WoodWeek – 12 September 2018

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Greetings from your WoodWeek news team. The new owner of Nelson Forests, OneFortyOne (OFO), has marked the settlement of its purchase with the announcement of two significant new initiatives: the establishment of a substantial fund for sedimentation research, and a school leaver programme that will provide trade apprenticeships at Nelson Forests’ Kaituna Sawmill near Blenheim.

The Ministry for Primary Industries and the New Zealand Forest Owners Association (FOA) are joining forces under the GIA (Government Industry Agreement) to improve forest biosecurity preparedness.

The first jointly-funded initiative under this partnership will be a forest biosecurity surveillance programme designed to detect unwanted forest pests and pathogens in high-risk places.

A Japanese-owned forestry company has promised to give 148 hectares of land to a local iwi for free as part of its consent from the Overseas Investment Office permission to buy 1241ha near Whanganui.

Summit Forests, owned by Japanese company Sumitomo Corporation, will hand over the 148ha "for nil consideration once Summit has identified the appropriate iwi to receive the offer," the company said.

Finally, traders in China are complaining that the landed cost of imported North American logs has jumped by around 30% as a result of the depreciation of RMB and the trade friction between China and the United States.

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OFO marks NZ purchase with new initiatives

OneFortyOne marks purchase settlement with the announcement of two significant new initiatives – The new owner of Nelson Forests OneFortyOne (OFO) has marked the settlement of its purchase with the announcement of two significant new initiatives – the establishment of a substantial fund for sedimentation research and a school leaver programme that will provide trade apprenticeships at Nelson Forests’ Kaituna Sawmill near Blenheim.

Nelson Forests has committed $500,000 to its new sedimentation research fund and has already engaged with researchers at Cawthron Institute and Landcare Research, although it expects to develop collaborations with researchers at other organisations over time.

Lees Seymour, Managing Director of Nelson Management Ltd (pictured), the management company for Nelson Forests, says that sedimentation research will take place in Marlborough and Nelson Tasman and will build on work that the company has already done on the issue of sedimentation.

“We realise that there is a high level of interest in forestry’s role in sedimentation and that our community is looking to us to proactively address this issue. Research is crucial and will help us prevent, manage, and mitigate sedimentation.”

Tim King, Chair of the Tasman District Council Environment and Planning Committee, strongly supported the company for establishing the new fund. “It is excellent to see Nelson Forests engaging with researchers and the community on the issue of sedimentation. This is exactly the kind of thing we want to see from forestry companies.”

Nelson Forests’ new school leaver apprenticeship programme for students from Marlborough Girls College and Marlborough Boys College was also warmly welcomed. The programme is being set up to assist school leavers to make the transition to an apprenticeship programme.

The Principal of Marlborough Girls College, Mary-Jeanne Lynch, says that there would be strong interest in trade apprenticeships at Kaituna Sawmill amongst her students. “There are great careers available for women in forestry, and it’s really heartening to see that Nelson Forests has 33% of all managerial roles being filled by women. We are excited to see our students being considered for these apprenticeship opportunities.”

The Assistant Principal of Marlborough Boys College, James Ryan, was similarly enthusiastic. “Not all students want to go into tertiary study and it is so important that all our students have meaningful pathways ahead of them.”

Starting from next year, Nelson Forests expects to offer up to four trade apprenticeships at one time at its Kaituna Sawmill in a diverse range of vocations including fitter turner, electrician, saw doctor, timber processor, boiler operator, and timber machinist.

The new Nelson Forests initiatives were announced at two special functions in Nelson and Blenheim held to celebrate the settlement of OFO’s purchase. OFO’s Chair, John Gilleland and CEO Linda Sewell were among those present.

“We are delighted to mark the settlement day in this way,” said OFO Chief Executive Linda Sewell. “Nelson Forests has a strong reputation for environmental stewardship and encouraging young people into forestry and these new initiatives support the company’s existing values. Those values are also very important to OFO and we look forward to continuing to contribute to the Marlborough and Nelson Tasman communities.”

About OneFortyOne – OFO was formed in 2012 following the acquisition of a 105-year lease of 93,000 hectares of plantation assets from the South Australian Government. OFO’s name comes from the 141st meridian line at the border of South Australia and Victoria and passing through OFO’s plantation estate. Since commencing its operations OFO has expanded its estate, increased the number of trees planted and grown its domestic processing and sales market by more than 45 percent. In January 2018, OFO purchased Carter Holt Harvey’s Jubilee Highway sawmill in Mt Gambier, South Australia and Woodchip operations at Portland, Victoria. In just five years, OFO has become an established industry player within Australia with a strong track record of industry and community partnerships.

OFO directly employs more than 360 people in addition to approximately 1450 contractors who provide road haulage, silvicultural and harvesting support, with the majority of employees living and working in close proximity to the plantation. OneFortyOne CEO, Linda Sewell, has extensive experience in forestry and wood processing in both New Zealand and Australia.

About Nelson Forests – Nelson Forests is a vertically-integrated plantation and sawmill business that operates in the Nelson Tasman and Marlborough regions of New Zealand. Nelson Forests owns more than 60,000 productive hectares of plantations and it produces 1.2 million cubic metres of logs and 55,000 m3 of timber annually.

Nelson Forests, located within New Zealand’s second-largest domestic processing region, employs 101 people fulltime. It’s business activity is further supported by approximately 350 contractors.

The Nelson Forests management team has more than 150 years of collective industry experience. Nelson Forests has a strong culture of safety and a track record of environmental management which has been broadly used as the benchmark for performance in the New Zealand industry.





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China: Surge in North America log cost

Traders in China are complaining that the landed cost of imported North American logs has jumped by around 30% as a result of the depreciation of RMB and the trade frition between China and the United States.

Although shippers in the US have been lowering log prices to maintain market share in China the higher costs continue to be a major challenge to Chinese importers. The reason behind this is that, even with price reductions, landed costs are still higher than previously which means competitiveness in the domestic market is weakened and traders are losing out to alternative timbers.

At present, the price for grade A processing general materials (2-4m) North America hemlock and fir in the Guangdong market is between RMB1680-1760 per cubic metre. The price for grade A processing general material (2-4m) southern pine is between RMB1580-1660 yuan per cubic metre.

Source: ITTO TTM Report

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MPI joins forces with FOA for biosecurity

The Ministry for Primary Industries and the New Zealand Forest Owners Association (FOA) are joining forces under the GIA (Government Industry Agreement) to improve forest biosecurity preparedness.

The first jointly-funded initiative under this partnership will be a forest biosecurity surveillance programme designed to detect unwanted forest pests and pathogens in high-risk places.

FOA and MPI recently signed the Commercial Plantation Forestry Sector Operational Agreement for Readiness under the GIA. This agreement establishes a new way of working in partnership between the two organisations and will see a doubling of efforts to improve forest biosecurity readiness, says Andrew Spelman, MPI’s Acting Director, Biosecurity Readiness.

“This continuing partnership will build on the considerable contribution the forest industry has made to biosecurity to date, and we look forward to collaborating to improve biosecurity processes and outcomes for New Zealand.”

Chair of the FOA and Farm Forestry Association Biosecurity Committee, David Cormack says: “The forest industry is delighted to be working with MPI on the new Forest Biosecurity Surveillance Programme. We’ve worked closely together for a long time but joint-funding is another level and demonstrates the commitment MPI has made to the forest industry.”

The FOA have been a GIA signatory since November 2015. Operational Agreement negotiations began in 2016, with a particular emphasis on cost-sharing forestry surveillance as a readiness activity.

Existing biosecurity readiness work in the sector includes an annual forest health survey, which the Government started in the 1950's, but has been fully funded by industry since the 1990's. It also includes MPI’s High Risk Site Surveillance Programme, which looks for pests and diseases that could affect a range of native and exotic trees, including production species.

Source: NZFOA & MPI

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Can virtual reality replace forestry field work

The forestry industry has been experimenting with virtual reality in Rotorua this week to develop new ways of measuring tree growth.

The University of Tasmania and Interpine are carrying out the research, which is partially funded by Forest and Wood Products Australia.

The university's Human Interface Technology Lab leader, Dr Winyu Chinthammit, said the experiments aimed to give skilled workers a safer and more efficient way to measure forests, using data from aerial LiDar scanners, rather than field work.

"The original project started last year ... To see whether humans can actually visualise and perceive that as a real forest and perform tasks they would normally do."

Interpine LiDar specialist Susana Gonzalez said feedback from experiments this week would help improve the software before the next experiments in February.

"The target is to be able to assess plots in the office in one year's time."

Interpine operations manager Bruce Hill said the technology would help avoid health and safety risks.

"People driving out there, possibly tripping and falling in the bush, or we even had one guy who had a finger infected with blackberry and he nearly lost his finger. When you think about moving to virtual reality plots you take away all those hazards."

Thirty-four participants are testing out the virtual reality method this week, including representatives from NZ Forest Managers and Timberlands.

The annual Rotorua GDP for forestry and logging for the year ended March 2016 was $199.5 million, up from $166.7m the year before, according to the Ministry of Business, Innovation and Employment's latest figures.

Source: Stuff News

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Sumitomo to donate land to locals

Forestry company will donate land after it works out which iwi should get it - A Japanese-owned forestry company has promised to give 148 hectares of land to a local iwi for free as part of its consent from the Overseas Investment Office permission to buy 1241ha near Whanganui.

Summit Forests, owned by Japanese-owned Sumitomo Corporation, will hand over the 148ha "for nil consideration once Summit has identified the appropriate iwi to receive the offer," the company said.

Summit is paying $13 million to the Whanganui District Council which owns the land.

The company has also promised public access for hunters, walkers and mountain- bikers who obtain a permit, and permit-free access "will generally be provided on Sundays and public holidays".

"The Investment is expected to result in a substantial and identifiable benefit to New Zealand.

"The Investment is likely to advance the Government's strategy to plant one billion trees between 2018 and 2027," the OIO said.

The forests are known as Siceleys, Tauwhare, Te Ara To Waka, and McNabs, and the council is expected to use the $13m to pay for a new wastewater treatment station.

Summit Forests New Zealand Limited (Summit) operates an extensive forestry estate in New Zealand, mostly in Northland.

"Having built up a forestry portfolio in Northland, Summit now wishes to establish a forestry portfolio in the Whanganui region.

More >>

Source: Stuff news

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ANZ Commodity Price Index

The ANZ World Commodity Price Index fell 1.1% m/m in August – its third consecutive monthly decline, leaving the index down 0.5% y/y. Of the 17 commodities in the index, seven fell, four were unchanged and six lifted. Of the six broad categories, only forestry prices managed to squeeze out a small gain.



Source: ANZ

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Job cuts as Juken upgrades Kaitaia mill

Japanese-owned wood products company Juken is to upgrade its board mill in Kaitaia but also cut the workforce - The company says it will invest millions in new technology to modernise and streamline production at the 30-year-old mill over the next few years.

Juken's New Zealand manager Dave Hilliard said it would mean job losses among the 250 employed in the region, although it's not known how many.

Juken cut about 100 jobs at its Gisborne plant at the start of the year as it cut production because of slowdown in the Japanese housing market.

He said the mill was a money loser, with outdated machinery, and production is limited by uncertain supply.

"The mill's machinery and technology is old, despite investment in recent years the site presents health and safety challenges that need to be urgently addressed, and the mill's production is severely constrained by inadequate and uncertain log supply in Northland.

"Because of these issues, the mill is making a substantial loss."

Security of log supply in Northland was having an impact on all mills in the region and was not an issue JNL could fix on its own, Mr Hilliard said.

"We are in early but constructive discussions with the government about the shortage and how it can be solved."

Juken will carry out a two-week consultation period with staff in Kaitaia.

The company has four wood processing mills and employs about 1000 people across its forestry and processing businesses in New Zealand.

More >>

Source: RadioNZ

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Funding boost for Tairawhiti sawmill

The Provincial Growth Fund (PGF) will invest $500,000 in the Far East Saw Mill in Tairawhiti to increase wood processing capacity and get local people into jobs, Regional Economic Development Minister Shane Jones announced last Friday.

The total cost to recommission the Mill is just over $3.6 million, with the rest of the funding coming from the Eastland Community Trust and the Far East Saw Mill Limited.

“Currently only four per cent of raw logs are milled in Tairawhiti, but there’s potential for that to increase by up to 25 per cent, which will add an estimated $120 million annually to the region,” Shane Jones said.

“Forestry is a significant economic driver in Tairawhiti and we want to make sure the region is able to take full advantage of the opportunities the sector provides. Today’s announcement will help ensure that any future increases can be managed locally.

“Funding from the PGF will also help speed up the Mill’s production capacity, which is currently only operating at 10 per cent, while also returning 50 jobs to the local economy.

“This will lead to higher value forestry products being produced and more money going back into the community via pay packets for local workers,” Shane Jones said.

The Far East Saw Mill is a key component of the Wood Processing Centre of Excellence which aims to be a hub for wood processing, wood products, marketing and distribution, and training and research. The Centre received PGF funding earlier this year for the development of a business case.

Source: Scoop News

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Kaitaia workers being assisted by unions

Kaitaia workers left with more questions than answers - Unions request assistance from ministers - Workers at the JNL/ Juken Triboard Wood Products Mill in Kaitaia remain concerned after today’s company announcement that the mill would be undergoing a major upgrade, and around 40 jobs may be on the chopping block.

Workers and their respective unions (FIRST Union and E tu) feel they have been telling the company repeatedly that the mill needs upgrades but now feel concerned that the upgrades will take place at the workers expense.

FIRST Union President Robert Reid who attended a staff meeting this morning where the company outlined its restructuring and upgrade plans says he has numerous concerns regarding the proposal and workers have many questions.

“The news of the upgrade was overshadowed by news that the restructuring would cause around 40 redundancies and a change to shift patterns that would see most JNL workers take home reduced pay and travel costs would increase.”

He says the announcement is a major regional development and employment issue for Northland.

“The unions call on Regional Economic Development Minister Shane Jones and Minister of Employment Willie Jackson to liaise with the parties involved to ensure that there are ongoing sustainable wood processing jobs in Northland.”

Mr Reid says workers are also concerned the company noted the soft market for its products in Japan and the problems of accessing logs Northland.

“If these issues cannot be resolved then the upgrade and job losses would be for nothing.”

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China timber port investment

Southwest China to see investment in timber ports and processing zone – A cooperation and investment agreement was recently signed between China Forestry Group Corporation and the administration in Ba’nan district of Chongqing municipality. An investment of RMB23 billion will be used to build timber trade ports, a timber processing zone and a wood products demonstration and trading centre in Western China.

Currently in China the timber ports and industrial zones are mainly distributed in coastal areas and along the border areas and there is a gap in the southwestern regions of China.

The new infrastructure will result in large volumes of imported timber entering the southwestern regions and this will cut transportation costs for enterprises in the region and will also expand employment opportunities. It is forecast that demand for timber would expand to 100 million cubic metres in the southwestern region including Yunnan, Sichuan, Guizhou, Guangxi provinces, Xizang Autonomous Region and Chongqing municipality.

Chongqing municipality is the distribution centre in southwestern China and the technology for timber processing mills is well established and production costs are very competitive, say analysts.

More >>

Source: ITTO TTM Report

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... and finally ... animal jokes

In the jungle one day, a team of little animals and a team of big animals decided to play football. During the first half of the game, the big animals were winning. But during the second half, a centipede scored so many touchdowns that the little animals won the game.

When the game was over, the chipmunk said to the centipede, "You were great out there … but where were you during the first half?"

He replied, "Putting on my shoes!"

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A champion jockey is about to enter an important race on a new horse. The horse's trainer meets him before the race and says, "All you have to remember with this horse is that every time you approach a jump, you have to shout, "ALLLLEEE OOOP!" really loudly in the horse's ear. Providing you do that, you'll be fine."

The jockey thinks the trainer is mad but promises to shout the command. The race begins and they approach the first hurdle. The jockey ignores the trainer's ridiculous advice and the horse crashes straight through the centre of the jump.

They carry on and approach the second hurdle. The jockey, somewhat embarrassed, whispers "Aleeee ooop" in the horse's ear. The same thing happens - the horse crashes straight through the centre of the jump.

At the third hurdle, the jockey thinks, "It's no good, I'll have to do it," and yells, "ALLLEEE OOOP!" really loudly. Sure enough, the horse sails over the jump with no problems. This continues for the rest of the race, but due to the earlier problems, the horse only finishes third.

The trainer is fuming and asks the jockey what went wrong. The jockey replies, "Nothing is wrong with me - it's this bloody horse. What is he - deaf or something?"

The trainer replies, "Deaf?? DEAF?? You idiot, he's not deaf - he's BLIND!"

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A man takes his Rottweiler to the vet and says, "My dog's cross-eyed, is there anything you can do for him?"

"Well," says the vet, "let's have a look at him."

So he picks the dog up and examines his eyes. Finally, he says, "I'm going to have to put him down."

"Why?? Because he's cross-eyed?"

"No, because he's really heavy."

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I need to re-home a dog. It's a small terrier, and tends to bark a lot.
If you're interested, let me know and I'll jump over next door's fence and get it for you.



Thanks for keeping up with the latest wood news with us!
Have a safe and productive week.

John Stulen
Editor

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