WoodWeek – 29 August 2018

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Greetings from your WoodWeek news team. Lots of positive news for forestry this week. Somehow, we get energised when our industry leaders get support from our politicians for a change. On that note, on the east coast the local forest industry is another step closer to a more sustainable flow of trained workers with the imminent start of the Generation Programme. Eastland Wood Council chief executive Kim Holland says the programme is a real collaboration between the region’s key stakeholders that ensures trainees are qualified through a real world introduction to the different sectors within the industry.

Our monthly export report shows continued strength with China showing total log export value gains for both year-on-year to end of July and month-on-month. On the other hand, while log export value to India is up 31 percent month-on-month it is down 16 percent year-on-year. Overall, log export growth was also reflected in the annual results for the Port of Tauranga. Log volumes increase 14.3% to 6.3 million tonnes for their financial year results reported this week.

In another boost for market growth and diversification, Innovatek ran another sold-out conference this week for the building design and construction sector. Our "Changing Perceptions of Engineered Wood for Commercial Construction" conference drew a diverse audience of architects, engineers, quantity surveyors, specifiers and manufacturers. For the first time in 3 years, the entire conference programme was focused on case studies of engineered wood buildings by New Zealanders, for New Zealanders. We also featured an engineering consultancy that is growing its client base in North America with its unique engineering skill set for seismic design for tall wood buildings. From the tone of conversations we noted at this conference, there is almost certainly set to be a step change in demand for wood in commercial buildings.

We’ve also got a bit of a blast from the past (for most of us) with a resurgence of wood is good energy stories this week. New information from Scion explains the role of planted forests in the plant-driven carbon cycle where carbon dioxide is absorbed during growth, released by decay or burning, then reabsorbed by new generations of plants. Bioenergy production using wood from locally grown and sustainably managed forests can provide one of the lowest carbon energy options for New Zealand.

Not that any of us forgot that wood is good, as leading project managers in the commercial building are finding through CLT and LVL and other highly accurate engineered wood components. It’s just that between engineered wood consumption, on top of China and India’s appetite for logs from New Zealand, and matched by demand from local sawmills meeting timber framing demand for housing, we tend to leave wood for energy to the specialists in areas where it has had plenty of human energy focused on it – like in the deep south. Maybe it’s a sign that if more people across the forest industries focused on wood for energy, then it would happen in more places.

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Log Export Statistics Update

Log export market graphics - This week we've got our monthly update from the good folks at Champion Freight. The chart shows total log export values to China to the end of July are up 32 percent year-on-year contributing to overall log exports growing 26 percent across all markets. To the end of July, China shipments month-on-month are up 15 percent and overall log exports up 41 percent.

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Wood Council launches forestry basecamp

New Programme a ‘Win-Win’ For All – Thanks to the Eastland Wood Council the local forest industry is another step closer to a more sustainable flow of trained workers with the launch of the Generation Programme.

Siobhain Fyall has been appointed programme manager and the first course is set to start on October 15, with another following in late April 2019. Participants will spent six weeks at a forestry base camp industry introduction programme followed by ‘learn while you earn’ work out with contractors complemented with part time courses through EIT Tairawhiti, Turanga Ararau and Competenz. All the while students would receive pastoral care from First Choice Employment.

The new programme is set to produce 12 graduates in the first year, 30 in the second and 60 in the third.

Eastland Wood Council chief executive Kim Holland says the programme is a real collaboration between the region’s key stakeholders that ensures trainees are qualified through a real world introduction to the different sectors within the industry.

“It’s a multi-stakeholder approach with industry and training providers working together to ensure that the training meets industry’s skills needs,” says Ms Holland. “We all want to make sure the programme succeeds and I believe by doing this it will better prepare the young people and increase the uptake by contractors as they will have more confidence in the abilities of the young people to do the work.”

The programme was launched in April with a $220,000 boost as the first initiative to benefit through the Government’s He Poutama Rangatahi Employment Scheme and the Ministry of Social Development.

Base camp trainees will work towards a New Zealand Certificate in Foundation Forestry Skills Level 2, which will then pathway into level 3 qualifications, with on the job training pathways across forestry and harvesting options. Very early on, trainees will get an industry introduction to careers with the ability to talk to people who are working in forestry.

“The base camp will ensure the trainees have the general requirements, including health and safety, site visits, practical skills learning and talking to people in the industry who are keen to share their passion for the work they do.”

Click here to read the media release

Source: Eastland Wood Council

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Call for speakers: HarvestTECHX

CALL FOR SPEAKERS for HarvestTECHX 2019 Conference in Vancouver - The conference team from Innovatek, Logging & Sawmilling Journal and TimberWest are pleased to announce their newest industry conference for leading loggers and forest managers for 2019.

Formerly called the Steep Slope Logging Conference, the new name – HarvestTECHX – covers all machined based forestry and logging operations for west coast operations in North America. The conference theme for 2019 is “Smarter Logging Automation & Technologies”.

Our HarvestTECHX 2019 conference is scheduled for March 12-13th, 2019 at the Sheraton Vancouver Airport Hotel in Richmond, Vancouver, Canada. This conference will be highlighting how automation and technology are advancing operational safety and productivity and for operators, contractors and foresters in North America’s forest industry.

We are working closely with international technology leaders, logging contractors, service providers, researchers and industry and government agencies to develop a strong and innovative programme.

If you are keen to be a speaker at our conference and you are an early adopter, developer, innovator, contractor, technology supplier, service provider or researcher within the forestry sector, we’d like to hear from you.

This upcoming HarvestTECHX conference includes sessions on:
  • Keynote presentations on key paradigm shifts to logging and forestry technologies
  • Experts detailing key developments, technologies, issues and new opportunities impacting the sector. This will include a full line- up of award winning technologies, innovative new platforms, exciting applications and early adopters.
  • Technology startup entrepreneurs discussing how best to connect and collaborate with early adopters and other operators.
  • Case studies by passionate early adopters highlight how they have integrated technology in their business.
  • A panel of young leading loggers to outline what they would like to see next in technology and future equipment trends.
  • Short, sharp updates on commercial services and innovative products for loggers and forest managers.

Interested speakers or sponsors should contact our team by Friday 14 September:
Anthony Robinson, Logging & Sawmilling Journal, [email protected] or +1 (604) 990-9970
John Stulen,Innovatek, [email protected] or +64 7 921 1382.

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OIO law: Forestry update

Overseas Investment Amendment Bill – forestry update - On15 August, the Overseas Investment Amendment Bill (Amendment Bill) was passed by Parliament. The new laws are expected to come into force by mid-October 2018.

As well as bringing “residential land” within the Overseas Investment Act, the Amendment Bill brings in changes for the forestry and horticulture sectors, and enhances the enforcement and information gathering powers of the Overseas Investment Office (OIO).

A general overview of the new residential land provisions is contained in our separate update: New OIO laws bring changes for residential land, forestry and horticulture. This update contains more detail on how the changes will impact on the forestry sector.

The Amendment Bill introduces three key changes for forestry investors:

1. Forestry rights, which were previously not captured by the Overseas Investment Act, have been brought into the OIO regime by removing the general exclusion for profits à prendre (rights to take).

The acquisition of forestry rights will not require OIO consent where the total area covered by forestry rights acquired in any calendar year (including acquisitions by related parties) is less than 1,000 hectares. This calculation excludes any forestry rights held before the new laws come into force.

2. All forestry investors can take advantage of two new tests, where the land “will be or is likely to be used exclusively or nearly exclusively, for forestry activities” (maintaining, harvesting or establishing a crop of trees) and there is a commitment to replant following harvest:
    a. A new “counterfactual” test that only requires the OIO to compare the proposed use against the current use (not what an alternate investor might do); and

    b. A new “benefit to New Zealand test”– the details of this new test will be set out in Regulations. Initial draft Regulations indicate this test could be met provided that any existing arrangements for supply of logs to New Zealand processors are continued, any existing environmental protections are maintained, and there is a commitment to replanting (this requirement can be waived in some circumstances). The overseas person would not be required to show any “added benefit” resulting directly from their investment.

These tests can be used regardless of the nature of the forestry investment (e.g. bare land purchase, purchase of existing forest, lease, forestry right, or investment in a forestry business). If the relevant land includes any existing homes on residential titles, those homes can either be retained for staff accommodation or removed for the purposes of the forestry business.

Now that it has been extended to cover all types of forestry investments, the new “benefit to New Zealand” is likely to be the most widely used. The new counterfactual test will provide an alternate option where all the requirements of the new benefit to New Zealand test cannot be satisfied (e.g. there are environmental protections that need to be modified for the forestry investment).

3. Forestry investors relying on the new “benefit to New Zealand” test can apply for “standing consents” that do not relate to a specific parcel of land. Investors can then make investments in reliance on that standing consent without requiring further OIO approval, allowing them to remain competitive in the market when making new land acquisitions.

Transitional provisions - Although most provisions of the Amendment Bill will not apply to contracts entered before the new laws come into force, overseas persons can take advantage of the new forestry tests immediately, even where the contract is already in place.

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Source: Duncan Cotterill

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Murray River: Forester/logger partnership

Murray River Forests Announces Long-term Partnership with Tumbarumba- based Bergin’s Logging – Murray River Forests and Bergin’s Logging Pty Ltd have joined forces to improve stability and efficiency in the harvest and transport of nearly half a million tonnes of radiata pine.

Bergin’s Logging Pty Ltd, a family-owned and operated business based in Tumbarumba, have been providing services to the forest industry for more than 20 years. They were recently awarded the contract for the harvest and haulage of 120,000 tonnes per year from Murray River Forests, for the next four years, supplying saw logs to Hyne and Sons and pulp logs to Norske Skog pulp mill.

Murray River Forests is a 4,900-hectare pine estate located throughout the Murray region and is owned by an investment fund managed by Sydney-based New Forests. Local forest management services are provided by PF Olsen Australia. Under the ownership of New Forests’ fund and management by PF Olsen Australia, Murray River Forests is certified for responsible forest management.

Robert Bergin, Operations Manager for Bergin’s Logging, said, “We are very pleased to get the contract for the harvesting and haulage of the Murray River Forests. This has given us the security and confidence to buy some new gear, which will support our operations over the coming years.”

Since being awarded the new multi-year contract, Bergin’s have purchased two pieces of harvest equipment – a harvester (Komatsu XT460L) and a forwarder (Komatsu 895), with a combined value of around AUD 1.7 million. They have also purchased two new truck and trailer combinations to update their existing fleet.

PF Olsen Australia’s National Operations Manager, Martin Crevatin, noted that it is a good outcome to lock in rates for the next four years, as well as simplify operations by having a single contractor undertake both the harvesting and haulage. Having a longer-term contract also offers security both to the contractor and to the customers that rely on the forest products.

“PF Olsen Australia look forward to working closely with the team at Bergin’s Logging. It is also pleasing to hear that Bergin’s, a reputable, stable, local business, are starting to receive enquiries from local young people wanting to work for them. That’s a positive sign for our industry in this region.”

New Forests’ Operations Director, Matthew Crapp, says the contract aligns with New Forests’ efforts to support and strengthen local industry and supply chains in the areas in which the firm invests.

“New Forests’ investment strategies bring a strong focus on ensuring operations are environmentally and socially beneficial,” explained Mr Crapp. “We’re always looking at how we can support environmental, social and development outcomes – and this multi-year contract is a perfect example of how we like to cooperatively work with local contractors to improve job opportunities and regional growth.”

New Forests is one of the world’s largest forestry investment managers and has been headquartered and operating in Australia since 2005. The firm currently manages more than AUD 4.5 billion in assets under management across more than 940,000 hectares in Australia, New Zealand, Southeast Asia, and the United States.

Other initiatives underway on the Murray River Forests estate include work to enhance the viability of threatened native fish in the Upper Murray region, in partnership with Local Land Services (LLS).

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China: Proposed tariffs on US wood exports

Proposed Chinese Tariffs: Potential impacts for the Pacific North West forest industry - On August 8, China's Commerce Ministry released a preliminary list of proposed tariffs on $16 billion in US goods, which came just a day after the US Trade Representative's office released a finalized list of $16 billion in Chinese goods that will be hit with tariffs.

The tariffs are scheduled to be activated on August 23, the Chinese ministry clarified, which is the same day that the US plans to begin collecting an additional 25 percent in tariffs on $16 billion in Chinese goods.

The list identified duties range from 5 to 25 percent on 5,207 US imports that include a number of wood products such as softwood and hardwood logs, veneer and lumber, chips, pellets, MDF, OSB, wood pulp, paper and other processed and unprocessed wood materials.

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Source: Forest2Market

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Port of Tauranga annual results gain

Cargo Growth Produces Record Year for Port of Tauranga – Port of Tauranga’s hub port strategy is gaining momentum, with growing cargo volumes and increased transhipment driving record results in the year to 30 June 2018.

New Zealand’s largest, fastest growing and most productive port saw container volumes increase 8.9% to nearly 1.2 million TEUs1, while overall cargo volumes increased 10.2% to almost 24.5 million tonnes.


> Log volumes increase 14.3% to 6.3 million tonnes
> Annual container throughput increases 8.9% to almost 1.2 million TEUs
> Transhipment increases 23.3%, making up a quarter of all container traffic
> Exports increase 8.2% to 15.4 million tonnes, while imports grow 13.7% to 9 million tonnes
> Group Net Profit After Tax increases 13.0% to $94.3 million
> Subsidiary and Associate earnings increase 11.9% to $16.4 million
> Annual revenue increases 10.9% to $283.7 million

See Annual Report media release attached.

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Canada: Industry claims climate high ground

Canadian Forestry Sector: A Success Story in Clean Tech – The Canadian forestry sector has become a leader in clean energy and clean tech, both in industry and communities it serves. The industry has already met the 2016 Paris Agreement target of reducing GHG emissions to 30 per cent below 2005 levels by 2030. Derek Nighbor, head of the Canadian Forest Products Association, tells a Canadian success story: For more than three decades, the Canadian forest products sector has been a leader in the innovation, development, and utilization of clean technologies—and in doing so, has positioned itself at the forefront of energy change that benefits the environment and the economy.

The pulp and paper sector began showing signs of success in reducing greenhouse gases (GHGs) in the 1990s. Throughout the 2000s, some 30 facilities across the country were upgrading their energy systems to produce green electricity from biomass.

Today, enough electricity is produced across the Canadian forest products sector to power the city of Vancouver for an entire year. Over the course of this transformation, the sector has cut its GHGs by approximately 67 per cent.

The industry has continued to gain momentum by advancing its clean energy agenda with a total investment of more than $2 billion in innovation development.

More >>

Source: Canadian Forest Products Association

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... almost finally ... innovation and history

... are not mutually exclusive. Innovation has always been around, it's not something that happened since the first mobile phone or electric car. Here is a fine example, in this case, of a double-engine car, from over 70 years ago.

Caption: Olly Smith built quite a few snappy-looking rail tractors in his time, but this double-ender gets the prize for being the most noticeable. Its construction started in 1947 with the Whakatane Board Mills contract as his goal, but when the opportunity was lost, it was not completed until 1952 when it became Gamman’s mill shunter, taking sawn timber rakes to the Mamaku station. Chevrolet engines were installed at both ends, but only one could be used at a time for moving in either direction, driving all twelve wheels. It was also used on tram construction and even on log trains as a backup. Seen here in 1961, it was last used in 1971 to pull up Gamman’s train.
(Credit: PJ Dillicar)

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... and finally ... help us out here

Got any nice new jokes? We'd like to hear from you ... please!

In the meantime here's something to make you laugh:

A blonde goes into a store and sees a shiny object on the shelf.
The blonde asks the clerk, "What is that shiny object?"
The clerk replies, "That is a thermos."
The blonde then asks, "What does it do?"
The clerk responds, "It keeps hot things hot and it keeps cold things cold."
The blonde says, "Oh! I could use something like that!! I'll take it!"

The next day, as she walks into work with the new thermos, spots the boss and shows off the shiny new thermos, "I just got this yesterday, isn't it wonderful! It's a thermos and it keeps hot things hot and cold things cold!"
The boss asks, "And what do you have in it?"
The blonde replies, "Some coffee and an iceblock."

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

John Stulen

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