WoodWeek – 17 January 2018

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Greetings from your WoodWeek news team. Wow, lots of news to catch up on this week, if you did the ‘real’ holiday thing and didn't look at work stuff. So it’s good to be back – that’s not news, just a good way of dealing with reality. Indeed, today’s issue contains some inspiration to get you motivated again. Leading the way today though, the main stories are about markets. The market rates for forestry graduates working in our industry is another positive story.

Thanks to the good folks at Scion and Champion Freight we have some log export market highlights for you. It is hard to grasp yet another year of Chinese log export market growth, but the facts are there. For the 2016 calendar year China took 71% of our log exports; for 2017 it was 75%. By Dec 2016 year-to- date (YTD) China market growth for NZ logs was 32% up on the 2015 year; for Nov 2017 it is up 26% on 2016. Great news for log exporters, less so for local wood processors. Read on for their viewpoint.

The market response to year-on-year growth in double figures is expressed by Scion market outlook respondents. Many expressed concerns that current contractors (harvesters and transporters) and port infrastructure could become constrained.

Moving to the front end of our industry and tree-planting, there has been some practical action since the election. Cabinet has given the green light to allow Crown Forestry to enter into new commercial arrangements to plant trees on privately-owned land and to provide $14 million of funding to support the planting of trees next year and the purchase of seedlings for 2019.

So, it’s good to have you back on board for another year. We’ve got some exciting changes planned for the coming year, but you’ll have to wait and see what’s in store when the time is right. As your ‘wood news’ eyes and ears, we also look forward to seeing how our industry deals with a more engaging group of politicians and government officials. We also look upward to see how markets for NZ Wood including cross-laminated timber or mid-rise and tall timber buildings fare.

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Export log prices concern wood processors

New Zealand log exports hit a new record last year, underscoring the concerns of local manufacturers that the country is sending too many unprocessed logs overseas, posing a threat for local timber supply in the future and undermining the goal to add more value to exports.

The country exported $2.41 billion of softwood logs in the first 11 months of last year, surpassing all previous records for any full calendar year, according to the latest Statistics New Zealand figures. Data for the full year will be released on 30 January.

New Zealand is experiencing strong demand for logs from China, which has clamped down on harvesting its own forests and reduced tariffs on imported logs to meet demand in its local market. In the first 11 months of 2017, New Zealand exported $1.81 billion of logs to China, above the level for any full calendar year and accounting for 75 percent of softwood exports.

Increased shipments of raw logs goes against the aim of successive governments to add more value to commodities and riles the wood processing sector, which says more manufacturing needs to be done at home to sustain the local industry. It says an uptick in demand for wooden housing could see supply having to be met from overseas if the current situation prevails.

Prior to the election, the wood industry, representing New Zealand’s third-largest export commodity group, was annoyed at the lack of attention it received from the Ministry for Primary Industries which it felt was more focused on food safety, agriculture, horticulture and biosecurity of the border. Forestry, it was felt, was at the bottom of the MPI pile and fronted by junior ministers and officials.

The industry starts this year in a more upbeat mood with the new coalition government’s commitment to re-establish the Forest Service, plant more trees, focus on regional economic development, require greater scrutiny of overseas investment in forestry, and improve the Emissions Trading Scheme for forestry amid industry concerns that foresters couldn’t compete with rival land users such as dairy farmers under the current system.

“We are certainly on the radar now with the government very much pushing in the right direction. The whole industry has a much higher profile now,” said Jon Tanner, Chief Executive of the Wood Processors & Manufacturers Association. “Forestry worldwide has to have the hand of government.”

While government initiatives gave the industry more optimism about the long-term future, Tanner said uncertainty remained around the shorter term issue for the domestic market of more unprocessed logs heading overseas.

“We are still very concerned about the competition in the market right now and where that is going and how that is going to be regulated and tackled,” he said. “We have got a major problem in the set up of the market. We have got a lot of logs being exported, and it’s being increased.

“The demand out of China, all the pundits are saying, it’s just only going to increase.”

Other wood exporting countries such as Canada and Russia support their local industries while Chinese wood manufacturers benefit from subsidies, creating an uneven playing field for New Zealand processors, according to the WPMA which would like to see the government take a complaint to the World Trade Organisation.

Tanner said the WPMA was contacted by its counterparts in Australia late last year who were starting to experience a similar problem of increasing log exports to China.

Source: www.wpma.org.nz

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Key Events in 2018 – Mark your diaries

Again, after an incredibly busy year, the Forest Industry Engineering Association (FIEA) has in conjunction with a wide cross section of industry on both sides of the Tasman, developed an Events Planner for next year. With again very high turnouts at all FIEA technology events that have been run this year, we’re really excited with what 2018 holds.

The Events Planner will enable; forestry and wood products companies to pencil the dates into your own calendar for next year and industry associations, research organisations and those involved in setting up your own programmes for 2018 to take note of the dates (and ideally look to dovetail in to the tech events timing and location to add value to the industry and those likely to attend).

For product and service suppliers, we hope this forward planning will also enable you to schedule your involvement and to budget early on in the year to the relevant tech event and for overseas suppliers, it will enable you to lock in a time to plan visits to your key customers or distributors in Australia and New Zealand and to link in to the relevant technology events in this part of the world next year.

FIEA forestry or wood products technology events being planned for 2018 include;

1. Woodflow 2018
20-21 June 2018, Melbourne, Australia
26-27 June 2018, Rotorua, New Zealand
www. www.woodflow.events

2. Forest Industry Safety & Technology Conference
8 August 2018, Rotorua, New Zealand
15 August 2018, Melbourne, Australia

3. WoodTECH 2018 – Wood Manufacturing
Dry-mill Scanning, Wood Machining, Timber Manufacturing
11-12 September 2018, Melbourne, Australia
18-19 September 2018, Rotorua, New Zealand


4. ForestTECH 2018
Data Collection & Management – Remote Sensing – Mobile Communications & GIS
14-15 November 2018, Rotorua, New Zealand
20-21 November 2018, Melbourne, Australia


Other forestry technology events being planned include;

1. ForestTECHx
6-7 March 2018, Vancouver, Canada

2. MobileTECH 2018
Primary Industries – Innovation through Smart Data
27-28 March, Rotorua, New Zealand

Mark the dates into your 2018 calendars. At this early stage, if interested in either presenting or exhibiting, let us know early on and if appropriate, we can look to build you into the planned programmes.

Attached for your information is a PDF of 2018 Technology Events which provides you with further information on the schedule of tech events planned for next year.

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New mandate for Crown Forestry for planting

Hon Shane Jones Minister of Forestry Crown Forestry to get planting - Just before the holiday break Forestry Minister Shane Jones welcomed a renewed mandate for Crown Forestry to enable it to kick-start the Government’s tree planting programme.

Cabinet has given the green light to allow Crown Forestry to enter into new commercial arrangements to plant trees on privately-owned land and to provide $14 million of funding to support the planting of trees next year and the purchase of seedlings for 2019.

“The ambitious one billion trees planting programme is one of the Government’s cornerstone policies,” Mr Jones says.

“It will help encourage regional economic growth, create sustainable, high-quality jobs, provide opportunities for Maori to develop their land, help meet our climate change targets and support more sustainable use of land, water and other natural resources.

“Initial projections indicate that the planting of one billion trees over 10 years could lead to between 10 and 30 million tonnes of additional carbon dioxide removals.

“Quick action has been required by the Government to ensure Crown Forestry can purchase seedlings from nursery stock and get planting during the winter season.

“While there are limited surplus radiata pine seedlings available for 2018, discussions with members of the New Zealand Forest Nursery Growers Association have indicated that nurseries have the ability to scale up significantly for the 2019 planting season.

In addition to the trees that Crown Forestry will plant, work is under way to determine the potential to boost the number of native trees planted as well as ensuring that the number of trees being planted can be accurately counted.

“Crown Forestry has the capability and connections with landowners in the regions to get new forestry plantings underway immediately.

“Work is also under way to develop a comprehensive afforestation programme that takes various issues into account, including the supply of labour, improving the Emissions Trading Scheme for forestry and afforestation and incentivising land use.

“This is the first in many milestones in the tree planting programme. As further work is progressed to establish a Forestry Service, I will take proposals back to Cabinet covering the more fundamental considerations on future funding for Crown Forestry, its role and governance structure,” Mr Jones says.

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NZ Log Export price outlook

According to respondents to the regular industry survey by Scion of log export industry, log prices are expected to increase further, but below the levels that were expected in August (see Figures 1 and 2).

In general a steady increase in log volumes is expected (Figure 3). However, many participants expressed a concern that current contractors (harvesters and transporters) and port infrastructure could become constrained.

Expectations for pruned log prices have also changed. In August pruned prices were expected to increase, but by November a flatter outlook was forecasted (See Figure 4).

Eighty-nine persons participated in the most recent outlook survey. They included people working in local and international forestry companies, processors, export companies, consultants, private forest owners, service providers, transport and shipping companies, researchers, journalists and government representatives.

To read the full report click here >>

Source: Scion

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Recent graduates do well in forestry

Recent tertiary graduates are earning good incomes in the forest industry, according to a recent survey by the New Zealand Institute of Forestry (NZIF).

A survey of 600 NZIF members indicates recent graduates in the forestry sector are attaining a median gross salary of $58,520, which increases to $62,725 for a total remuneration package.

NZIF spokesperson Tim Thorpe says many of the graduates would have a degree from the University of Canterbury Schools of Forestry and Engineering. But he says others would be included in the recent graduate category as holders of New Zealand diplomas in forest management or similar, from Toi Ohomai in Rotorua, NorthTec in Whangarei or EIT in Gisborne.

“For a diploma qualification, a starting salary of more than sixty-thousand dollars is a good start up the career ladder and shows that there is a good future in forestry. There are many skillsets that make up a forestry career,” Tim Thorpe says.

The survey, conducted in October with a third of those surveyed responding, also shows people with diploma qualifications (at $117,500) were earning slightly more than those with a doctorate ($115,404).

“This could be that the PhDs are new to the industry and lack experience, while the forestry people with a diploma have a number of years in the industry. As time goes on, those who have spent the extra time getting their doctorate will be rewarded after they have also gained experience on the job,” Tim Thorpe says.

The survey also shows the median gross salary of NZIF members in the private sector was $110,000, which was up to $20,000 a year above members employed in the public sector of the industry or in scientific work.

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Champion Freight Export Reports

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. They have some easy-to-read labels on the charts so they are readily identifiable even when printed in black & white.

To download the full report, click here.

Source:Champion Freight

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Foresters highlight risks; applaud MPI decision

Forest Owners highlight biosecurity risks as good reason to keep forestry under MPI - The Forest Owners Association believes the government appears to have got the balance right in creating a separate Forestry New Zealand, but keeping it as part of the Ministry for Primary Industries.

Forest Owners Association President Peter Clark says the need to have a large response capacity to counter a pest or disease incursion, is by itself a good justification for keeping forestry under the government’s wider primary industry umbrella.

“In just the past couple of years there’s been two types of eucalypt beetle, as well as myrtle rust, turning up from Australia. None of them appear at this stage to be a disaster for the plantation forest industry, but one day we’ll get a really bad pest or disease which turns up here that needs the whole resource of government to eliminate or control it. That resource is MPI.”

Peter Clark says market access is another critical part of maintaining the prosperity of all our primary export industries.

“MPI has expanded its presence into key trade diplomatic posts in the past few years. We need to have their specialist primary industry expertise on the ground in the markets to keep our forest product exports going, especially around highly technical phytosanitary rules and product specifications.”

MPI has addressed many forestry issues in the past few years, even without a dedicated forest section within it, according to Peter Clark.

“They certainly have been active. In particular, in finalising a National Environmental Standard for Plantation Forestry. They have done the big jobs of administering and reviewing the forestry aspects of the Emissions Trading Scheme, biosecurity surveillance and responses and assistance. MPI’s support was vital to ensure New Zealand pine was included in the Chinese Building Code review.”

Peter Clark says on the other hand, the announcement of the creation of a new Forestry New Zealand is a vital response to the increasing importance of the plantation forest sector to the national economy and the new Minister, Shane Jones’ aim to see a billion trees planted over ten years.

“To go with Forestry New Zealand, we now have a high profile and specific Forestry Minister. Before we only had an associate ministerial ranking in the primary industries portfolio, who sometimes was not even in the cabinet. This new status is certainly an improvement,” Peter Clark says.

“I know there could be a lot of devil in the detail of where the responsibilities are going to be divided between Forestry New Zealand and MPI and what it means when the government describes Forestry New Zealand as a ‘portfolio-based business unit’. But I anticipate we’ll be able to work through these details in association with the Minister.”

“We certainly anticipate the unfortunate drift of forest industry expertise out of MPI over the past few years will be reversed. We see a strong focus on appropriate forestry staffing within the Ministry and FNZ, some clear objectives and core purpose which we feel was lacking previously.”

“Strengthening a government presence in Rotorua also makes sense given that our CRI, Scion, is located there, and the important forestry training school at Toi Ohomai Institute of Technology is there too. There are many forestry management and support companies in Rotorua, as well as Red Stag, the country’s largest sawmill. We also shouldn’t forget that Rotorua Lakes Council is the only local body in New Zealand to support the industry by adopting a wood- preference use policy.”

“FOA members look forward to working closely with Forestry New Zealand to help realise forestry’s potential for national GDP contribution, exports, employment and environmental outcomes, including helping New Zealand meet our Paris Agreement on Climate Change commitments. And all at the least cost to the taxpayer.”

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DoC praises Tasman Pine Forests team

Forest company praised for protecting Kea nest - The Department of Conservation (DoC) is praising a Nelson forestry company for temporarily halting operations around a kea nest to protect the kea.

The kea nest, with two chicks about 2 ½ months old, was found in a disused culvert at a Tasman Pine Forests Ltd skid-site in the Motueka Valley.

DoC Operations Manager Chris Golding thanked Tasman Pine Forests Ltd for suspending operations near the nest until the chicks start to fly and leave the nest in about a month.

“Work with vehicles and machinery around the nest might’ve damaged the nest or caused disturbance to the kea family that could be detrimental to their welfare.

“Kea is an endangered species and being able to safely raise chicks in their nests is important to increasing kea numbers.”

Tasman Pine Forests Ltd Health, Safety, Environment & Risk Coordinator Rebecca Sharp said the company takes its environmental stewardship responsibilities seriously.

“The chicks were reported to us and the Kea Conservation Trust by a harvesting contractor. We’re really pleased that these chicks were found in our estate, and that we can contribute to the conservation of this unique, nationally threatened species.

“This has been a great working example of the successful implementation of the Kea Guidelines for Plantation Forestry, developed by the Kea Conservation Trust and the New Zealand Forest Owners Association.

“We will retain the disused culvert that the chicks were found in, in the hope that the kea nest there again next year.”

Kea Conservation Trust Conflict Co-ordinator Andrea Goodman said many forestry sites were in areas where there are kea and the Kea Guidelines for Plantation Forestry included advice for preventing kea damage to forestry equipment and for protecting kea.

“Kea are inquisitive and social birds and, because of this, they interact with people and property,” Ms Goodman said.

“The guidelines include ways for forestry companies to discourage kea from hanging around harvest sites and for protecting equipment if they are around.

“It’s important not to feed kea or leave food scraps lying around. Other steps include ignoring kea, covering equipment, and using cinnamon or garlic paste on equipment as a repellent.

“I think it’s awesome that the guidelines we’ve spent two years developing actually work. The response from Tasman Pine was textbook and shows their genuine commitment to kea conservation.”

The New Zealand Forest Owners Association has provided the Kea Guidelines for Plantation Forestry to forestry companies so they can incorporate them into their environmental practices.

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Nature of deaths concerns WorkSafe

The nature of deaths in the forestry industry is changing, worrying WorkSafe NZ - WorkSafe NZ is concerned about a rising number of deaths in the forestry industry after a recent fatal accident in which a bulldozer crashed off a steep Wellington bank, killing its driver.

The 2017 total death toll reached six when the vehicle crashed down an 80-metre drop in Makara, on Wellington's west coast.

While that is fewer than the 2013 high of 10 deaths, it is an increase of two on 2016, and three on 2015.

In previous years, the causes of forestry deaths generally involved tree-felling, WorkSafe chief executive Nicole Rosie said.

However, half of 2017's deaths have involved being in or around machinery.

"This sixth death in forestry this year is a tragedy for the man's family, his colleagues and the industry.

"Forestry has made notable improvements in health and safety performance since 2013 when 10 men died doing their jobs, but WorkSafe is concerned at data this year showing a slowly rising incidence of fatalities, and in severe injuries.

"It is also apparent from the data that this year, the causes of fatalities in forestry have changed, reflecting a change that's evident across the health and safety system that all businesses need to focus on."

Workers have died after falling off a digger, after a log skidder rolled, and this week when a bulldozer rolled down a bank, she said.


"One dead following bulldozer crash in Taranaki"

A man has died following a bulldozer crash on Mokau Road, Mt Messenger in Taranaki.

The bulldozer is reported to have rolled down a bank in a forestry block at around 2pm.

WorkSafe have been notified, and Police are assisting at the remote scene.


More >>

Source: Stuff News

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Canada: Wood design for Chinese students

The 2nd Chinese University Timber Structure Design Competition Award Ceremony was held in Nanjing Tech University (NTU) on November 19th, 2017. This year the competition theme is to design a wood-frame natatorium (a building containing a swimming pool).

The competition aimed to recognize, encourage and promote excellent building designs using wood as a structural material and inspire more future talents such as university students and teachers.

At the beginning of the award ceremony, Mr Liu Weiqing, Vice-principal of Nanjing Tech University delivered opening remarks to welcome each team and all the judges participating in the competition and appreciated Canada Wood China for strong supports on the competition.

Professor He from Tongji University expressed her high expectations for students’ works and wood-frame construction’s future.

Following Professor He’s speech, Eric Wong, Managing Director of Canada Wood China stated that CW China was looking forward to seeing more students participating in and learning wood-frame construction. And the design competition provided a good platform for the future talents who would be the main intelligence to design with wood.

Canada Wood China, as a Canadian lumber promotion organisation, will keep supporting programs favouring wood construction and increase exports opportunities for Canadian lumber.

Image: First prize winner, designed by the Southeast University Team

More >>

Source: Canada Wood Today

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Customer feedback leads to longer reach

The new extended stick boom option applies to the 800MH-Series tracked harvesters.

Customer feedback has resulted in John Deere launching an extended boom stick that permits a longer reach option, enabling operators to minimize the number of cut trails. The longer reach will allow customers to be more efficient while meeting local regulations. With the extended boom, operators can harvest larger areas, reducing the frequency of required movement of the machine. This not only benefits the surrounding terrain, but also improves the efficiency of the machine.

The extended boom is designed for use with smaller attachments and can reach 9.9 meters (32.5 feet). Additionally, the extended option features a narrow boom tip, allowing the operator to reach past standing timber in thinning applications. This also helps operators minimise damage to the trees being harvested.

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Rubicon to sell Tenon shares

Shareholders have voted in favour of Rubicon's proposal to sell a 45 percent stake in Tenon Clearwood Partnership, a large clearwood sawmill and manufacturing operation in Taupo.

The US$14.9 million purchase price - including its share of the latest reduction in the company's net debt - fell towards the middle of the Grant Samuel range, which was US$13.2 million-to-US$17.8 million and 99.9 percent of the shares voted at today's special meeting in Christchurch were in favour, the forestry biotech firm said. The transaction is expected to close Jan. 31.

In December it said the proposed buyers are Dorset Management Corp and Libra Partners NZ LLC, who will each take 20 percent, with the existing owners of the Clearwood partnership taking the remaining 4.88 percent. Dorset is affiliated with Rubicon's biggest shareholder Knott Partners, which owns 28 percent of the company, while Libra is its second-biggest investor with an 18 percent stake.

The sale will allow it to make two deferred-settlement payments for ArborGen, totalling US$15 million and which will now be Rubicon's sole asset.

"We have great belief in the potential future upside in ArborGen," chair Stephen Kasnet said at the meeting. It will also put the company in a position to achieve significant cost savings, he said. Rubicon took full ownership of ArborGen in June, after buying out its partners for US$29 million.

"We believe that these three factors – the removal of any overhang in the stock price relating to uncertainty as to funding source of the deferred ArborGen acquisition and subordinated debt payments, simplifying Rubicon to be a pure-play on the ArborGen business, and the achievement of cost savings, will all be beneficial to building positive momentum in the RBC share price," he said prior to the vote.

ArborGen is a global leader in advanced forestry genetics and has a pre-eminent intellectually property position with a portfolio of advanced products that do not require regulatory approval, he said.

Rubicon's shares last traded at 23.5 cents and are down 9.6 percent over the past 12 months.

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... finally ... some wisdom for a New Year

  • Accept that some days you’re the pigeon, and some days you’re the statue.
  • Always keep your words soft and sweet, just in case you have to eat them.
  • Always read stuff that will make you look good if you die in the middle of it.

  • Drive carefully. It’s not only cars that can be recalled by their maker.
  • If you can’t be kind, at least have the decency to be vague.
  • If you lend someone $20 and never see that person again, it was probably worth it.

  • It may just be that your sole purpose in life is simply to be kind to others.
  • Never put both feet in your mouth at the same time, because then you won’t have a leg to stand on.
  • Nobody cares if you can’t dance well. Just get up and dance.

  • The early bird might get the worm but its the second mouse that gets the cheese.
  • When everything’s coming your way, you’re in the wrong lane.
  • Birthdays are good for you. The more you have, the longer you live.

  • You may be only one person in the world, but you may also be the world to one person.
  • A truly happy person is one who can enjoy the scenery on a detour.

To finish enjoy these thought provoking one-liners:

Life’s a journey not a race.
Rien n’est eternal (nothing lasts forever).
Life is short, smile while you still have teeth.
The secret to getting ahead is getting started.
Stop saying yes to stuff you know you shouldn't.
The mirror will only reflect the image you choose to see.
Holding onto anger is like drinking poison and expecting the other person to die.
One key to happiness is letting every situation be what it is, not what you want it to be.
A happy soul is the best shield for a cruel world.

… and finally …

Le temps passé (time flies).

That's all for this week's wood news.

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John Stulen
Innovatek Limited
PO Box 1230
Rotorua, New Zealand
Mob: +64 27 275 8011
Web: www.woodweek.com

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