. Moving New Zealand much further to meet our international commitments on climate change and boosting local economies is better than paying cash to overseas groups where past experiences have been riddled with fraud.”

Davis says FICA’s view is that a greater financial signal could have been made in the Budget announcement so tree nurseries and forestry employers could begin planning for a growth boost. We need time to plant seeds and grow seedlings. How can politicians not get that solving our climate change and boosting local businesses is a good thing?

“We’re not even concerned about the mix of indigenous forests and production species, like douglas fir and radiata pine. We just need to get on with the job of building a bigger New Zealand carbon sink base,” added Davis.

“Let’s see hard-earned taxpayers’ money invested in projects with multiplied economic benefits. Our mission is all about sustainability. Boosting local forests has to be good for the environment and our local economies,” says Davis.

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Wood exports aid record trade surplus

Higher dairy, wood, and wine exports lift trade surplus – More dairy, wood, and wine exports in April 2017 led to a goods trade surplus of $578 million, according to a report from Statistics NZ.

"In April we had the largest monthly trade surplus since 2015," international trade statistics senior manager Daria Kwon said. "This trimmed back the annual deficit, which reached an eight-year high in February."

The annual trade deficit reduced to $3.5 billion in April from $3.7 billion in March. In February 2017 it peaked at $3.8 billion, the highest trade deficit in almost eight years.

April's goods trade surplus was the largest monthly surplus since March 2015 and the largest April surplus since April 2011. Easter fell in April this year, but the holiday appeared to have little impact on exports. Both exports and imports reached new highs for an April month.

Goods exports in April 2017 were worth $4.8 billion, up $423 million (9.8 percent) from April 2016. The only two months with higher values were March 2014 ($5.0 billion) and March 2015 ($4.9 billion).

The top-five export commodities all rose compared with April 2016. Milk powder, butter, and cheese continued the increases seen in recent months, up 35 percent on the back of higher prices. Logs, wood, and wood articles rose 18 percent, with quantities up at a similar rate. Wine values rose 20 percent with quantities up 40 percent.

Goods imports were worth $4.2 billion, up $195 million (4.9 percent) from April last year. The main movements were intermediate goods (led by petroleum) and capital goods (led by mobile phones, portable computers, and tractors).

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Wood industry leaders comment on Budget

Budget fails to plan for forest future - Forest Owners Association President Peter Clark (pictured) says the Budget is money for urban New Zealanders’ immediate concerns, and he says it fails to provide and prepare for the scale of afforestation necessary for New Zealand to meet its Paris Agreement commitments on climate change.

“There is the status quo allocation of $19.5 million in the Budget for the Afforestation Grants Scheme, which was set up some time ago to encourage more tree planting to lock up atmospheric carbon. But the AGS just scratches the surface of what is needed, and being tax-payer funded is not the answer to the problem.”

“There is plenty of private money, both within New Zealand and offshore that would invest in tree planting if the policies impacting on land use and land values were to put forestry on a level playing field with pastoral agriculture.”

Peter Clark says forestry and timber processing may benefit from a further cash injection for the railway network, funds for primary industry research and a boost in our trade access resources. But he says he can’t see any priority for what the government has already acknowledged as another serious problem, of recruitment and training of workers in the primary industries, including forestry.

“Just a year ago the government launched its Primary Industry Champions scheme as a major project. Now, it seems to have lost momentum. In forestry, we have an acute labour shortage that is only going to get worse unless something major is done, and that applies right through most of the primary sector,” Peter Clark says.

He says another serious gap in the Budget is the lack of funding for the regional road network.

“Unbelievable amounts in this Budget are going into sorting the traffic woes of New Zealand’s big cities, but there is an equally great need for funding to back up the cash strapped local authorities who are trying to keep local roads going and servicing the industries which generate the taxes to fund the Budget in the first place.”

Reaction from Wood processors

New Zealand is facing bigger trade barriers than ever before, particularly by manufacturers trying to add value to exports. The Government should “pull out all the stops” to grow the New Zealand manufacturing sector in a world where protectionism is increasing sharply.

So said Brian Stanley, Chair of the Wood Processors and Manufacturers’ Association (WPMA) when he returned from accompanying the Prime Minister on his recent trade mission to Japan.

The Government’s latest budget acknowledges this discrepancy, and the WPMA welcomes the trade boost of $91.3 million over four years announced today, as they welcome the additional $74.6 million funding for Callaghan Innovation to grow business research and development.

Both measures have the potential to help lift the country’s export manufacturing competitiveness.

The WPMA firmly believes the New Zealand Government must focus its international trade efforts on scrapping or seriously limiting other countries’ massive subsidy systems if we are to compete successfully. The recent increase in the VAT differential between logs and value-add wood imports into China is an excellent example. "This will likely lead to yet higher log prices in New Zealand," says Mr Stanley.

“New Zealand has long been an advocate for free and fair international trading, and the need for us to boost our global leadership on this has never been greater,” comments Dr Jon Tanner, WPMA Chief Executive.

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WorkSafe Safety Alert: Felling Near Hit

Winter is here, so make sure you're crews are safe out in the forest in the conditions. Check out this alert from Summit Forests, via WorkSafe:

A faller came across a partially uprooted tree leaning on a standing tree. After an initial assessment the faller requested an observer to assist him. The two men assessed the situation and developed a plan. An escape route was cut, and the standing tree was felled under the watch of the observer. The partially uprooted tree held firm.

The two men reassessed the partially uprooted tree over a 10 to 15 minute time period to see if it was likely to fall under its own steam. They determined that it was not going to fall, so the faller proceeded to fell the tree under the watch of the observer. The tree was scarfed, and then a bore and release cut was started. At this point, and before the faller noticed anything, the observer yelled for him to “GET OUT”. The faller retreated along his escape route and the tree uprooted taking a 3m root bole with it.

Potential Severity:
There was plenty of potential for something to go wrong here, firstly with the tree that the partially uprooted tree was leaning against, and secondly with the partially uprooted tree itself. It is unsure exactly what would have happened had the faller not been alerted so quickly to the situation, but it would not have been the minor incident it was on this occasion.

Download the PDF Safety Alert

For more alerts, check out WorkSafe New Zealand's forestry alerts here

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Budget bit tight on ETS modelling

We're to get some better modelling folks - The impact of last week's Budget on our Emissions Trading Scheme (ETS) looks limited to the announcement of $4 million over four years, to be directed towards further costing, testing and modelling of policy options that could see us meet our Paris 2030 target.

“The Government is moving to the next stage of its work programme to meet our ambitious Paris Agreement 2030 emissions targets,” said Climate Change Issues Minister Paula Bennett.

“This funding will mandate work across government to provide costed, tested and modelled policy options to meet our international emissions reductions targets under the Paris Agreement."

“Along with the recently announced Productivity Commission investigation into climate change we will now have advice on the actual economic trade-offs that we’ll need to make to meet our 2030 target."

“It’s important we make decisions based on the best advice available. We have expert advisory groups in agriculture, forestry, and adaptation all providing the evidence base for New Zealand’s policy options,” Mrs Bennett says.

While the Minister also pointed to supporting programmes already announced by Government in programmes (such as the Low Emission Vehicles Contestable fund), the key decision has of course been made: we are committed to our 2030 Paris Agreement target of 30% below 2005 levels by 2030, whether or not we know the costs of achieving it.

The Treasury's 2016 Long Term Statement on Fiscal Position estimated the costs to New Zealanders of meeting this target to be between $14 billion and $37 billion over 2021-2030. This assumed access to international carbon markets AND carbon prices starting at $25 in 2021 and rising to $50 by 2030.

By contrast NZUs traded earlier this afternoon at $16.60 and are currently bid and offered at $16.30 and $16.80 respectively. This wide spread likely reflects the expectation of something more on the information front, but for announcements relating to the ongoing ETS review it appears we have to wait a bit longer. A market without much information? Certainly. But not a market without a mission.

Source: Carbon Match - open every weekday 1pm-5pm.

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Can we avoid another financial crisis?

Steve Keen: The coming crash (from Radio New Zealand's Sunday Morning programme - Australian Steve Keen was one of only a handful of economists to predict the Global Financial Crisis.

His most recent book, Can We Avoid Another Financial Crisis? leaves readers in little doubt he believes we're heading that way unless we adopt a fundamentally different approach to private debt.

He says it’s all about debt – specifically private debt.

“We’re focussing on the wrong topic. We’re so focussed on government debt, what actually caused the crisis was run away private debt.”

And he says there are a number of ‘debt zombies’ in the world economy - New Zealand among them.

He calls New Zealand ‘Schrodinger’s Zombie’.

The walking dead have already had a financial crisis, he says, and have been experiencing weak growth, while 'zombie-to-be' countries avoided the 2008/2009 crisis by borrowing their way through it.

Now they have a bigger debt burden to deal with when the next crisis hits, he says.

“New Zealand sits in both camps. It had 190 percent of debt to GDP back in 2009, it bottomed out at about 170 percent then went back up to 180 percent of GDP. Most of that’s in the household sector so that’s driven the housing bubble in New Zealand, which of course the authorities normally deny, but it’s clearly there although in my opinion starting to turn right now.

“So you guys have had two bites of the zombie cherry.”

He says there is no doubt the bubble will burst.

“The bubble will burst in the next one to two years - there’s been a real acceleration in house prices since 2012, they’ve increased by about 60 percent. But what I’m seeing now is the motivating force for rising house prices is rising mortgage credit. The wind in that bubble is starting to run out.”

More >>

Source: Radio New Zealand (RNZ)

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Supersize pulp trucks drive savings

Pioneering high-productivity Super-Bs cut truck journeys - Two pioneering high productivity truck and trailer units that are longer and heavier than standard vehicles are dramatically reducing the number of truck journeys on their set route in Hawke’s Bay. And the success of the pair, each comprising a standard tractor unit and two purposebuilt trailers, warrants official approval of more like them, New Zealand Truck & Driver magazine believes.

In five years of operation, the so-called Super-B units have carted one million tonnes of wood pulp between the Pan Pac Forest Products mill at Whirinaki, to the Port of Napier – cutting the number of truck journeys needed for the job by a third.

The units, designed and built by Rotorua’s Kraft Engineering for Emmerson Transport (ETL), operate on High Productivity Motor Vehicle (HPMV) permits, which allow their 23.8 metre length and an additional 18-tonnes of weight above the 44-tonne standard weight limit.

They are strictly limited to the 18-kilometre route between the mill at the port, as approved by their NZ Transport Agency permits.

ETL managing director Ian Emmerson told NZ Truck & Driver that with the Super-Bs “we’ve taken 3500 movements off the road per 12-month period. They’re doing 28-30 total round trips a day, from 6am to 10pm, over two shifts.”

As well as cutting the daily trips and total kilometres travelled by 33% (compared to the six standard truck and trailer units they replaced), the Super-Bs have also cut labour input by 27%, capital input by 12% and fuel use (and thus harmful exhaust emissions) by 9%, according to the magazine.

Pan Pac’s pulp division general manager Tony Clifford said that the Super-Bs have saved “over one-million litres of diesel for every year in operation. The HPMV concept has halved our product cartage cost over the next equivalent option.”

The two units were put to work by ETL in 2012. Another Kraft-built Super-B, a logging unit, was also approved around the same time, to work in the central North Island. They were sanctioned by the NZTA as part of its highly-successful HPMV programme – aimed at improving the efficiency and productivity of NZ’s national truck fleet.

Thousands of trucks have now been approved to operate at higher weights, subject to strict conditions, under the programme.

The vast majority of them though are shorter and lighter than the Super-Bs and NZ Truck & Driver publisher Trevor Woolston is concerned that the opportunity for even more productivity gains is being lost, with the NZTA appearing to “stall” the project…despite their proven success and an industry keen to adopt the concept in other regions.

The magazine says that Kraft Engineering spent four years developing and gaining approval for the Super-B concept…which has now proven successful in five years of operation. But Kraft told NZ Truck & Driver that its applications for further Super-Bs have so far been rejected by the NZTA.

Woolston says that while the Super-Bs are not suited to general use across the country, “they could, if permitted, bring the same benefits to all road-users (and the NZ economy) in many other areas.

“Provided the roads are suitable for these units, the Super-Bs are perfect for freight tasks where trucks run back and forth on the same route, all day, every day.

“The public and the industry alike both want to see fewer trucks on the road – and allowing them to carry more freight is the best way of achieving that.”

Ian Emmerson also believes that the Super-Bs have potential elsewhere, telling NZ Truck & Driver: “There are a lot of areas where this concept would work, and reduce costs, and benefit all operators and the economy. The NZTA is curious, but we’d like them to be a bit more open-minded about it happening, because you need to protect exporters.”

And it’s not just economically positive, he told NZ Truck & Driver: “Socially, that’s an achievement we’re proud of, and which the NZTA and local authorities would be supportive of.”

Pan Pac’s Tony Clifford told NZ Truck & Driver: “We’ve saved over 400,000-litres of diesel since these units were introduced. In regional terms, Pan Pac contributes just over $400million of the Hawke’s Bay GDP, around 5.5%; is responsible for providing 1900 fulltime jobs, and we account for one-third of all the products through the Napier Port.

“The HPMV concept has been a critical part of delivering our product reliably and at the lowest costs, given the existing technology and the compliance regulations at the time.” Road Transport Forum chief executive Ken Shirley says that the HPMV programme has led to “huge” gains and is “a magical story of success.

“The beauty and the promise of HPMV was to recognise that all of the state highways and arterial routes can comfortably take up to 60-tonnes….. Yes, the HPMVs are bigger, but they’re better, safer, newer, fewer, with improved technology – so you’re actually moving more goods with fewer, modern trucks.”

NZTA’s freight strategy manager Marinus La Rooij, told the magazine that he does believe that “in the future there will be more units like this on the road” – tailored for very specific freight tasks, where the roads and the environment can safely accommodate them.

A review of trucks and trailers over 23-metres long is currently under way and should be finalised by the end of the year, he said.

Future Super-Bs, he added, would also likely be limited to precise routes: “There’s not a lot of possibility for widespread general access because the road network is too tight, and we’re not prepared to compromise safety…but what’s happened here has been fantastic.”

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Group seeks to set Arbour Day record

Trees That Count pushes for Arbor Day planting record - Kiwis are being challenged to get behind Arbor Day on Monday 5 June, 2017 and be part of a record-setting attempt: to plant the largest number of native trees in New Zealand in one day.

The challenge comes from Trees That Count, an ambitious, recently launched conservation movement that aims to inspire New Zealanders to plant 4.7 million native trees in 2017 – that’s one tree planted for every person. The Arbor Day campaign provides an opportunity for everyone to make a substantial impact, says Trees That Count’s project director Tanya Hart.

“We’re aiming to get more than 10,000 trees pledged and planted for Arbor Day, which also happens to be a public holiday,” Tanya explains. “With almost 9,000 trees pledged so far, we’re well on the way to success, but we’d love for more Kiwis to get their hands dirty. There’s never been a record set for this before, and we want to set the bar high so we can do even better next year.”

“Planting native trees helps restore and enhance New Zealand’s environment, by creating habitats for native birds and insects, and encouraging clean air and waterways. Crucially, it also makes a difference to climate health in New Zealand by reducing our greenhouse gas emissions,” adds Tanya.

“If every Kiwi plants just one native tree, whether at a community planting event or in their back garden, this small action will have a major effect against climate change.”

The Trees That Count website (www.treesthatcount.co.nz) features a live counting tally of planting activity that will enable everyone to keep up with the Arbor Day tally, and progress towards the 2017 goal of 4.7 million trees planted.

Celebrated by countries worldwide, Arbor Day is about inspiring people to plant and nurture trees. New Zealand’s first Arbor Day planting was on 3 July 1890 at Greytown, in the Wairarapa, where children from Greytown School, residents and dignitaries planted 153 trees at the southern end of the town. More than 125 years later, the day holds even greater significance as climate change becomes an ever-pressing concern.

Using Ministry for Primary Industries figures, researcher Dr David Hall has estimated that if 40 native trees were planted for every New Zealander it would be roughly enough to negate New Zealand’s average annual increase in greenhouse gas emissions since 1990. Recording the number of native trees planted each year is a vital first step.

Since 1977, New Zealand has celebrated Arbor Day on 5 June. Some environmental organisations continue to plant trees on Arbor Day, but Trees That Count wants to firmly embed the day back into the national consciousness. Many people may remember getting a day off school to plant trees as children – and also remember where that tree is now, having seen it grow, and feel a sense of pride from their planting efforts.

Celebrities and notable Kiwis such as Eliza McCartney, Ruud Kleinpaste, Grant Dalton and Josh Emett have also pledged their support to the programme.

Sir Stephen Tindall, co-founder of The Tindall Foundation (which funds Trees That Count), encourages people to get involved. “Planting native trees in your neighbourhood, on your farm, at school or outside your office is one of the best things you can do for the local environment and for the planet. It is also a great way to bring people together and connect with your local community.”

“Trees That Count is making progress, but we think we can do better and we need your help!”

Pledge to plant a tree and register it on the Arbor Day campaign page, or support the campaign by donating a tree (for $10) that will be planted on your behalf. The website also contains useful information about the types of trees to plant, and planting tips.

*A note to planting groups regarding myrtle rust.
Myrtle rust can have serious consequences for various species of plants in the myrtle family, including New Zealand native plants such as: pohutukawa, ramarama, rata, rohutu, manuka, swamp maire, kanuka. Introduced plants including, feijoa, eucalypts and bottle brushes are also susceptible to myrtle rust.

DOC is working closely with MPI trying to restrict the spread of the disease. DOC staff are actively looking out for potentially infected plants in the wild. The impact on native forests will be noticeable if myrtle rust becomes established.

For groups located in Northland, Taranaki and Waikato regions, Myrtaceous plants should not be planted at any planting days coming up, unless the disease is declared to be eradicated before the proposed planting date. For all other plant species, it is advisable to ensure the nursery of origin has been adhering to the NZPPI hygiene protocols and you keep a record of number of plants by species, their origin and planting location, as these plants can still be a vector.

For all other regions, planting of Myrtaceous species may proceed if plants are not sourced from Northland, Waikato or Taranaki. Ensure the nursery of origin has been adhering to the NZPPI hygiene protocols and keep a record of number of plants by species, their origin and planting location.

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... almost finally ... Most trusted brands revealed

2017's Most Trusted Brands for 2017 revealed - The love affair between New Zealanders and Whittaker’s is both sweet and enduring.

The results of the Reader’s Digest annual Most Trusted Brands survey are out, and for the sixth consecutive year, Whittaker’s has been voted Most Trusted Brand of all brands surveyed. The family business, which has been making high-quality chocolate for more than 120 years, was also voted Most Iconic Brand, and won the confectionery category accolade too.

As one Wellingtonian male said in his survey response, Whittaker’s is “a great product, a great family business, is honest about its ingredients, and there are no packaging tricks to fool customers”. Whittaker’s “great taste, amazing flavours, and much-loved artisan collection” were applauded by a female Auckland respondent.

Other top-listing brands for 2017 are, in order: Canon, Tip Top, Edmonds, Resene, Air NZ, Mitre 10, Toyota and Sleepyhead. (Whittaker’s features first and second in the top 10 listing due to winning both the iconic, and confectionery categories).

A representative sample of 1,400 New Zealanders were surveyed by market research company Roy Morgan Research to attain the Most Trusted Brand findings. Respondents were selected to reflect the demographics of the general population and were tasked with completing an on-line questionnaire. This year, the number of New Zealanders surveyed grew by 200 compared to last year, and the categories surveyed extended from 40 to 60. The 60 categories of products and services reflected a broad range of industries.

The category winners are as follows: aged care and retirement villages, Presbyterian Support; banks, Kiwibank; beds, Sleepyhead; bicycles, Avanti; biscuits, Griffin’s; bread, Vogel’s; breakfast food, Sanitarium; cars, Toyota; car care products, CRC; car rental companies, Hertz; carpet, Cavalier Bremworth; cat food, Whiskas; charities, St John; cleaning products, Dettol; coffee machines, Breville; confectionery, Whittaker’s; crackers, Huntley & Palmers; digital cameras, Canon; DIY power tools, Stihl; dog food, Eukanuba; electronics (TV and home entertainment), Sony; fruit and herbal tea, Dilmah; garages and sleepouts, Versatile; gardening equipment, Stihl; gardening products, Yates; general insurance (home, contents, car), AA Insurance; hair care, Schwarzkopf; health insurance, Southern Cross; heat pumps,Mitsubishi Electric; home builders, GJ Gardner; home improvement stores, Mitre 10; ice cream, Tip Top; jewellers, Walker & Hall; kitchen designer and manufacturers, Kitchen Studio; laundry detergent, Persil; life insurance AA Life; marine engines, Yamaha; meat and poultry,Hellers; motorcycles, BMW; muesli and snack bars, Sanitarium; NZ wines, Oyster Bay; pain relief, Panadol; paint, Resene; pest control, Raid; petrol companies, Z; real estate agencies,Harcourts; retailer (excluding supermarkets), Farmers; skin care (anti-ageing) Nivea; small kitchen appliances, Russell Hobbs; supermarket / home brand, Pams; supermarkets, New World; tea, Dilmah; tissues, Kleenex; toddler milk formula, Karicare; tyres, Bridgestone; vacuum cleaners, Dyson; vitamins and supplements, Healtheries; whitegoods, Fisher & Paykel; and yoghurt, Fresh ‘n Fruity.

Reader’s Digest Australasian managing editor Louise Waterson says being ranked on the Trusted Brands list is a great achievement. It means a company is genuine, authentic, reliable and consistent – and only the best brands can manage this. But, being considered so trust-worthy comes with responsibilities, she adds.

“Maintaining this ranking involves a genuine commitment to protect and fulfil the promises made to the consumer,” she says.

Many of those on the 2017 Most Trusted Brands top 10 list have proven they can do exactly that, and hence are repeat performers. Brands like Toyota, Tip Top, Resene and Sleepyhead, for example, have all been A listers before.

Highly Commended ratings were also acknowledged in the survey. These are listed in the June edition of Reader’s Digest magazine.

This year marks the 18th time Reader’s Digest has commissioned its annual Trusted Brands survey. Ranking trusted brands remains as valuable an exercise as ever, it would appear. After all, consumers of today tell us the number one quality they demand of a brand is… honesty.

Source: Scoop News

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Buy and Sell

... and finally ... time for a laugh or two

Men and their friends vs Women and their friends

Friendship among Women:
A woman didn't come home one night. The next morning she told her husband that she had slept over at a friend's house. The man called his wife's 10 best friends. None of them knew anything about it.

Friendship among Men:
A man didn't come home one night. The next morning he told his wife that he had slept over at a friend's house. The woman called her husband's 10 best friends.
Eight confirmed that he had slept over, and two said he was still there.


And take a look at these fantastic wood piles ... !

Have a safe and productive week.

John Stulen

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