WoodWeek – 30 May 2018

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Greetings from your WoodWeek news team. What do you want first – the good news or the bad news? The good news is ... its mostly all good news this week.

New Zealand producers shipped a record 1.975 million cubic metres of softwood logs overseas in March, up 22 per cent from both the February level and from March last year. AgriHQ says this beats the previous monthly record set in October last year and puts first quarter log exports 22 per cent above last year's levels.

Following a successful trial in 2017, FIEA are working with industry groups to run interactive safety workshops in both Rotorua and Melbourne either side of our one-day conferences. The formats in each venue differ slightly to suit the needs of our industry partners. Get onto the web now to register at early-bird rates by going to www.forestsafety.events.

In Rotorua FIEA has partnered with the Forest Industry Safety Council (FISC), for a half-day workshop running on the day after the FIEA one-day safety conference. The conference kicks off with a meet and greet evening session on 7 August at the Distinction Hotel in Rotorua. In Melbourne we’re working closely with three industry groups. The half-day WHS workshop for Australian contractors and forest managers will run on 14 August, the day before the FIEA one-day safety conference running on 15 August at the Bayview Eden Hotel.

Well, okay maybe just a bit of bad news: Merrill and Ring were fined and ordered to pay additional reparations by the Blenheim District Court for leaving woody debris in a stream bed after logging. Commenting on this reputational damage to our industry, NZFOA President Peter Weir says according to reports, logging residues were left on a flood plain after harvest in 2014. Sometime later the Council instructed Merrill and Ring, to move that debris but the direction was ignored.

Finally, winding up May as the month for forest industry awards around the country, last Friday saw an outstanding turnout by workers and managers alike from local forestry companies, contractors and transport operators from Otago and Southland for the Southern Wood Council Awards night. We've got all the winners complete with photos.

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Another new record for log exports

NZ log exports hit new monthly record in March - Further strength forecast BusinessDesk) - New Zealand exported a record volume of softwood logs in March, as shipments to most major markets increased, with further strength forecast through the rest of the year, according to AgriHQ, NZX's agricultural analysis business.

The country shipped a record 1.975 million cubic metres of softwood logs overseas in March, up 22 percent from both the February level and from March last year, AgriHQ said in its latest monthly forestry market report. That beat the previous monthly record set in October last year and puts first quarter log exports 22 percent above last year's levels.

All major destinations for New Zealand logs were up in March, except Japan due to timing issues, although Indian shipments had been volatile as regulators clamp down on the Indian banking system and South Korea was subdued due to a sluggish economy, the report said.

"A stellar March for exports of NZ softwood logs broke previous records," AgriHQ analyst Reece Brick said under a section of the report titled 'Only direction upwards'. "Expectations are for the strength in this market to continue throughout 2018, with demand expected to pick up from India in the second half of the year."

The latest gains come after New Zealand shipped a record 18.8 million cubic metres of softwood logs overseas last year, up 18 percent on 2016, with exports to China jumping 29 percent and accounting for three-quarters of the total. AgriHQ said exports to China continued to grow in March, up 20 percent on year-earlier levels and marking 14 straight months of gains. He noted China's log imports in March were "incredibly strong" this year as Chinese New Year celebrations, which typically lead to a slowdown, occurred in February.

"Any worries around a post-Chinese New Year log slump have been put to bed," Brick said. "In fact the past few weeks have been among the most encouraging in at least the past twelve months, arguably longer."

Log offtake levels at Chinese ports have rushed above previous record rates, with periods where more than 100,000 cubic metres a day has come off, with the average rate sitting around 90,000-95,000 cubic metres a day, he said. That has pulled port-level inventories down to 3.8-4.2 million cubic metres and it’s very likely these figures will be even lower by this time next month, he said.

The combination of higher in-market pricing and the falling value of the New Zealand dollar against the greenback had pushed log export returns further towards record territory, although rising shipping rates had held back values a little, Brick said.

The average price for New Zealand A-grade export logs over the past month had lifted to US$144/JAS from US$143/JAS, and was ahead of US$130/JAS a year ago, and US$113/JAS two years ago, according to AgriHQ's monthly survey of exporters, forest owners and saw millers.

Shipping rates were firmer through April and there were mixed views on where shipping rates will track with some saying elevated oil prices pointed towards a lift while others believed there was enough spare shipping capacity across the globe to keep a lid on rates in the medium term, Brick said.

In the domestic market, the price for S1 logs lifted to $134 a tonne from $133 a tonne last month, according to AgriHQ's survey.

"As a whole, it is still one of the strongest periods ever to be a log trader," Brick said. "Export markets continue to keep domestic mills on their toes, making them pay near to what can be achieved overseas or simply miss out on supplies."

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FIEA Forest Safety Conferences plus workshops

Following a successful trial in 2017 FIEA are working with industry groups to run interactive safety workshops in both Rotorua and Melbourne this year. The formats in each venue differ slightly to suit the needs of our industry partners.

In Rotorua FIEA has partnered with the Forest Industry Safety Council (FISC), for a half day workshop running on the day after the FIEA one-day safety conference. This event kicks off with a meet and greet evening session on 7 August at the Distinction Hotel in Rotorua.

In Melbourne FIEA is working closely with three groups. The WHS workshop for Australian contractors and forest managers will run half-day workshop, on 14 August, the day before the FIEA one-day safety conference running on 15 August at the Bayview Eden Hotel.

Register for both conferences and the workshops at www.forestsafety.events.

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Southern Wood Council achievers awarded

Last Friday saw an outstanding turnout by local forestry companies, contractors and transport operators from throughout the lower South Island of New Zealand. The function was the 2018 Southern Wood Council Forestry Awards.

The Council, representing all major forest owners and most of the major wood processing companies in Otago and Southland ran the 2018 Awards programme in conjunction with the country’s industry training organisation, Competenz.

In addition to profiling the contribution that forestry and those working within the industry are making to the economic and social well-being of the region, the night was really designed to celebrate the success of those that had achieved formal training qualifications over the year. Through a series of nine major awards, the event also recognised the forest industry’s top performers from across the lower South Island.

The industry certainly rallied on the night. Like the previous three years, over 300 forest managers, forestry contractors, transport operators and product and service suppliers to the industry from throughout the lower South Island attended the awards evening at Dunedin’s Forsyth Barr Stadium.

“The turnout by forestry workers, their families and supporters on the night is probably a true reflection on the momentum that’s been building over the last year or so with on-site training and safety in this region” says Grant Dodson, Chairman of the Southern Wood Council. “In addition to recognising the training achievements of forestry workers and crews that have really stood out over the past 12 months, the industry was able to come together at one place to celebrate the industry along with training and business success”.

“The message on the value of the awards evening has certainly found it’s mark with many companies bringing through all of their staff and workers, from Invercargill through to Timaru. This year we even had staff from a local West Coast mill along with workers from Stewart Island who had achieved training qualifications over the year come through to Dunedin to be recognised on the night.”

Presenters and speakers at this year’s awards evening include; Jamie MacKay, Host of NZ’s New Zealand’s flagship rural radio show, The Country and guest speaker Aaron Fleming, who provided a gripping, emotional and truly inspirational story to all those gathered. Aaron is a Sir Peter Blake Leader Award recipient, author of motivational book Purpose, multiple international Ironman athlete, New Zealand’s Olympic Games torchbearer, previous finalist for Young New Zealander of the Year and a television presenter – and he’s only in his early 30’s.

Around 120 National Training Certificates that had been achieved in Forestry & Wood Processing were awarded to top local contractors and forestry and wood processing employees. Six apprentices that started on a new regional training scheme this year were also recognised at the awards ceremony. All are anticipated to finish the course in October, with another group expected to start in June. In addition, nine major industry awards were presented to:

Training Excellence Award - Apprentice of the Year (Sponsored by Southern Wood Council) Award Winner; Nash Arthur-Jones, Ollerenshaw Logging

Training Excellence Award - Forestry Trainee of the Year (harvesting) (Sponsored by Rayonier/ Matariki Forests) Award Winner; Glen Paul, Cable Logging Geraldine

Training Excellence Award - Forestry Trainee of the Year (silviculture) (Sponsored by Dynes Transport): Award Winner; Ross Marshall. Otautau Contractors

Skilled Professionals Awards – Forestry Excellence Award (establishment, silviculture, fire, harvesting) (Sponsored by South Wood Export): Award Winner; Clint McIvor, Bluewood Logging

Skilled Professionals Awards – Wood Processing Excellence Award (Sponsored by UDC): Award Winner; Corey Bradley, Pan Pac Forest Products (Otago)

Skilled Professionals Awards – Forest Products/Logistics/Transport/Port Award (Sponsored by Oil Imports): Award Winner; Mark Cardno, C3

Industry Excellence Awards – Forestry Environmental Management Excellence Award (Sponsored by Otago Regional Council): Award Winner; Tony Livingston, Ernslaw One

Industry Excellence Awards - Training Company/Contractor of the Year (Sponsored by City Forests): Award Winner; Mike Hurring Logging

Industry Excellence Awards - Forest Products Health & Safety Award (Sponsored by Ernslaw One): Award Winner; C3

FISC Certificates – Otago Southland. Five certificates for Professional Tree Faller Certification, a scheme that has been implemented in the Otago/Southland region were also awarded.

Congratulations go to all the winners, the nominees, their employers and families. This year’s awards programme with strong support from the wider industry, supporting organisation’s and major equipment and product suppliers has again been another important milestone for the forestry industry in the lower South Island. Like other Regional Wood Council awards evenings, it’s firmly established as the major fixture each year on the local forestry calendar.

Forestry Excellence Award winner - Forestry Trainee of the Year (harvesting): Glen Paul, Cable Logging Geraldine (winner) , Mark Grover, Regional Manager, Rayonier Matariki Forests (Sponsor)

Wood Processing Excellence Award: Corey Bradley, Pan Pac Forest Products Otago (winner) , Matt Moore, Commercial Manager, UDC (Sponsor)

Forest Products Transport Logistics Award, Mark Cardno, C3 (winner) Anthony Henderson, Regional Manager, Oil Imports (Sponsor)

A collection of photos taken during the night can be viewed on the SWC website, www.southernwoodcouncil.co.nz.

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Out now: New Forest Products Map

Every two years we find an eager audience for our updated Australasian Forest Products Industry Map. The good news is that our 2018 map has just been released.

Its the third edition of a full colour 980mm x 680mm wall chart. Produced by our FIEA team, it includes details of all the major wood manufacturing plants in both countries.

In total there are 186 wood processing operations including over 70 sawmills (with sawn timber production levels), all fibreboard, particleboard, plywood, pulp & paper, veneer/LVL/CLT, paperboard and chip export operations along with major wood manufacturing operations.

Since the last edition we've noted over 50 major updates to mill locations, ownership and production. The new map is now the most up-to-date industry reference providing an essential mapping resource for New Zealand and Australian forest products companies.

To get a copy, place your order on the FIEA website (www.fiea.org.nz) or by clicking here.

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Top scholars rewarded by IFS Growth

Growing the future of forestry: Top scholars rewarded - Winners of the inaugural IFS Growth Tertiary Scholarship awards have been announced for 2018. This prestigious scholarship initiative was established by forest management company IFS Growth, to support exemplar students, in pursuit of a qualification for the forestry industry. The award provides a powerful kick-start into the world of forestry with cash towards course tuition fees, work experience opportunities and entry into the company’s graduate career programme.

CEO of IFS Growth James Treadwell is excited about the caliber of the successful applicants this year. They have been put through a rigorous selection process. The scholarship criteria include academic excellence, and the ability to demonstrate a strong affinity and passion for the forestry industry.

“We look for those dedicated students, who are motivated to succeed long-term, within the forestry industry. Forestry offers a great range of rewarding jobs for graduates interested in areas such as sustainability, R and D, innovation, the environment, management, as well as traditional forest floor logistics.

We’ve seen an increase in capability and diversity in the scholarship applicants which bodes well for the industry’s future. IFS Growth is an adaptable and forward- thinking forestry business. We think these students are a perfect fit with our approach,” confirms Treadwell.

Three clear scholarship winners have been selected from a strong field this year: Rhys Black, Grace Marshall and Dan Montgomery. All are currently students of University of Canterbury’s School of Forestry. They will each receive $5000 per annum towards their university course fees and gain a place in the IFS Growth’s graduate scheme.

The future looks bright for these foresters of the future, and for the industry they are headed towards serving.

Photos: Rhys Black, Grace Marshall and Dan Montgomery respectively.

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Industry reputation damaged by neglect

Forest industry reputation damaged by mobilisation of forest harvest residues. The successful prosecution of a forest management company by the Marlborough District Council has been endorsed by the Forest Owners Association.

Merrill and Ring has been fined $39,000 and ordered to pay an additional $20,000 in reparations by the Blenheim District Court for leaving woody debris in a stream bed after logging.

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Manuka offer huge success

Free manuka seedling offer nearly 200 percent oversubscribed

The offer of 1.8 million free manuka seedlings by Te Uru Rakau (Forestry New Zealand) in partnership with Manuka Farming New Zealand has proved hugely popular with applications totaling 5.2 million seedlings.

Manuka Farming New Zealand (MFNZ) General Manager Stephen Lee says they were overwhelmed by the huge interest for the seedlings. The initiative contributes to the Government’s One Billion Trees Programme.

“We had 1.8 million manuka trees available, which would cover about 1,635 hectares in plantings across New Zealand. Within a week we had 70 applications, totaling 3.6 million seedlings, and covering around 2,841 hectares.

“We now have a big huge task ahead of assessing potential plantations from Northland to Te Anau.”

Mr Lee said the first step is to assess the applications, followed by a series of site assessments to those selected based on size, suitability for planting, and availability of suitable manuka stock for that location.

Te Uru Rakau has contracted MFNZ to assess the suitability of sites for manuka to be planted this winter, and to organise the delivery of seedlings to landowners. MFNZ can also help landowners in the establishment of their manuka plantations.

Although there was no maximum limit on the size of potential plantation sites, ideally larger sites are more suitable as they produce higher quality manuka honey. The largest land parcel application was 480 hectares with the smallest at 0.5 hectares.

Mr Lee said a condition of the offer is landowners must be ready and committed to planting the manuka seedlings in 2018.

“Ideally the land is already free of weeds and pests as this will enable planting to take place between July and September,” Mr Lee said.

Although the seedlings are free, landowners are required to cover the costs of packing and dispatching the seedlings from the nursery, site preparation, including pest and weed control, fencing if required, planting costs and ongoing post-plant monitoring.

“MFNZ will be available to provide wrap-around services, including advice, co- ordination and management of planting to ensure greater growing success,” Mr Lee said.

“We have a large range of developed, tested and trialed high performance manuka varieties designed and tailored for specific regions, as well as eco-sourced varieties suitable for planting at or near their source.”

Mr Lee said the final decisions on which landowners will be offered manuka will take a couple of weeks.

Those that miss out will get the opportunity to purchase high grade manuka seedlings for planting in 2019. The sale season for orders is now open and closes at the end of August.

Landowners not participating in this initiative can apply for funding through MPI programmes such as the Erosion Control Funding Programme.

MFNZ will also work with relevant councils and government agencies to help facilitate investment that could be available to landowners for planting.

Julie Collins, Head of Te Uru Rakau, says the offer 1.8 million manuka seedlings has been a huge success in identifying new plantation potential across New Zealand.

“We are thrilled with the strong interest by landowners keen to plant manuka,” says Ms Collins.

“We now want to ensure we all get the very best possible outcomes, by ensuring the right manuka seedlings are matched to the land. MFNZ has experience and expertise in this area.”

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Otago making positive shift to wood fuels

Bioenergy industry leader says Otago is well placed to transition from using coal for heating - Association Executive Officer Brian Cox says that a recent study undertaken for the Otago Mayoral Forum shows that around 70 MW of heating plant currently using coal could transition to using wood fuel. This could be at around 50 schools and 26 larger heating plant at the hospital, dairy and meat processors and other heat users.

“The region already has a lot of wood fuel being used but the opportunity to fully replace coal for process heat will provide an opportunity for forest owners and farmers to get additional revenue by providing forest harvest residues to these new heat facilities. Increasing the amount of wood fuel produced and used will also create new employment and improve the resilience of some rural communities.”

“Farmers currently produce food, wood and wool fibre. The increased demand for wood fuel will provide an opportunity for them to be food + wood + wool + energy fuel producers. Having an additional revenue stream from their farm will improve their business resilience.”

The study has recommended that Otago work with Southland and extend the Wood Energy South Projects which has already assisted around 19 heat plant owners to transition to wood fuel. A workshop will be held next week in Dunedin to bring together the potential heat plant owners, fuel suppliers and the region’s council staff to identify how they can work together to realise the opportunity to get away from coal.

Lloyd McGinty, the author of the report and a Dunedin wood energy expert said that “ He wasn’t surprised at how much coal could be replaced by wood fuel as Otago already has a large number of heating plant using wood fuel. He recognised that there is a lot of wood residues available as a fuel. What the study showed was the importance of leadership to make it happen and he was pleased that the Mayoral Forum had taken up this leadership role.”

Mr Cox said that “to achieve the transition from coal to wood fuel for process heating as quick as possible will require all the people involved to work collaboratively and to partner fuel buyers and sellers. If we sit around talking about it the pace of transition will be slow. However by working together we can bring the transition about much faster. The technology is proven, the wood residues are available and the region already has enough role models on which to build this transition. We just need to roll up our sleeves and do it.”

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First look at newest timber tower

First look inside world’s tallest timber tower

On Monday, leading property and infrastructure company, Lendlease, provided a first glimpse inside the world’s tallest and largest engineered timber office building, 25 King, at Brisbane Showgrounds.

The first of its kind in the Australian property market, 25 King includes extensive use of innovative and sustainable building materials glue laminated timber structural beams and columns and cross laminated timber (CLT) floors as well as state of the art technology to deliver a true workplace of the future.

And with six of 25 King’s nine levels completed in less than 12 months, the building is testament to the benefits of construction using engineered timber. 25 King is Lendlease’s fifth engineered timber building in Australia and one of several timber projects the company currently has underway across the country.

Coinciding with Monday’s preview of 25 King, the building’s owner, ethical investment company, Impact Investment Group (IIG), will release new details of a co-investment opportunity for the building.

More >>

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... almost finally ... A note for baby boomers

Here in New Zealand young people alarmed at the outrageous cost of housing sometimes accuse baby boomers of having had it all too easy and being part of the problem and the increased demand driving prices to record levels.

Looking at the chart below is quite sobering as baby boomers, especially those who borrowed to buy the family home during the 1980's (ie - probably half of the boomer population) have lived and borrowed through the highest recorded levels of mortgage interest rates.

Yes, the graph is about 10-year Treasury yields in the US but there is a strong correlation to retail mortgage rates.

Click the image to enlarge

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... and finally ... time for a laugh

From a reader:
Presently, I am trying to make friends outside of Facebook while applying the same principles.

Therefore every day, I go down on the street and tell the passer by what I have eaten, how I feel, what I have done the night before, and what I will do after, I give them pictures of my wife, my daughter, my dog and me gardening and spending time in my pool.

I also listen to their conversations and I tell them I love them.

And it works:
I already have 3 persons following me; 2 police officers and a psychiatrist


First drafts of famous movie quotes

The Godfather: "I'm gonna make him an offer he can't refuse. Well, he can refuse it, of course. I just know that if someone were to make me an offer like this, I'd jump all over it. But who am I to impose my feelings on someone else?"

The Terminator: "I'll be back. Do you need anything while I'm out?"

Dirty Harry: "You've got to ask yourself one question: Do I feel lucky? I ask myself that every day, and you know what? I feel so very lucky. Loving family, steady work..."

Taxi Driver: "You talkin' to me? You talkin' to me? You talkin' to me? Sorry, it looked like you were talkin' to me. My mistake."

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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