WoodWeek – 24 July 2019

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Greetings from your WoodWeek news team. This week we have a rebuttal from Julie Collins, director of Te Uru Rakau to last week’s negative commentary on their tree-planting plans. Over in Napier, logs, wood pulp and timber accounted for 74 percent of the port’s export tonnage last year. In today’s news a commentator says while a rail hub may shift some of that volume onto rail, he doubted it would materially add to the firm’s log volume.

Also a reminder to get in quick to register for our workshops running in conjunction with ForestTECH in Melbourne and Rotorua in November. These workshops will sell out, so register for the conference and choose your workshop now so you won’t miss out. We outlined in a previous issue of Friday Offcuts what’s happening with the four workshops. Further details are now on the event website. They can be viewed here.

Meanwhile, the hard-working trainers at Toi Ohomai are celebrating their first road transport cadetship graduate – a woman aged 19. Dayna Callender can handle a truck-and-trailer unit like a boss. The 19-year-old Mount Maunganui woman is the first student in the region to complete the Bay of Plenty Transport Industry cadetship at Toi Ohomai Institute of Technology.

Finally, we have an update for forest managers and loggers today. MBIE are now consulting on some important regulation changes. Some of their key proposals have the potential to affect forestry including operator protection, high risk plant and working at heights.

MBIE have released a discussion document for consultation. They are now seeking sector views on proposals to introduce regulation which will replace components of the H&S in Employment Regs (1995) and Pressure Equipment, Cranes and Passenger Ropeways (PECPR) Regulations.

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Julie Collins: Taking on Anne Salmond

Taking on Anne Salmond over forests - The Government's forestry agency wants to challenge several claims made in Dame Anne Salmond's commentary in Newsroom last week, ‘Billion Trees policy being rorted’. Here, Julie Collins, the head of Te Uru Rakau / Forestry New Zealand sets out its case. Below, Dame Anne defends her assertions.

We appreciate Dame Anne Salmond's continuing support for the contribution indigenous forests can make to New Zealand’s longer-term climate change mitigation, and the valuable perspective she provides. However, the piece published in Newsroom includes some statements we would like to correct, based on the scientific evidence available.

The author says the Emissions Trading Scheme (ETS) currently pays “much higher prices for carbon sequestered by Pinus radiata plantations than by natural forests”.

This statement is incorrect. There isn’t a ‘higher price’ paid for exotic forest versus native forest carbon. The ETS issues ‘New Zealand Units’ (NZUs) for forests to reflect the rate at which they sequester carbon. One NZU issued to a forest represents one tonne of carbon dioxide removed from the atmosphere, no matter the tree species.

Research shows native forest will, in the longer term, store more carbon if left unharvested – compared with a typical pine forest harvested about once every 28 years. But exotic forests generally grow faster than native forests, and therefore sequester carbon at a higher rate, helping most in the short to medium term.

Nationally, New Zealand’s exotic forests store about 900 tonnes of carbon dioxide over 28 years, whereas on average it takes the species in our long-lived indigenous forests some 200 years to store a similar amount. For the exotic forests, the annual rate of carbon dioxide storage is about 32 tonnes per hectare, while for indigenous species it is about five tonnes per hectare. Although most exotic forest will be harvested, it usually gets replanted, so on average stores about 500 tonnes of carbon dioxide. Planted indigenous forest should begin to overtake this beyond about 100 years.

To maximise carbon sequestration over the next 30 years, we need a mix of both exotic and indigenous forest. This is a useful way to balance both the needs to rapidly reduce net emissions in the short to medium term, and maximise carbon sequestration over the long term.

The ETS will soon introduce a new forest category: permanent post-1989 forest. Past sales of NZUs from indigenous forests indicate purchasers are likely to pay a premium for carbon stored by these forests.

This dispels any claims in Salmond's op-ed that New Zealand is heading in an opposite direction to many other countries by not exploring viable alternatives to exotic plantation forests, and the perceived absence of advertised climate benefits.

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Source: Newsroom

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Rail hubs may not lift Napier volumes

KiwiRail’s proposed freight hub at Dannevirke may extend Napier Port’s log catchment further south, but is more likely to put existing trucked freight onto rail, port chief executive Todd Dawson says.

Logs, wood pulp and timber accounted for 74 percent of the port’s export tonnage last year. The firm moved a record 2.2 million tonnes of logs in the September 2018 year and is picking that to climb 13 percent to about 2.5 million tonnes in the current year and in the 2020 financial year – reflecting the region’s projected harvest profile.

Dawson told journalists this week that the bulk of the port’s cargo travels less than 100 kilometres and trucking accounts for the vast bulk of those deliveries. The port receives a daily log train – typically 18 wagons – from Whanganui. Whether rail can grab a bigger share of the North Island log trade will depend on KiwiRail’s ability to compete with truckers, he said.

KiwiRail – through its government owner – is investing heavily to improve regional freight services and take more bulk cargo off the roads.

Last month it said a proposed rail-hub south-west of Dannevirke may be able to take 200,000 tonnes off roads a year. Forests in the area are already sending more than 50,000 tonnes of logs to Napier Port annually by road and those volumes are forecast to increase.

Earlier this year, KiwiRail restored the Napier-Wairoa rail link and is now establishing a log hub in the northern centre. Dawson said the firm already sources a lot of logs from Wairoa, about 120 kilometres by road north of Napier. While a hub may shift some of that volume onto rail, he doubted it would materially add to the firm’s log volume.

Napier Port is offering the public 90 million shares in the firm – 45 percent of the business – in order to raise extra capital to fund its expansion. It has indicated a price range of $2.27 to $2.60 for the shares – a price to per-share earnings ratio of 22.7 to 26-times for the 2020 year.

That compares with a forward PE of 23-times for the NZX50 overall, and 39-times for both Port of Tauranga and South Port. Investors buying other major utilities like Auckland International Airport, Contact Energy and Meridian Energy are paying about 43-, 33- and 45-times forecast 2020 earnings respectively.

"The Napier price is reasonably fair. They'll have no trouble given the demand we've seen,” said Grant Davies, an investment advisor at Hamilton Hindin Greene, "It's not as high a ratio as Port of Tauranga but it doesn't have the same growth opportunity. They're understandably not going to get priced that high."

Annual forestry planting in Hawke’s Bay peaked at close to 10,000 hectares in 1996 but was back to half that by 2000.

Napier Port’s offer document says pine is typically harvested at 25 to 30 years and that represents an opportunity for the company during the next five to 10 years. But it also notes that the increased volumes seen in recent years will reduce in line with the expected harvest profile after about five years. While logs dominate Napier's tonnage, its container trade generates 63 percent of its revenue. The port, already the country’s fourth-largest container terminal, is picking increases in container volumes of 1.2 percent for the current year and the September 2020 year. Pre-agreed tariff increases will help offset reduced ship visits – due to a change in shipping schedules – and an expected decline in volumes handled by the firm’s container packing facility.

Imported bulk goods are expected to decline this year and next, reflecting lower volumes of fertiliser and fuel.

Source: BusinessDesk

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First logistics cadet is a young woman

Toi Ohomai's first road transport cadetship graduate is a woman aged 19 - Dayna Callender can handle a truck-and-trailer unit like a boss. The 19-year-old Mount Maunganui woman is the first student in the region to complete the Bay of Plenty Transport Industry cadetship at Toi Ohomai Institute of Technology.

"None of my family drive, but I've always loved trucks and looked at them and wanted to drive them. The size, the looks, the different styles, and what they can carry – it all appeals.

"Plus, I like being in control of the vehicle and also seeing new places and new people."

Although she will graduate later this year, she wasted no time in finding work and currently works for Priority Logistics, where she drives Class 5 trucks.

Before enrolling at Toi Ohomai, Callender was a student at Mount Maunganui College and like many school leavers, was unsure about what she wanted to do when she finished school.

She decided to sign up for the student-for-a-day initiative after Toi Ohomai staff visited her school.

"I've always loved trucks and after I did the student-for-a-day where I went to the course and joined in with the class, I realised I loved it, so I just carried on from there," she said.

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RDO will bring swing machines

John Deere Construction and Forestry Equipment customers now have access to an expanded range, a dedicated Australian parts hub and an all-new forestry fleet management software system, according to Mark Kuhn, general manager sales for RDO Equipment Australia.

RDO is the new John Deere Construction and Forestry dealer for all states, except Western Australia.

Mr Kuhn said John Deere’s TimberManager and TimberMaps fleet software would be best in class, allowing for simple mapping of production data over several logging sites for cut-to-length and tree-length operations.

“The program is already available for wheeled and tracked harvesters and forwarders and will be rolled out across the rest of the John Deere forestry equipment range over the foreseeable future,” he said.

RDO will sell John Deere’s full construction and forestry range, including swing machines which have been absent from the Australian market for the past few years.

“The range of John Deere G Series swing machine, which will come to Australia for the first time, will deliver everything customers expect from John Deere forestry equipment — uptime, reliability, fuel efficiency, durability,” Mr Kuhn said.

He said customers could now order a swing machine in the form of either a harvester, processor or log loader. RDO has eight dealerships and has plans to fast-track several new dealer locations over the next three years.

Mr Kuhn said the company was working with John Deere to ensure that its technicians were capstone-trained, which meant they had completed extensive, high-level training with John Deere.

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Drones finding new applications

Drones are estimated to be worth up to NZ$7.9 billion to the economy, New Zealand’s Transport Minister Phil Twyford said at the launch of the Government’s plan for drones this week.

The paper released last week Taking Flight: an aviation system for the automated age, sets out the Government’s vision for how drones can be better integrated into the current transport system to develop a thriving, innovative and safe sector.

Phil Twyford said drones will deliver economic benefits by doing tasks that are time intensive, expensive, and risky – such as monitoring crops, inspecting power lines and helping with emergency operations.

“New Zealand has an opportunity to be at the forefront of drone technology with sectors like forestry, agriculture, and conservation already harnessing their abilities.

“An example of the innovation that’s already underway is Zephyr Airworks, who have partnered with Air New Zealand to test and develop its self-piloted, electric air taxi here in New Zealand.

“There are already over 77,000 drones in use in New Zealand and our Government knows that the public have concerns about privacy and safety. Safety is our top transport priority and there are a number of initiatives already underway, including looking at potential updates to the rules for using drones”.

“The Ministry of Transport is currently consulting on potential new powers for law enforcement agencies to seize or detain drones that are breaking the rules”.

Note: As well as identifying the benefits drones can deliver, Taking Flight also sets out the challenges we need to manage to unlock the benefits of drones and keep New Zealanders safe.

The full report can be viewed here.

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Tasmania: Comments invited on new code

Enhancing forest management practices in Tasmania - Effective forest management is vital to the ongoing sustainability of our forests and the viability of the sector, both native and plantation and on both public and private land.

The latest proposed enhancements to the Tasmanian Forest Practices Code (‘the Code’) have been released by the Forest Practices Authority (FPA) for public comment.

The Code provides standards and guidance to ensure the ongoing viability of Tasmanian forests balanced with reasonable environmental protections. The latest enhancements include guidance for land owners wishing to establish and harvest trees along waterways (riparian zones) for agroforestry and riparian rehabilitation.

There is also a new section on native forest management (silvicultural) systems which will provide a single stand-alone reference and reduce reliance on external documents.

Chief Forest Practices Officer, Peter Volker, said the latest proposed enhancements were developed through a comprehensive review process.

“We set up working groups drawn from industry, private forest owners, discipline experts and community groups to review each section of the Code,” Dr Volker said. “It was a very positive process with a focus on changing only those things that were necessary and ensuring the Code remains up to date with modern forest practices and environmental management.

“The Code is the go-to for people preparing and implementing forest practices plans to achieve sustainable forest management.

“Importantly, it is about how forests are managed and is not about setting forest policy or how wood and timber are used, and it is very clear on that.

“The Tasmanian Forest Practices Code has stood the test of time. It has been rated as one of the best Codes in the world – the latest amendments will make it even better,” Dr Volker said.

Tasmanian Forest Practices Code was first released in 1987 and has had previous revisions in 1993, 2000 and 2015.

The enhanced Tasmanian Forest Practices Code is available on the FPA website or can be viewed at the FPA office in Hobart or at Private Forests Tasmania (PFT) offices in Burnie and Launceston. Submissions close on Friday, 20 September 2019. Contact: FPA 6165 4080 or info@fpa.tas.gov.au

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MBIE consulting on proposed law changes

Some important Regulation changes MBIE are now consulting on. Key proposals which have potential to affect forestry are around operator protection, high risk plant and working at heights.

Proposed H&S Regulation Changes - Plant, structures, working at heights and excavations

MBIE have released a discussion / consultation document seeking sector views on proposals to introduce regulation which will replace components of the H&S in Employment Regs (1995) and Pressure Equipment, Cranes and Passenger Ropeways (PECPR) Regulations.

Broadly speaking the proposals cover:
> Protections for People Working with Mobile Plant (OPS, plant that lifts or suspends loads and collision risks)
> Additional duties for persons designering, manufacturing, suppling and importing plant or structures, including second hand plant.
> High Risk Plant
> Working at Heights
> Excavation Work

Key proposals centre around the adoption of more Australian model law and application of the Prescribed Hierarchy of Control for high risk plant and work.

The discussion paper and information on how to make a submission , including on- line, are available at: www.mbie.govt.nz/plant-and-structures

Hon Iain Lees-Galloway’s press release can be found here: https://www.beehive.govt.nz/release/keeping-workers-safe-and-supporting- businesses-do-it

MBIE are proposing to run some initial sector-specific forums (to update stakeholders involved to date). The forestry one will be Fri 2 August 12 – 1.30pm Agriculture and Forestry, 15 Stout Street, Wellington. They are also proposing to bring the forums back together near the end of the consultation period to get additional feedback. This is in addition to any written submissions.

Specialist forums - MBIE will also organise separate forums with specialist engineering and other groups involved with high risk plant currently covered by the Pressure Equipment, Cranes and Passenger Ropeways (PECPR) Regulations. If you would like to attend one of these forums, or have any questions about the consultation, please contact Bob White (bob.white@mbie.govt.nz) or Kate Raggett (kate.raggett@mbie.govt.nz).

Regional workshops - MBIE will also be running regional forums over the consultation period. They will provide more information about these in due course.

Submissions close 4 October.

Industry Response The Forest Industry Safety Council (FISC) has set up a Task Action Group (TAG) to consider MBIE's proposals and submit on issues that will or could affect the forest industry. This group consists of:
Guy Gaddum Barry Wells Arthur McLean Jack Mains Lars Rosewarne Chris Hancock Wayne Dempster (coordinator) If you have any questions or concerns about the proposed changes we invite you to direct them to one of the group above.

FISC will be submitting on the proposals and would value your thoughts.

Source: Wayne Dempster (Rayonier) - for FISC Regulation Reform TAG.

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Nature's Flame going geothermal

Contact Energy and Nature’s Flame have signed an agreement and broken ground to build a geothermal energy supply system that will provide process heat to Nature’s Flame’s wood pellet manufacturing plant in Taupo.

The new energy supply for Nature’s Flame will largely come from downstream of the Tenon sawmill, which Contact has supplied with geothermal energy since 2007. It is part of a A$7 million project Norske Skog announced in December to bring the facility up to its full capacity of 85,000 tonnes of pellets a year.

Nature’s Flame operations manager John Goodwin says the additional energy supply enables the company to utilise plant that was installed at the site but not operating when the business was acquired from Solid Energy in 2015. It will also save feedstock – sawdust and shavings – currently being burned in the plant’s driers.

The Taupo plant is producing about 40,000 tonnes a year now – split almost equally between domestic and export sales. The low-moisture and low-ash pellets are a premium product and the new capacity is likely to go into overseas markets like Korea and Japan, Goodwin said.

Norske Skog, which also operates the Tasman paper mill at Kawerau, bought Nature’s Flame as part of a long-term strategic shift away from paper and into other sustainable options for wood fibre use. While it remains a major paper maker, in Europe it has been developing options for making biogas from mill sludge. In Australia it partnered with Circa Group to make the ‘green’ biosolvent Cyrene from wood waste.

Contact Energy operates five power stations on the Wairakei, Tauhara and Ohaaki geothermal fields and is considering a further expansion at Tauhara. It is encouraging greater direct use of the underground steam resource by industrial users as part of a strategy to use new renewable technologies to help them reduce their emissions.

Contact chief generation and development officer James Kilty says the new supply agreement with Nature’s flame will enable it to optimise the efficiency of the production well currently supplying Tenon for the benefit of both customers, he said.

Goodwin says the upgrade is on schedule for completion in the December quarter. At full capacity the pellet plant will use about 460,000 gigajoules of steam annually.

This extra capacity has enabled Nature’s Flame to enter the Korean and Japanese markets, where the pellets will be used to provide a sustainable alternative to burning fossil fuels. By ramping up operations using direct heat from geothermal energy, Contact and Nature’s Flame are helping to reduce global CO2 emissions.

Source: BusinessDesk

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This week in 1BT news

Māori realising land aspirations through One Billion Trees - Forestry Minister Shane Jones says the Government’s One Billion Trees programme is providing important Māori to realise the potential of their land in the Bay of Plenty.

“Crown Forestry will invest $5 million into two joint ventures that will see 330 hectares of land converted to productive forests,” Shane Jones said, "The first joint venture is 194 hectares owned by Pukahukiwi Kaokaoroa 2 Incorporation while a further 141 hectares is owned by Waipapa 2B2 Ahu Whenua Trust."

“These properties included eucalyptus crops which failed to realise an income for the landowners. One of the core goals of the One Billion Trees Programme is supporting Māori to realise their land aspirations. This goes right to the heart of that."

“Not only will these partnerships create an income for the Trusts through rental and a share of the profits at harvest, there is also potential to upskill workers to eventually take over management of the forest from the Crown. Up to 235,000 trees will be planted on these two properties this season, with land preparation now underway.

“It brings Crown Forestry’s investment in the Bay of Plenty to $6.3 million and takes the total number of joint ventures in New Zealand to 25, totalling over 15, 000 hectares,” Shane Jones said.

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Another export fibre market correction

Paper recycling costs rising 35% as export markets collapse - The price of trying to do the right thing by recycling paper just went up, with Oji Fibre Solutions announcing a 35 percent increase in the cost collecting a binful of used paper to stem the losses it's suffering when it sends recycling paper offshore for reprocessing.

The firm advised customers today that the combined impact of China raising the standards it expects before taking the world's garbage for recycling, and the global economic slowdown caused by the US-China trade war, had "flooded all cardboard and mixed paper markets, dramatically driving recycled fibre, pulp and paper prices down".

"This time last year, we were making a US$120 margin per tonne. Now we're losing about U$80 per tonne," said Jordan Roberts, exporting customer services manager for Oji.

The firm collects some 280,000 tonnes of recycled paper annually, of which it can process 220,000 tonnes at its locally-owned pulp and paper mills at Penrose and Kinleith. However, until it expands processing capacity in New Zealand, it sends another 60,000 tonnes offshore, with Indonesia last month joining China in requiring higher standards for recycled materials.

Those higher standards would raise the cost for Oji to make recycled paper fit for export, while the Indonesian move was likely to see prices drop further on the international market, said Roberts, who expected other paper recycling firms to follow suit.

"Current prices are now not sufficient to pay the collection, processing and transportation costs. Going forwards there is also real concern around the future of exporting many paper grades."

While the monthly rental cost of a standard green wheelie bin was unchanged, the 'lift charge' would rise from $10 to $13.50, a 35 percent increase that Roberts said was typical of the increases customers would see around the country.

Source: BusinessDesk via Scoop

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... almost finally ... all you need is logs

It's called Xylem - have a closer look - I think it's rather nice actually!

This 'in-forest' pavilion is comprised of thousands of linear feet of ponderosa and lodgepole pine logs. Each log was sustainably sourced from nearby forests. Once stripped of their bark, the logs were cut to length and bound together to produce the bulk of the pavilion.

These large masses of timber make up a series of lounging surfaces, as well as the expansive cantilevering canopy and the column cladding. The canopy is comprised of specially configured hexagonal bundles suspended from an AECOM-engineered steel frame. For Xylem, the owners worked with local architects.

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Buy and Sell

… and finally … Murphy goes to Paris

Murphy, a furniture dealer from Dublin, decided to expand the line of furniture in his store, so he went to Paris to see what he could find. After arriving in Paris, he visited with some manufacturers and selected a new line he thought would sell well back home.

To celebrate the new acquisition, he decided to visit a small bistro and have a glass of wine. As he sat enjoying his wine, he noticed that the small place was quite crowded, and that the other chair at his table was the only vacant seat in the house.

Before long, a very beautiful young Parisian girl came to his table, asked him something in French (which Murphy could not understand), so he motioned to the vacant chair and invited her to sit down.

He tried to speak to her in English, but she did not speak his language. After a couple of minutes of trying to communicate with her, he took a napkin and drew a picture of a wine glass and showed it to her. She nodded, so he ordered a glass of wine for her.

After sitting together at the table for a while, he took another napkin, and drew a picture of a plate with food on it, and she nodded.

They left the bistro and found a quiet cafe that featured a small group playing romantic music. They ordered dinner, after which he took another napkin and drew a picture of a couple dancing.

She nodded, and they got up to dance. They danced until the cafe closed and the band was packing up.

Back at their table, the young lady took a napkin and drew a picture of a four-poster bed.

To this day, Murphy has no idea how she figured out he was in the furniture business!

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

John Stulen

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