WoodWeek – 4 October 2017

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Greetings from your WoodWeek team. Last week we delivered our 2-day WoodTECH conference in Rotorua for sawmill managers and technical staff. As our most popular sawmilling and networking event, with both local and international technical experts speaking, it was very well- received.

Moving to wood in construction, our team also ran a one-day the 2nd Annual "Changing Perceptions" Conference for building owners, developers, architects, engineers and specifiers. The focus was on “Advantages of Timber in Mid-Rise Construction". Many of our experienced speakers demonstrated how savings can accrue using the latest wood products combined with building information modelling. Both events were well-attended and received very positive feedback. Wood manufacturing for mid- rise and tall timber buildings is catching on fast. That said, we have some way to go, on this side of the Tasman, to catch our Australian colleagues, but the signs are all positive.

It is with some irony that our first two stories demonstrate the difference between how organisations and companies make investment decisions to ensure their short and long-term prosperity. A council-owned entity in Dunedin holds their long-term investments in forests; something that many cash-strapped city councils typically don’t do here. Meanwhile, some sawmill owners have invested in milling equipment in preference to purchasing forest asset feedstocks, but are now hoping a new government will create policy to tilt log prices in their favour over export buyers.

Meanwhile, in Australia’s forests, it's now clear that lucrative log markets in China have resulted in a tripling of softwood log export volumes from Australia the past four years, according to recent market reports. From 2012 to 2016, the export volume was up 300%, and 2017 is likely to set a new record high, according to analysts. Rising log prices in the export market have been the key drivers of the increase in exports. Conversely, prices in the domestic market have stagnated the past few years.

Also in Australia, but highly relevant to issues here in New Zealand, Timberlink’s new employment opportunities campaign is a great advertisement for our industry.

In other news, an ASB rural economist ran the rule over commodities and the forest sector in recent reports, outlining moderation in several areas that had recently enjoyed strong demand and prices. Looking at the record high log prices that have seen 2017 turn out to be a banner year for forestry, he predicts, “it is unlikely to repeat over 2018.”

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Forest policy: Between a sawmill and a log ship

Forestry topical during political stand-down period (or "Between a rock and a hard place") - Politics and forestry are not usually used in the same sentence in New Zealand as a rule. However, this week, as the mainstream media is desperately seeking ways to be relevant on a daily basis. It's because of the conversation vacuum while special votes are being counted, so speculation has turned to some debating potential policy alignments, including forestry earlier this week.

At 7:42 am on Tuesday Radio NZ spoke with Mark Hansen of Rosvall Sawmill in Northland and Jon Tanner of WPMA.

Intro: New Zealand First leader Winston Peters says the future of forestry, and timber supplies for local mills, is one of the issues important to him as he enters talks to form a new government. Mr Peters has previously championed Northland wood processors who say they're being pushed out of the market by overseas forest owners and buyers.

Click here to listen:

At 8:47 am yesterday Radio NZ then gave David Rhodes of NZFOA the right of reply on the issue.

Intro: New Zealand First leader Winston Peters wants a new Forest Service and potential local industry quotas made a priority in any coalition negotiations this week. The MMP 'kingmaker', who's planning to talk to both National and Labour, has told RNZ the new government needs to safeguard wood supply to New Zealand mills. David Rhodes is the chief executive of Forestry Owners Association, representing the owners of commercial forests. He's discussed the issue with Mr Peters a few times and tells us he's welcoming the plan.

Click here to listen:

Source: Radio New Zealand

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City Forests adds to strong result

City Forests adds to strong annual result for Dunedin City Holdings Limited (DCHL) group as they recorded a net surplus of $18.5m for the year ending 30 June 2017. The pre-tax surplus of $29m was $5.8m ahead of target.

DCHL Chair Graham Crombie says the result is a continuation of solid returns for the group, saying “This is a strong result which reflects the hard work and focus of staff and directors of the DCHL group of companies.”

2016/17 highlights • The group returned a before tax profit of $29m • Debt dropped by $7.87m • City Forests Limited’s surplus increased by $4.08m • Dunedin International Airport Limited experienced a significant rise in revenue due to higher passenger numbers and movement to larger aircraft DCHL has distributed $5.9m directly to the Dunedin City Council (DCC) by way of interest and $2.2m to Dunedin Stadium Property Limited by way of subvention payments. This is the first year that the operating results of Dunedin Stadium Property (the company which owns the Forsyth Barr Stadium) and Dunedin Venues Management have been brought under the DCHL umbrella.

DCHL’s assets sit at $1.172b. This compares favourably with group borrowings, which have decreased from $581m at June 2016 to $573m at June 2017.

City Forests' surplus for the year again increased substantially from that recorded the previous year. A pre-tax surplus of $27.5m was generated compared to $22.3m the year before. The increase in surplus is due favourable market conditions and a substantial revaluation of forestry assets.

“A continued favourable interest rate environment will assist in reducing the cost of debt for Dunedin City Treasury Limited, and assist City Forests to continue operating well in the global market.”

City Forests had a very successful year, with an excellent trading result (surplus after tax $20.1m) supported by strong cash flows ($12.2m operating) allowing the company to provide a record dividend payment. Strong demand from both the domestic and export markets was the main reason for this.

Dunedin International Airport achieved an operating surplus of $2.3m for the year, up on the $1.9m surplus for the previous year. The company paid a dividend of $704,000 during the year.

Source: Scoop News

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Economist sees clouds on forestry horizon

The forestry sector is heading into 2018 with some speed wobbles, following stellar times during the past almost two years, according to a recent ASB rural report.

Chinese demand and an easing in competition from some other countries has seen forestry notch up some its best log export prices in years, but as with much of the agricultural sector, the strength of the New Zealand dollar is weighing heavy.

ASB rural economist Nathan Penny last week ran the rule over commodities and the forest sector in recent reports, outlining some moderation in several areas which had recently enjoyed strong demand and prices.

Mr Penny said 2017 had been "a year out of the box" for forestry, with log prices at or near record highs for most of 2017.

"However, forestry’s banner 2017 year is unlikely to repeat over 2018," Mr Penny said in a statement.

Mr Penny outlined a triple whammy of concerns facing the sector next year, from the dollar strength, to Chinese demand and shipping rate rises, which had been a crucial element of costs for exporters in recent years.

While the New Zealand dollar was weak it had been supportive of prices, but he predicted it would rise from around US72c at present to US75c by mid next year and US77c by the end of 2018.

In China, Mr Penny said there was concern about a decline in the growth of house prices, translating into its construction, which meant "consistently firm" demand may "soften".

He said shipping rates were continuing to rise off last year’s lows, with the key Baltic Dry Index prices in September more than 60% higher then September last year.

Mr Penny also highlighted a "positive" in that domestic demand around the country was "likely to remain firm".

"The [New Zealand] construction backlog is long and likely to continue to drive activity and demand for logs and timber for years to come," he said.

"All up we expect forestry prices to ease over 2018.

"However, prices are likely to remain high by historical standards with local construction still underpinning prices," he said.

More >>

Source: ASB & ODT

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Streamlined Building set to grow CLT supply

Since veteran property investor Bob Jones announced his intention to build a high- rise office building in Wellington using engineered wood, the spotlight in industry has been on this new form of construction. Coincidentally, at a national wood building event in Rotorua last Thursday, a major Australian building company announced its intention to grow New Zealand’s capacity to build more wood office towers and residential units.

Speaking at the Innovatek "Changing Perceptions" Conference, Strongbuild's business development manager Shane Strong, announced that they are launching a new business entity called Streamlined Building Solutions which will be a supplier of engineered timber products into the New Zealand marketplace.

“Streamlined Building Solutions will be a full service engineered timber resource centre that will be able to address the supply concerns of many NZ builders,” said Mr Strong.

“We are offering a full suite of services from design, drafting and detailing to installation, compliance and certification,” he added.

Streamlined Building Solutions is an alliance between two like-minded companies , Strongbuild and Binderholz, dedicated to inspiring a positive, healthy change in the building industry. Binderholz is the leading European manufacturer of Engineered Timber product with a history spanning more than 60 years. Binderholz currently produce over 250,000m3 of CLT per year. Strongbuild is Australia’s leading innovator in the Timber Revolution, with extensive hands on local experience in CLT design, drafting, offsite manufacturing, compliance, certification and construction.

Streamlined Building Solutions is the exclusive distributor of Binderholz Engineered Timber Product (CLT and glulam) in Australia and New Zealand.”

Innovatek director John Stulen says, “Right now our local market will welcome this new supply capacity for engineered wood panels and multi-residential housing capacity. With more office buildings like the one Bob Jones is planning set to go ahead Strongbuild’s arrival here is good news for the market in Auckland and the regions.”

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Australia on the up with log exports

Australia has rapidly become a major exporter of softwood logs and was the world’s sixth largest log exporter in 2016. During the 1H/17, the upward trend continued with shipments being 17% higher than in the 1H/16. In 2012, Australia’s annual exports totaled only 1.2 million m3. Just four years later, in 2016, exports had tripled to a record high of 3.6 million m3, of which 96% was destined for China. If the upward trend seen this far in the first six months of 2017 continues, export volumes could potentially exceed four million m3 in 2017, which represents approximately 25% of the total softwood timber harvest in Australia.

Based on the numbers, log exports is becoming an attractive market diversity to domestic sales for timberland owners in Australia. Wood Resource Quarterly reports that in 2012, there were minimal price premiums for exported logs over domestic logs, but by 2016 and 2017, premiums had surged to between A$35-50/m3. Despite these recent price increases, Australia is still considered to be a low-cost log supplier in the Chinese market as compared to other suppliers such as New Zealand, Russia and North America, mainly because of higher domestic sawlog prices in those markets.

Higher log export volumes have occurred at the same time as domestic log demand has gone up over 20% in four years, from 3.6 million m3 of lumber in 2012 to an estimated 4.4 million m3 in 2016. Although sawmill production fell slightly in 2016 from the previous year, the output from the Australian sawmill sector reached record high levels the past two years thanks to healthy domestic demand for softwood lumber.

Source: Wood Resource Quarterly

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NZ Logger - High five for new Cat

The newest member of the Cat 500-series swing machine range has taken a while to reach the market, but the wait has been well worth it. The first Cat 538 LL loader is now working for Goodman Logging in Kinleith Forest and is featured in the October issue of NZ Logger magazine.

There was a time when dairy relied heavily on timber for butter boxes and cheese crates as packaging for exports, which led to The Egmont Box Company being established in the early 20th century, and its history and final demise are covered in the same issue.

The current issue also reports on the NZ Institute of Forestry's annual conference in Rotorua. Plus much more, in the October 2017 issue of NZ Logger, now on sale at selected service stations, or to subscribe for either the printed version and/or the digital version, visit www.nzlogger.co.nz

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Timberlink launches employment campaign

New employment opportunities campaign is a great advertisement for our industry - Timberlink’s growth and reinvestment has been significant over the past 5 years and the plans are for this to continue. With this strategic imperative of growth and sustainability, the company has recently launched a campaign promoting the employment and career opportunities at the Australasian company.

Since becoming Timberlink, the business has increased its employment by 151 additional full- time equivalent employees over the past 5 years and these additional people have joined the business from a range of industry backgrounds, technical disciplines and skills sets.

Timberlink’s CEO, Mr Ian Tyson, commented that “we are very proud of our growth and the exciting new opportunities with our business, both for internal promotion and external recruitment. The one common ingredient in all of this is our commitment to our personal and professional culture. It’s those ingredients that will help us continue to be successful with our customers and also provide rewarding jobs and careers with Timberlink.”

The new employment campaign was launched in August and includes both traditional and on- line media to promote the Timberlink business as being “big technology, big machinery, and big on safety and people”.

The themes are obvious and probably could and should apply to the whole industry, especially when you look at our whole supply chain.

Timberlink is proud and pleased to be leading the charge on promoting these aspects of their company and the overall timber industry.

The company has a number of opportunities currently in its regional operations and also at its Melbourne office. For more information, contact [email protected]

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Daiken seeks clearance to buy Dongwha

The Commerce Commission has received a clearance application from Daiken New Zealand Limited to acquire 100% of the shares in Dongwha New Zealand Limited.

Daiken is the New Zealand subsidiary of Daiken Corporation, a Japanese company specialising in the manufacture and supply of wood-based construction materials. In New Zealand, Daiken manufactures and supplies medium density fibreboard (MDF) from a plant it operates in North Canterbury.

Dongwha is 80% owned by Dongwha International Co Limited (a company incorporated in Hong Kong) and 20% owned by Laminex Group (NZ) Limited. In New Zealand, Dongwha manufactures and supplies MDF from a plant it operates in Southland. Its minority shareholder, Laminex (which is part of Fletcher Building Products Limited), purchases MDF from Dongwha for its own wood products business in New Zealand. Laminex also on-sells some of the MDF it purchases from Dongwha to other parties.

A public version of the clearance application will be available shortly on the Commission’s Clearances Register. (see www.comcom.govt.nz/business- competition/mergers-and-acquisitions/clearances/clearances-register/detail/1068)

When considering a proposed merger, the Commission must determine whether any competition that would be lost with the merger would be substantial. We will give clearance to a proposed merger only if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

A fact sheet explaining how the Commission assesses a merger application is available on our clearances page. (see www.comcom.govt.nz/business- competition/mergers-and-acquisitions/clearances/)

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More apprentices needed says Competenz

“We Need More Apprentices” Says Leading Industry Trainer - Competenz joins 200 top NZ businesses to boost ‘unqualified’ workforce

Competenz is the first Industry Training Organisation (ITO) to join more than 200 leading New Zealand businesses pledging to support employing people without tertiary qualifications.

Competenz is backing the movement, initiated by an open letter from 100 New Zealand businesses which encourages businesses to recruit staff based on their skills, attitudes, motivation and adaptability. In less than one week support for the initiative has increased from 100 to 200 businesses, and included in the lineup of 200 are ASB, Spark, Xero, TVNZ, Icebreaker, My Food Bag and Buckley Systems.

Competenz CEO Fiona Kingsford says the ITO, which represents 26,000 apprentices and trainees across 36 industry sectors, is encouraging those employers, and any more who are interested to go a step further.

“We encourage employers to commit to investing in the people they hire, to ensure they gain on-the-job training and qualifications. The letter released for the NZ Talent movement sends a clear message to young people that apprenticeships and on-the-job training are a valid pathway to employment.”

Competenz customer ATNZ, New Zealand’s largest employer of mechanical engineering apprentices, has also signed the NZ Talent letter.

Kingsford says: “There are genuine job opportunities for New Zealanders that pay from day one; we are aware ATNZ currently has 40 roles to fill. For jobseekers looking for a career in the trades, doing an apprenticeship is an excellent way to gain experience and a qualification without accruing student debt.”

Kingsford says traditional tertiary pathways are not for everyone.

“There is a significant shift happening in New Zealand where people are steering away from traditional university learning. It’s great to see leading Kiwi businesses recognise this.”

Ministry of Education data reveals that in 2016, 45 percent of new apprentices already had a tertiary qualification, compared to 24 percent in 2010, confirming they had tried tertiary pathways but found apprenticeships more valuable for their future.

The NZ Talent initiative is also designed to directly address the current high level of unfilled job vacancies. The open letter states there are unfilled positions in the fields of technology, science, design and innovation, and that the job market is changing. “Across a range of skills-based roles we do not require applicants to hold a formal qualification – these are ‘NZ Talent’ positions and part of a global trend recognising the growing demand for contemporary skills often learnt outside formal education programmes.”

Kingsford adds that the initiative shows the need is there for more on-the-job training that will help meet the government’s target of 50,000 people in apprenticeships by 2020, up from 42,000 currently.

“Work-based learning is increasingly important as jobs are being redefined by technology. Competenz represents 36 industries including mechanical engineering, manufacturing, fabrication, forestry, wood manufacturing and maritime, and the fact that 200 companies have already come on board is exciting for both young people and also for businesses to develop their approach to recruitment.”

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London architect fights climate change

Architects are turning to one of the oldest construction materials to solve a new problem: how to build homes without damaging the environment.

A London firm says sustainable timber could help the city address its housing shortage while reducing carbon emissions.

"If you look at a building's climate footprint over 14 years, it is about 80% the building materials that go into it," Andrew Waugh, a founding partner at Waugh Thistleton, told CNNMoney. "We need to change the way we live for climate change."

Buildings are responsible for approximately 45% of carbon emissions in the U.K. but very little attention is paid to the role of construction materials, Waugh said. Waugh Thistleton has just built a 10-story, 17,000-square foot structure entirely of timber in east London. They billed it as the world's largest construction made out of cross laminated timber (CLT), an engineered hardwood.

The material, which the architects say isn't a fire hazard, is made by squeezing together sheets of lumber using a strong adhesive and a powerful hydraulic press. "Building up these cross layers of timber, that's what gives this panel its real unique strength," Waugh said, comparing it to cement or steel.

His firm built its first timber tower in London in 2008, showing the material could be used for more than just small houses and primary school classrooms.

Waugh Thistleton Architects says their Dalston Lane project is the world's largest construction made out of cross laminated timber.

Greener, lighter and saves on space - Timber is considered to be kinder to the environment than materials such as cement and steel, whose production generates large amounts of greenhouse gases and consumes lots of water and sand.

Trees, on the other hand, are a renewable resource and replace carbon dioxide in the atmosphere with oxygen. Waugh's firm gets its timber from sustainably managed forests in Austria.

The panels it uses are relatively light compared with steel and concrete, meaning less fuel is required to transport them to construction sites.

That weight advantage also means more floors can be built on a single piece of land, providing more space for living in densely populated London neighbourhoods.

Timber buildings have thinner wall and flooring panels than their concrete counterparts, allowing larger living spaces. The density of the panels also helps keep heat in, which saves on energy bills.

And though using timber in tall buildings might seem like a fire risk -- a particular worry in London after the deadly Grenfell Tower blaze -- CLT is fire resistant, according to Stora Enso, a producer of renewable materials. CLT chars, rather than burns, meaning it keeps its structural integrity for longer than some other materials such as steel.

Source: money.ccn.com

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Pilot CLT plant in China

A delegation from the Canada Wood Group recently visited a CLT plant in Ningbo, Zhejiang Province on 31 August. The plant is a first pilot plant for a company, Ningbo Sino- Canada Low-Carbon Technology Research Institute, whose chief technology officer is a former senior scientist at FP Innovations, Dr Brad Wang.

Dr Wang is a professor who studied CLT technology for several years. He has abundant knowledge. He was involved in writing CLT Manufacturing Chapter II of CLT Handbook (both Canadian and USA versions) in June 2012 and 2013. Two years later, Dr Wang led a group back to China and built this first pilot CLT plant and made the first batch of Canadian hemlock CLT. The plant covers an area of 13,500 m2 in Ningbo and was commissioned in November 2015.

At the plant, the group was shown a mature and professional CLT production. Hemlock pieces are glued together with imported glue, then rolled to press process. The operation is strictly in accordance with Canadian manufacturing process. The company holds a patent for its hemlock CLT and bamboo-wood composite CLT in China.

“If we could gain 5% market share, the market for prefabricated wood construction will be about CAD $25 billion annually. There is a big move in China to off-site construction. Two standards have been officially published in 2017 related to prefab wood construction”, said Dr Wang. CLT can be used not only for construction, but also for indoor/outdoor furniture.

Source: Canada Wood

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... almost finally ... flip the fleet???

Why wait before you buy your first electric car? - Most New Zealanders would save more than five times the interest on any loan they would have to take out to meet the extra cost of buying an electric vehicle.

This is finding of Flip the Fleet, a citizen science collaboration of over 330 EV owners who have signed up to share data from their cars’ dashboards each month. The median return on investment on a notional loan for the added cost of their EV in August was 526%.

It’s no wonder therefore that 76% of 213 EV owners polled this month by Flip the Fleet reckon that people should buy an EV immediately. Only 16% reckon it would be best to wait another year, and 8% advise people to wait 2-5 years to allow the price of EVs to come down further, for a greater variety and longer range EVs to enter the market, and for better public charging infrastructure for long distance travel in EVs.

“The top 5% of our data contributors save more about 16 times the interest needed to pay more up front when they buy their EV” says Dima Ivanov, a co-founder of Flip the Fleet.

“These winners are in a sweet spot because they regularly commute long distances to and from work each day, or drive the kids around to all those after school activities. On the other hand, about 8% of EV owners only just break even or lose money on their added investment in an EV because they don’t drive it far each month, or purchased a more expensive luxury EV”.

Petrol is a lot more expensive than electricity for propelling a car over the same distance, and electric motors need a lot less maintenance and repairs because they have way fewer moving parts than an internal combustion engine. But you have to be using your car for the savings to mount up enough to outweigh the higher upfront costs of switching to electric.

The financial gain has a lot of EV owners wondering why more New Zealanders aren’t buying EVs right away. One respondent to Flip the Fleet’s September poll asked “Why not print money while you cruise around in a cool car?”. Another stated: “Buying an EV has raised my standard of living by being cheaper to run. And my EV is safe and oh so comfortable”.

Some people buy EVs mainly for environmental reasons, particularly to reduce greenhouse gas emissions that cause climate change. Others just love the high performance and pleasant driving experience. Most see multiple benefits. One said “You’re saving money while you’re saving the planet”.

“We think a lot of people are waiting unnecessarily before they switch to electric cars” said Mr Ivanov. “Several of our drivers pointed out in this month’s poll that you can put the money you save from buying an EV now into upgrading to a newer and improved EV model later”.

One respondent said “Electric cars are a bit like computers and phones - there is never an ideal time to get into the market as there is always something better on the horizon. But the sooner you enter the market, the sooner you start making savings and a difference to the environment”.

“We think buying an EV now is a particularly smart option for two-car families” says Mr Ivanov. “You can keep an old conventional vehicle for occasional long distance trips or towing, and still more than pay for the back-up by switching most of your running over to an EV for most of your local weekly travel needs”.

Only 21% of the households contributing data to Flip the Fleet own just one, or occasionally two, EVs and no internal combustion vehicles. The rest have one (64%), two (13%) or even three (1.3%) internal combustion vehicles as well as their EVs.

Flip the Fleet is a citizen science project that provides scientifically reliable information on the benefits and constraints of electric vehicles in New Zealand. The project is partly funded by MBIE’s Curious Minds portfolio, through Otago Museum.

Participation is free and all New Zealand’s electric vehicle owners can enrol at www.flipthefleet.org

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Buy and Sell

... and finally ... taking security too far

Near the end of a very hectic week and after an intense business meeting several days ago, I couldn’t find my keys. I quickly gave myself a personal “TSA (airport security-type) Pat Down”.

They weren’t in my pockets. Suddenly I realised I must have left them in the car. Frantically, I headed for the parking lot.

My husband has scolded me many times for leaving my keys in the car’s ignition. He’s afraid that the car could be stolen.

As I looked around the parking lot, it dawned on me that this time) ... he was right. The parking lot was empty.

I immediately called the police. I gave them my location, confessed that I had left my keys in the car, and that it had been stolen.

Then I made the most difficult call of all to my husband: “I left my keys in the car, and it’s been stolen.”

There was a moment of silence. I thought the call had been disconnected, but then I heard his voice. “Are you kidding me?” he barked, “I dropped you off!”

Now it was my turn to be silent. Embarrassed, I said, “Well, come and get me.”

He retorted, “I will, as soon as I convince this cop that I didn’t steal your car!”

Have a safe and productive week.

John Stulen
innovate | communicate | motivate

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