WoodWeek – 2 June 2021

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Greetings from your WoodWeek news team. Looking to markets where the ripping ride on the fun section of the log export roller coaster continues. See our first story and today for details.

Our Carbon Forestry Conference delegate numbers are set to exceed 330 which will be a new record for this event. We strongly recommend you register now before this event sells out. The pace of discussion on carbon forestry is growing. This week's budget will should reflect input from the Climate Commission on their recommendations to Government for action. Click here to register yourself or your team for our conference before time runs out.

Keeping the positive theme alive, people in the Bay of Plenty welcomed the news earlier this week with a sale to new owners confirming Whakatane Mill continues to have a future. It's great news for the town, the wider region and the New Zealand pulp and paper industry. A consortium of local and European private equity investors has emerged to throw a lifeline to the Whakatāne Mills, which had been slated for closure at the end of next month.

Did you know a forwarder operator spends about 70% of their working day operating the crane? - This means there is much to be gained by finding ways to optimise crane operation. Komatsu Forest is now introducing new control technologies that react to the forwarder operator's slightest movements, translating them into smooth and efficient crane operation.

The Forest Owners Association (FOA) say forests are productive and vital in meeting climate change goals. They say the Federated Farmers’ call for the government to restrict forest planting ranks as an unnecessary intrusion on the right of farmers to plant trees on their land if they want to. Any restriction would make it more difficult for New Zealand to reach its vital climate change targets.

This week's SnapSTAT statistics for weekly trade values, tracked by ANZ, show log exports going berserk (their words not ours). Thanks to our sponsors of this feature: the great team at Chainsaw & Outdoor Power (COP) and Oregon.
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Private deal should secure Whakatane mill

Private equity reprieve for Whakatāne mill - A consortium of local and European private equity investors has emerged to throw a lifeline to the Whakatāne Mills, which had been slated for closure at the end of next month.

No valuation is disclosed in the statement today from the consortium, which involves Auckland-based Ross George, a founder of Auckland-based private equity firm, Direct Capital, who appears to be investing in his own right.

The consortium is led by London-based Dermot Smurfit, who like George is listed as a 33% shareholder of Power Paperboard Ltd, a company registered at the New Zealand companies office last Tuesday, along with Swiss-based investor Raymond Alan Dargan.

The deal will save an unknown number of the 210 jobs at the mill, which is one of the Bay of Plenty town’s biggest employers. The statement announcing the deal said the mill would stop producing packaging for liquid products – essentially paper-based drink packaging – and concentrate on “high quality folding box board, carrier board and food service board, all of which are currently manufactured at the mill”.

The new owners intended to invest heavily in the plant to make it “a more competitive operation to support customers in New Zealand and around the world,” said Ian Halliday, who will become chairman of Whakatāne Mill.

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Source: BusinessDesk

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Log export market update

Log export market update - Thanks to the team at Champion Freight - Log exports to China have accelerated in a big way, mainly with the reporting month (April) being a month on from the anniversary of last year's Covid work stoppage.

The chart shows total log export values to China to the end of April were up 31 percent year-on-year contributing to overall log exports reducing by 25 percent across all export markets. Log exports to South Korea were up 15 percent up while volumes to Japan and India were down 100% and 4% respectively.

For the month ended in April, China shipments were up 327 percent, compared to April 2020 due to the Covid lockdown here in New Zealand, taking overall log exports up a whopping 299 percent. Logs to South Korea were up 139 percent.

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Smart-tech for forwarders makes it simple

New forwarder smart simplifies work - Did you know that a forwarder operator spends as much as 70% of their working day operating the crane? - This means there is much to be gained by finding ways to optimise crane operation. The most ergonomic work environment possible is also key to ensuring high and constant production throughout the working day. Komatsu Forest is now introducing Komatsu Smart Crane, a crane that reacts to the forwarder operator's slightest movements, translating them into smooth and efficient crane operation.

Crane operation requires several different but simultaneous actions, and over the space of a day these add up to many hand movements to forward timber to the roadside. Naturally, an experienced operator performs these movements without thinking, but a simplified approach would reduce the physical toll and optimise crane operation. This was the central idea behind the development of Smart Crane.

Smart Crane offers advantages that include a reduced physical burden on the operator, enabling them to maintain high production throughout the day. This is made possible by the crane's precision and smooth movement patterns, which with less sway and vibration removes stress from the operator.

Smart Crane simplifies crane control too. With just three joystick movements, the operator can easily control the grapple with great precision.

“The telescopic boom extension is controlled automatically, meaning one less thing for the operator to think about. Fewer joystick movements make the job easier – even for an experienced operator – and mean better operator ergonomics. Another advantage is that it is much easier for an inexperienced operator to quickly hone their crane operation skills”, Daniel Grabbe, Product Manager forwarders explains.

Smart Crane alters its behaviour depending on which stage of the crane cycle the grapple is at, just as an experienced operator does. This means that the crane behaves differently depending on whether the operator is gathering timber from the ground, loading it into the load space or stacking it at the roadside – everything to ensure maximum productivity every step of the way. This is seen, for example, in how Smart Crane prioritises the telescopic boom extension over the main boom, saving both time and fuel.

Source: Komatsu Forest

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Implications of ban for global markets

Russia’s log export ban: Global implications - The proposed ban will have broader repercussions in other regions, including tighter log and lumber markets. In the short term, China will look to source softwood sawlogs elsewhere, driving more competitive log regions such as New Zealand and Western US. Hardwood sawlog markets will also be impacted, as China seeks to increase imports of US hardwoods or eucalyptus.

China will also continue to shift its mix of imports, from logs to lumber, a pattern seen also in Japan and South Korea. This will create an opportunity for lumber producers globally to expand exports to China.

In the longer term, if Russia is successful in growing its wood processing industry and improving the quality and sustainability profile of those products, it will be an increasingly competitive player in global markets.

For more information about the study from Wood Resources International and O’Kelly Acumen, visit the WRI website: https://woodprices.com/focus-report-series

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Source: Glen O’Kelly,

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Whakatane mill staff reach agreement

Staff reach agreement with potential new employer - Whakatane Mill staff have reached an agreement in principle with their potential new employer and are hopeful the sale of the mill will be finalised soon too.

First Union representative Jared Abbott said staff completed their processes with the potential purchaser on Monday and have agreed to new terms of employment. He said now staff are just waiting for the potential purchaser, a consortium led by Dr Dermot Smurfit, a European investor, to finalise its agreement with the mill's current Swiss owner SIG.

"Our understanding is things are looking really positive," Abbott said.

If the mill is sold, staff have agreed to a pay reduction, but Abbot said this may be offset by the payment of a retainer which would see staff staying with the mill get 50 per cent of their redundancy this year, 25 per cent in 2022 and another 25 per cent in 2023.

"For some of the newer staff, this would be less favourable and for the longer serving staff it would be more favourable," he said, adding, "newer staff's redundancy pay-outs are considerably less."

The site hasn't been profitable for some time and Abbott said as a result staff's annual wage increases have been "quite small" of around 1 per cent. But the payment of this retainer fee for the next three years will see staff getting significantly more pay than they would usually.

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Fungus may be solution to stopping wilding pines

An indigenous New Zealand fungus may help to control wilding pines – one of the country’s most ecologically damaging weed species – a student’s research project shows.

Wilding pine control costs New Zealand millions of dollars a year, and involves the costly and time- consuming methods of cutting down the trees and spraying herbicide from the air. Control seldom totally eradicates the pines, which often reinvade sites some years later.

Armillaria novae-zealandiae, also known by Māori as harore, is a fungus that feeds on decaying wood. It is common in native forests, where it is a natural part of the ecosystem, helping to decay fallen trees. But if it gets into pine plantations it is seriously destructive, killing seedlings and reducing growth.

In a Bio-Protection Research Centre student research programme, biology student Genevieve Early, investigated how well A. novae-zealandiae and two closely related species established on wilding pine species.

Supervised by BPRC principal investigator and University of Canterbury Professor Ian Dickie and his colleague Dr John Pirker, she tested what age of wood it grew best on (ranging from live and freshly harvested wood to old and decayed wood).

“The research aimed to address knowledge gaps in our understanding of Amillaria, and eventually investigate whether we could use it as a biological control of invasive pines,” says Genevieve. “Some of the questions we have about using it, for example, are whether we can introduce it to grassland areas that are susceptible to wilding pine invasions, where it doesn’t currently exist, and whether introducing it at the same time as pines are felled would prevent reinvasion.”

Her results were promising. "Armillaria novae-zelandiae showed the best growth,” she says. “We tested several isolates of this species and all of them grew larger than the other Armillaria species. It also consistently grew most vigorously on live or freshly-felled pine wood."

"Armillaria’s strong growth on live or fresh pine wood is important,” Genevieve says. “It’s really promising that all the fungi grew best on live or fresh wood, as this implies that we could potentially design a way to inoculate wilding pine sites with Armillaria at the same time we are manually clearing trees and using herbicide. That could be practical and economical if we don't have to plan more site visits to use the fungi.

“We also want to find out if this will accelerate decomposition and reduce wildfire risks."

Genevieve said A. novae-zelandiae has been used as a food source by Māori, who should be involved in continuing research. “Using it as a biological control may be of particular interest to iwi in areas badly affected by wilding pines, as a way of protecting landscapes and ecosystem values.”

Prof Dickie said his group was seeking funding to continue the research, particularly looking at how Armillaria affected native seedlings, to test whether it could be used to clear pines in areas where ecological restoration was planned.

“Until now, we’ve been good at killing pines, but not at restoring ecosystems,” says Ian. “We are winning the battles, but losing the war. This fungus may be the key to not just killing pine, but to keeping it from reinvading, and to restoring ecosystems.”

More on video here >>

Source: Scoop
Photo credit: doc.govt.nz

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FOA: Government is right; Feds are wrong

Forest owners say forests are productive and vital in meeting climate change goals - The Forest Owners Association says the Federated Farmers’ call for the government to restrict forest planting ranks as an unnecessary intrusion on the right of farmers to plant trees on their land if they want to. The Association also says a restriction would make it more difficult for New Zealand to reach its vital climate change targets.

Federated Farmers are stating the government has failed to live up to its promise during the election campaign to make landowners apply for a resource consent if they intend to plant more than 50 hectares of trees on land capability classes 1 – 5.

Forest Owners Association (FOA) president, Phil Taylor says last year’s PricewaterhouseCoopers’ Report, commissioned by MPI, found that, on average, the value-add for forestry, per hectare, was many times higher than it was from the average hill country property.

“Federated Farmers are telling their members that their national organisation is trying to stop them planting forests on whatever land they might want to,” Taylor says. “It’s a commercial decision for landowners to plant trees based on their assessment of the productivity of that land. They should be backed not blocked if they want to improve farm profitability and sustainability by planting trees,” he adds.

“Forests are productive too. Yet Federated Farmers are demanding restrictions on all land classes.” Phil Taylor also says Federated Farmers seem to be confused about the rules and rate of overseas investment in forest planting. bbn “Firstly, they are complaining about carbon forestry. Then they say that the government needs to fix the special forestry test for direct overseas investment. If they checked with the Overseas Investment Office, they would find out that the OIO is not allowed to, and doesn’t, approve any carbon forest planting.”

“Then if Federated Farmers checked on approvals for production forest planting, they would find that the rate for the 18 months to the end of last year was only 500 hectares a month. And since then, the approval rate has fallen.”

Taylor also says the Climate Change Commission calculates there is a need for another 380,000 hectares of plantation forests within 15 years for New Zealand to reach its greenhouse gas reduction targets. This represents about 4 percent of the existing sheep and beef estate.

“If we fail to get that modest area in trees because of planting restrictions, then the government may have to reduce livestock numbers instead. And I don’t think Federated Farmers would want that.”

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Plans to use Russian forest credits soon

Petrochemical company plans to use Russian forest carbon credits from 2024 - Petrochemicals giant Sibur PJSC plans to offset some of its emissions by tapping the carbon- capture potential of Russia’s massive forests from 2024.

Sibur will consider buying carbon credits from projects that plant trees or boost the CO2 absorption capacity of existing woodlands, becoming one of the first Russian companies to do so. The country is keen to monetize the “carbon sink” potential of its vast forests, but such programs have faced criticism from climate scientists.

“From 2024, when Russia should adopt a methodology and verification of such projects, we hope to start using this option to offset our carbon footprint,” Maxim Remchukov, Sibur’s head of sustainable development, said in an interview. It’s part of an emissions plan that also includes growth in renewables, energy efficiency and carbon-capture and storage, he said.

Sibur is already supporting a carbon monitoring pilot project in western Siberia to assess the potential of local forests as carbon sinks. President Vladimir Putin estimated in April that Russia’s biosphere absorbs about 2.5 billion tons of CO2 equivalent every year, though the figure requires scientific verification.

Scientists and activists have found fault with carbon-offset programs, citing a lack of sufficient oversight. Europe, which is seeking to be the world’s first climate-neutral continent by 2050, doesn’t accept any contribution from offsets in its emissions-reduction plan.

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Buy and Sell

... and finally ... some clever one-liners ...

So, my mate came to a fancy dress party dressed as a bank vault.
I said: ''I thought you were coming dressed as an apology?''
He said: 'Well, I thought I'd better be safe than sorry''.

It's gardening season. 6 weeks ago I planted my arse on the sofa.
It's grown considerably ...

I'm in hospital after swallowing invisible ink.
The doctor can't see me yet …

The divorce rate among my socks is truly astonishing!

See you again next week.
John Stulen

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