Friday Offcuts – 27 October 2017

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We’ll start this week with some of the ramifications of the new coalition that’s just been set up in New Zealand. Last Friday the news had just broken. Too early for Friday’s issue. Buy in from the Green party to the just announced NZ First-Labour Party agreement, policies and portfolios had this time last week had still to be set up. Move forward one week. As a consequence of the new Government, changes for forestry and wood processing in New Zealand moving forward are likely to be significant.

NZ First's Shane Jones is going to be the new Minister of Forestry. Forestry for the first time in many years has a stand-alone Ministry (Jim Sutton was the last full minister back in 2004). The Ministry of Primary Industries will cease to exist with forestry, fisheries and agriculture being separated. NZ$1 billion per annum is being set aside for a new regional development fund which will include commercial planting of 100 million trees per year as part of a “Billion Trees Planting Programme”.

Think about that. It’s certainly an ambitious target. That’s around 100,000 ha per annum each and every year for 10 years, a level that hasn’t been achieved for well over 20 years. Both Maori land owners and farmers are going to play a major role in meeting this target. Life’s also being breathed back into a NZ Forestry Service. Many of our readers will still remember and worked with the old NZFS before it was disbanded back in 1987. It’s likely that the new Government department's headquarters will be based in Rotorua. Other key elements and links to plans under the new agreement can be found below. Further news (and clarification on some of the earlier pre-election plans such as encouraging investment in wood processing, assisting onshore processing of logs by providing greater security of logs to local mills and implementing a 'wood-first' strategy for any government buildings) will follow as the policies and timelines in the next few weeks become clearer.

Other tech news this week includes; findings out of a new research report Forest and Wood Products Australia that shows Australian saw millers and associated manufacturers have invested an estimated AU$900 million over the last five years in efficiency and productivity initiatives and in a world first, Scion scientists last month completed a draft assembly of the radiata pine genome which is expected to open new doors to assist in future tree breeding.

Finally, the 2017 Australian Timber Design Awards were presented at a glittering dinner held in Melbourne on Wednesday night. Picking up the Overall Award Winner plus the highly coveted People’s Choice Award was the International House Sydney building in Barangaroo South, Sydney. The much talked about seven-storey commercial engineered timber building was designed by Tzannes for Lendlease. You can check out the winners and some of the really eye-catching designs in a link provided in a story below or by clicking here. Enjoy this week’s read.



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Forestry and environment winners with incoming Government

The last two trading sessions have seen good volume move through Carbon Match. NZUs have firmed some 50 cents since the new Government in New Zealand was announced - last trade $18.90. We have momentarily been at this level before - we nudged the $18.90 mark last October. But $19 would be a level not seen since 2011.

Certainly, the gain appears modest when one takes stock of the whole new world into which have entered. But further clarity over policy direction - and over the future of the ETS - only really emerged towards the end of trading yesterday (Tuesday), and at a fairly high level.

In two separate press conferences incoming PM Jacinda Ardern unveiled first Labour's coalition agreement with NZ First, and subsequently the confidence and supply agreement between Labour and the Green Party.

The key elements of immediate climate change interest:

1. A "zero carbon" Act (net carbon emissions of 0 by 2050) is to be introduced;
2. an independent Climate Commission is to be established to ensure the country actually achieves this goal; and
3. there seems to be a plan to bring agricultural emissions into the ETS if the new Climate Commission recommends it, but with a free allocation of 95% and with all revenues from this source recycled back into agriculture in order to encourage agricultural innovation, mitigation and additional planting of forestry.

But wait there's more. Reading both documents consecutively reveals a really very green agenda, with a strong focus not only on the issue of a framework to address climate change but also on the investment in transport and in forestry that might get us there.

The Government will lead by example and that begins at the top - by 2025/26 the government's vehicle fleet, where practicable, is to be "emissions free".

The Climate Change Commission is to work on transitioning the electricity sector to become 100% renewable (and that includes geothermal) in a normal hydro year by 2035.

Perhaps the most ambitious environmental goal is one set out in the agreement with NZ First, which includes the establishment of a $1b per annum Regional Development (Provincial Growth) Fund, including significant investment in regional rail and the planting of 100 million trees per year in a Billion Trees Planting Programme.

At an average stocking rate of perhaps 1000 stems per hectare, this amounts to 100,000 Ha per annum of land to be sourced, secured and planted out, each and every year for 10 years (Ed note: The 100,000ha figure includes both new planting and replanting. Replanting of felled forests has typically been around 50,000ha per annum).

This is a staggering level of ambition but possible - an NZIER report released earlier this year showed that new plantings peaked in the mid-1990s at nearly 100,000 Ha. But last year's comparative was a mere 3000 Ha.

With almost 90% of private forest-owners owning less than 500ha, the challenge is significant. It will be even more significant once new thresholds for overseas investment office approval - reported to be as low as 5 Ha - are introduced.

Still, we must not overlook the Government's own self-determining role in this ambitious programme. Mr Peters has secured a commitment to re-establish a New Zealand Forestry Service.

And as Stuff's Charlie Mitchell highlighted, with expected portfolio allocations the Greens look set to "lead departments that together manage 38 per cent of New Zealand's land, an area larger than Portugal – not a bad result for a party on 6.3 per cent support."

So, clearly there are more deals to be done and with no time to waste we can expect the dialogue between the Greens and Mr Peters to begin in earnest... maybe we will see joint press conferences before we know it.

Source: Carbon Match

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More trees optimistic but achievable

NZ forest owners say they are looking forward to working with the new Minister of Forests Shane Jones to meet what forest owners call a huge challenge to double the annual forest planting rate.

Forest Owners Association President Peter Clark says the new government’s target of an additional 50,000 hectares of planting a year is ‘optimistic but achievable’.

“For most of the 1990s, the new planting rate was more than 50,000 hectares a year. In 1994 it was 100,000 hectares beyond keeping up with replanting.”

“We’ve been talking with Shane Jones about what can and can’t be achieved and he is in no doubt about some of the difficulties of getting more plantings going after more than a decade of no growth.”

“In particular we do need to build the labour force to do the planting. At the moment we are struggling to plant enough trees to maintain the present area. We hope that Shane Jones being Minister of Regional Development will help in that respect.”

Peter Clark says the idea of a separate Forest Service sounds like a good idea. “We don’t know what functions it will have, so we have to wait for that. But with forestry under the Ministry of Primary Industries we weren’t getting the attention an industry should get when it earns six billion dollars a year in exports.”

“The forest sector won’t be completely disconnected from MPI though. As well as agriculture, Damien O’Connor has a biosecurity portfolio, and that is a huge priority right across the primary sector,” Peter Clark says.

“There are a number of pests and diseases which we don’t have, but which would have a huge impact right across agriculture and forestry if they ever got into New Zealand.” Peter Clark says James Shaw taking on the role of the Minister of Climate Change is significant.

“As Green Party leader, his influence will keep the government focus on doing something practical about climate change. The only practical solution is planting more trees. That’s the only currently available technology to significantly pull down our level of carbon emissions.”

Peter Clark believes the just announced partial introduction of agriculture into the Emissions Trading Scheme will also give a boost to forest planting on farms.

“The initial major planting will be on Crown and M?ori land. But if the government gives farmers an option of growing trees to absorb carbon and offset the greenhouse gas emissions from their stock, then I’m sure we’ll see farmers planting out woodlots with a view to getting a return on eventually harvesting those trees.”

Source: Forest Owners Association

For further coverage on foresty's increased profile this week as a consequence of the change in Government, click here.

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NW Jolly Medal honours outstanding service to forestry

A widely recognised expert in the areas of forest health and the application of remote sensing technologies, Dr Christine Stone, has been awarded the N.W. Jolly Medal, in recognition of her long-term commitment and ongoing contribution to industry R&D.

The medal is the Institute of Foresters of Australia’s (IFA’s) highest and most prestigious honour for outstanding service to the profession of forestry, named in honour of Norman William Jolly in acknowledgement of his contributions to the industry in the first half of the 20th Century.

Dr Stone’s many achievements include the increased awareness and eventual adoption by the industry of ‘disruptive’ remote sensing technology. She has led multiple research project collaborations in this area, resulting in the successful integration of remotely acquired data into management systems across the industry, with resultant benefits including improved precision, cost efficiencies and occupational health and safety.

Holding research scientist positions with Forests NSW and its antecedents, Dr Stone is currently a Principal Research Scientist, and Leader of the Forest Science team with the NSW Department of Primary Industries. In this role, she has been successful in securing ongoing funding for her team.

Dr Stone’s research has demonstrated the benefits of recruiting non-forestry experts from academia and technology to maximise innovation and improve the effectiveness and competiveness of Australian forest management.

Outside of this work, Dr Stone is notable for her mentoring and development of young scientific staff and supervision of postgraduate students, and the instrumental role she has played in the production of publications and technical presentations across national and international scientific forums.

In addition, Dr Stone is the current Chair of the NSW Forest Industries Taskforce R&D Advisory Group, a member of the national Forest Health and Biosecurity Subcommittee and of the Editorial Board for Australian Forestry.

Speaking about the honour, Dr Stone said her accomplishments have not been achieved in isolation and that her success is, in part, a consequence of working hard to make the most of the many opportunities the industry has afforded her.

“I’ve always been a big believer in collaboration and, as such, I’ve had the privilege to lead a great team, as well as numerous opportunities to collaborate with talented scientists from within other institutions and agencies,” Dr Stone said.

During her acceptance speech, Dr Stone took the opportunity to highlight the demise of the Australian forestry industry’s R&D capacity, and the significant gaps that are appearing as a result. “If this continues, it will negatively impact the sector’s future sustainability and competitiveness,” Dr Stone said.

“I believe this can be ameliorated by presenting today’s young professionals with similar R&D opportunities to the ones I’ve been fortunate enough to be exposed to. Governments are stepping back, so it’s up to business leaders in the sector to take on this responsibility. If not, the sector will fail to attract and maintain the talented young talented people it requires.”

Ric Sinclair, Managing Director of Forest and Wood Products Australia said the Jolly Medal is a much-deserved honour in light of Dr Stone’s significant and long-standing contributions to the industry.

“We would like to congratulate her on this wonderful achievement, and the crucial role she has played in ensuring the success of our industry over the past three decades. Not only is Christine Stone a leading figure in Australian forestry R&D, but she has also acted as a significant and positive role model for women in forestry,” he said.

Source: fwpa.com.au

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Industry adopts drones for forestry supervision

Enabling foresters to see the forest from above; drone technology has been developing exponentially over the last couple of years and Interpine Innovation presented at ForestTech 2016 on courses available for foresters to start using the technology to their benefit.

Over 25 foresters from harvesting supervisors, environmental managers, forest engineers and a few harvesting contractors have completed training this year and are starting to get out there using drones to make more informed and timely operational decisions. The course provided by Interpine in partnership with Massey University School of Aviation allows them to gain an understanding of drone technology, while also getting their “RPAS Civil Aviation Authority 101 wings certification”.

The course provides flight skills on a range of DJI craft so they can then select which technology is the most appropriate to invest in for the job. Hazel Swanson, a forest engineer from Timberlands Ltd completed the training in May this year and will be speaking at ForestTech 2017 in November on her experiences to date; providing insights into how drones have made an impact on her job and her team’s work.

Two of the NZ Civil Aviation Authority RPAS (drone) team attended alongside the recent intake of foresters in August; with Mac MacCarthy making reference to the course “what we have seen here is an industry sector doing things right and a model for others to follow … training is key to the success and the safe adoption of this technology”.

If you’re interested in taking up the technology the next course is being held in Rotorua 11-15 Dec 2017; and online registrations are available at: https://goo.gl/qNQD1m. Further details on the upcoming ForestTECH 2017 series can be found on the event website, www.foresttech.events. The series starts in Rotorua on 15 November.



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New Forests adds to US forestry portfolio

New Forests have announced an agreement to purchase a 170,000-acre timberland estate in northern California from Roseburg Resources Co. The properties will be acquired by Shasta Cascade Timberlands LLC, an investment entity managed by New Forests. Settlement is expected in early 2018.

Following the acquisition of two other California forestry estates in 2016 and 2017, the Shasta Cascade Timberlands acquisition will bring New Forests’ total US timberland under management to 186,000 acres. The acquired forests include high-quality stands of Douglas-fir, ponderosa pine, and other mixed conifers stretching across four major blocks from Redding north to Mount Shasta.

Globally, New Forests manages more than 2 million acres of forestry, land, and conservation investments, including more than 450,000 acres of forest carbon projects for third-party landowners in the continental US and Alaska.

Source: www.newforests.com.au




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Australian saw millers invest AU$900m in industry future

Australian saw millers and associated manufacturers have invested an estimated AU$900 million over the last five years in efficiency and productivity initiatives on the back of strong demand for timber fuelled by the booming housing market.

The investment comes despite uncertainty around the future availability of logs to process, with Australia’s sawn wood production set to fall increasingly short of demand – the deficit in sawn timber is likely to rise from a predicted 1.1 million cubic metres in 2025 to 2.7 million cubic metres in 2045.

These were among the findings of a new research report commissioned by Forest and Wood Products Australia (FWPA) examining the sums invested, areas of investment and benefits sought across softwood and hardwood saw millers, panel plants and plywood operations.

The data in the report by Omega Consulting shows a combined total of AU$473 million was invested between 2012 and 2017 by the operations surveyed – implying total investment across the entire industry of approximately AU$938 million.

Anecdotal stakeholder feedback suggested conditions are currently buoyant, thanks to the booming Australian housing market, and the industry’s significant expansion capacity is being recognised.

Jim Houghton, Statistics and Economics Manager of FWPA, welcomed the investment, and said technology could help industry to increase the amount of sawn timber produced from the same volume of logs, and boost the use of residues to form new and innovative materials.

“The analysis demonstrated investment is healthy and a definite priority within the industry. This level of investment can only mean positive things for the future of our industry. The anecdotal feedback from processors also suggests more could be done if there were greater certainty around future log supply,” he said.

“The uncertainty over future log supply can be attributed to the limited expansion of the softwood plantation estate during the past 20 years and resultant static availability of softwood sawlogs. Concurrently, the availability of hardwood sawlogs has declined as access to the native forest has been reduced.”

The CEO of Omega Consulting, Peter Zed, said the predicted deficit in sawn wood was due to increasing demand driven by predicted population growth. “A whole-of-industry approach is needed to address supply issues, reduce the deficit, and help prevent it from causing a significant barrier to future investment,” he said.

“Both sawmill efficiency and productivity need to be increased if we’re going to reduce the log supply deficit and inspire industry stakeholders with the confidence they need to make optimum investments. This can be achieved through an increased focus on product niche and dedicated R&D around technologies to increase recoveries.”

The report FWPA Australian Timber Industry Investment Review can be read in full at www.fwpa.com.au

Source: FWPA



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Unique branding opportunity offered to Australasia’s suppliers

A unique opportunity is being offered to key product and service suppliers to Australasia's wood processing and manufacturing industries. Every two years, the Forest Industry Engineering Association (FIEA) Forest Products Industry maps have been produced.

They’ve been produced since 2000 and they’re the only printed mapping resource of their kind in this region. New updated maps are being produced and distributed by FIEA throughout New Zealand and Australia in early 2018.

Since first being produced, the large 980mm x 680mm colour FIEA maps have provided the most up to date industry reference for the Australasian forest and wood products industry.

They include information on all major sawmills (location, ownership and production) and also show all major wood processing operations including pulp & paper, fibreboard, particleboard, plywood, veneer, paper & paperboard operations, major chip mills, wood manufacturing operations in both New Zealand and Australia. Over 4000 maps are printed and distributed every two years through major industry magazines and the map advertisers.

An opportunity still exists for those companies who’d like to be involved in the 2018 industry map. An early opportunity to advertise on the new map was offered to and taken up by a number of the key suppliers and technology providers to the regions sawmilling industry as part of the recent WoodTECH series. However, a few remaining spaces are still available at a discounted rate for a limited period.

Actual size: 980mm x 680mm. Booking for the remaining adverts along with positioning on the map will be accepted on a “first come first served” basis. If interested in securing a space on the new 2018 map, please make contact with FIEA’s Sponsorship Manager, Gordon Thomson on gordon.thomson@fiea.org.nz or Tel: +64 7 921 1384 or +64 27 275 8022.

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2017 Australian Timber Design Award winners announced

The 2017 Australian Timber Design Award Grand Prix was awarded to Tzannes Architects and Lendlease for International House - Sydney, which stands at the gateway of the Barangaroo precinct.

International House Sydney is Australia’s first commercial office and largest commercial-scale engineered timber building that uses Cross Laminated Timber (CLT) and Glue Laminated Timber (Glulam). The striking look of the high-rise building, designed by Tzannes Architects and engineered by DesignMake Lendlease, demonstrates a sophisticated understanding of urban and commercial architecture. The outstanding partnership team combining developer, design and delivery professionals, made possible in the creation of International House - Sydney to beautifully re-interpret the history of the site for the future of Sydney.

The CLT and Glulam building materials and technology have delivered the same structural outcome at a fraction of the weight would steel and concrete have been used in its construction. Working to very precise tolerances, the structural elements were prefabricated and erected rapidly, resulting in significant savings and zero lost time injuries. Importantly, International House - Sydney demonstrates that the commercial real estate market will accept mass timber construction as a viable and exciting alternative to conventional concrete construction, increasing opportunity for architecture to contribute more effectively to a lower carbon and more sustainable future for urban development around the world.

Congratulations to Tzannes Architects and Lendlease for this great category entry! The 18th Awards winners were announced during a Presentation Night held on Wednesday 25th October at Melbourne Museum, Carlton, Melbourne. Many well-known individuals from government, the timber industry, and the design community were on hand to enjoy what has become the premier event in the Australian timber-design calendar.

Be inspired. Look over the winning designs by, clicking here.

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Radiata pine genome assembly completed - a world first

In a world first, Scion scientists have completed a draft assembly of the radiata pine genome. This marks the beginning of a new era of precision forestry for a critically important species.

Dr Emily Telfer, who leads the project, says, “The completion of the genome assembly means that we now have an instruction book for how a radiata tree grows. It’s the foundation we need to begin the task of deciphering what each of the base pairs of DNA relates to in physical terms."

At 25 billion base pairs, the radiata pine genome is eight times bigger than the human genome. Following assembly, the next steps are to understand each piece of the genome and the role it plays in tree growth and resilience.

The sheer size of the genome was a large challenge to researchers. Emily says, “This is not the kind of problem we could fix just by throwing resources at it. We had to come up with a way to segment the genome, process it and put it back together again.”

Armed with this knowledge, the forestry industry could breed trees with their desired characteristics – hastening the current method of selective breeding that can take decades to produce superior trees. Once geneticists understand the genome better, that will all change. “We could breed a whole range of different trees - from construction timber to biofuels.”

Another major advantage will be in mitigating the effects of climate change and disease. As environments alter with the climate, diseases not previously found in New Zealand may establish here and threaten our forests. Emily says that thanks to genomics we will be able to identify genes with drought and disease resistance and establish them in the wider population much faster.

The genome assembly will also benefit the international scientific and forest growing community. Radiata is the backbone of New Zealand’s forestry industry, but it is also the most domesticated pine in the world and is grown commercially in Australia, Chile, Spain, and South Africa.

The genome assembly began in 2013 and was completed in September 2017 using Scion’s newly acquired high-capacity computer server – the largest of its kind undertaking genomics work in New Zealand. The official announcement on the completion of the genome assembly was made at the Forest Growers Research Conference in Christchurch.

Source: Scion

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Taitokerau Forests a future model for investors?

A Maori development company with a one-off, 30-year forest rotation under its belt is basking in outstanding success but shutting up shop at the same time. Taitokerau Forest Ltd (TFL) directors have released a mission-accomplished report about the company set up in 1986 to enable Northland Maori landowners to develop forestry.

TFL chairman Rawson Wright then led a discussion about where-to-from-here for the scheme that provided sustainable land use and incomes in remote corners of Northland where otherwise there was little opportunity. "Once all the forests have been harvested the door is closed on this 30-year company," Mr Wright said.

Another injection of funding or joint venture investment is now needed to capitalise on the momentum and infrastructure TFL set up. That would pay for a second cycle of planting, wages, forest maintenance and ultimate harvest.

In its 30 years, TFL had repaid its initial, drip-fed NZ$31m loan government loan and interest, to the value of NZ$61 million, while paying for forestry development, management and wages on 14 Maori-owned blocks, totalling 4,300ha. The company made a return of NZ$11m for its shareholding landowners, with TFL itself taking no residual profits.

As well as that return and NZ$27m put into infrastructure and skills development, direct benefits included jobs, associated contracts and a guaranteed domestic timber supply (around 23 per cent of total tonnage from the blocks). Full time work hours chalked up equalled 66.5 fulltime local jobs - or to mirror forest rotation terms, 29 fulltime workers for 34 years continuously.

Less direct benefits were economic, employment and social development in remote, under-resourced communities, business and governance experience and a reduction in dole dependency. Accountant and TFL director Warwick Syers said the model enabled 'the most pure and economical development you can have on undeveloped land that is not being used.'

Some benefits would endure long after the scheme is wound up, the report by Business and Economics Research Ltd (BERL) said. Speakers at the debrief said the model was ripe for picking up by an investor or joint venture partner with the landowners. They said TFL had "flown below the radar" even while Maori economic and social development had been a topic of the times.

More>>

Source: nzherald.co.nz




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Expressions of interest - Woodflow 2018

Early expressions of interest are being sought from presenters for next year’s Woodflow 2018 technology series. It’s being run in June next year in both New Zealand and Australia by the Forest Industry Engineering Association (FIEA).

What is it?
The Woodflow series is Australasia’s premier technology event run every two years. It provides insights into innovations and new tools being developed and employed by leading forestry, wood products and transport companies.

The objective, with 30% – 40% of delivered log costs being contributed by transport, is to profile the very latest technologies for moving wood from the forest through to the log yard, processing plant, port or market. New initiatives and operating practices being employed to improve planning, logistics & operations within the wood supply chain are also showcased.

The FIEA event is run every two years. It’s run in both Australia and New Zealand. In 2017, the wood harvesting event, HarvestTECH, was sold out. Over 450 logging contractors, forestry managers and key suppliers attended. It was the largest event of its type yet seen in New Zealand.

In September 2016, over 250 harvesting contractors, wood transport operators and planners attended FIEA’s Wood Flow Optimisation event. The 2018 event will be building on the success, momentum and feedback that's been provided by the industry over the last two years at both of these events.

What’s being covered?
- Effective tools, models and case studies for collaboration through the wood supply chain
- Remote sensing and real-time tracking of logs and wood products
- Innovative systems to integrate planning, operations, harvesting, transport & sales
- Advances in automated measurement, materials handling, packaging and distribution
- New innovations around log and wood product handling, trucking, rail and shipping
- New mobile communications and data transfer technologies for local operations
- Developments in information technology and data management
- Opportunities using robotics, automation, augmented and virtual reality, machine learning, telematics and UAV’s
- Health and safety initiatives around forestry and wood transport operations
- Resolving key skills and labour shortages
- International models adding value to supply chain management.


If you have a new technology, are currently undertaking research in this area, can recommend a topic or a speaker that you think would really add value to the event or have an interesting case-study that showcases just how efficiencies have been improved within the wood supply chain, please make contact with brent.apthorp@fiea.org.nz before Friday of next week, 3 November.

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Profit-takers stall carbon price, but $20 in sight

The price of carbon in the New Zealand emissions trading scheme is nudging $19 a tonne and could reach $20 a tonne by Christmas, says the director for financial markets at OMF, which operates a carbon trading platform.

However, with carbon prices hitting their highest price in six-and-a-half years, the OMF's Nigel Brunel said profit-takers were emerging despite the prospect of "much, much, much higher carbon prices" emerging as a new Labour-led administration looks to tackle climate change more aggressively than the National Party-led government of the last nine years.

The price of NZ Units (NZUs) - equivalent to a tonne of carbon - have reached as high as $18.95, having closed last Friday before the long weekend at $18.90.

"The market is probably pausing, unnecessarily in my view," said Brunel, whose firm does not trade carbon but executes trades for a range of NZU traders, including large industrial greenhouse gas emitters, forest owners and traders who provide liquidity in the local carbon market, which has experienced a prolonged gestation in the absence of settled long term policy on climate change reduction plans. Until 2015, the acceptance of low-quality, low-cost European carbon credits had pushed the carbon price below 50 cents a unit before they were banned.

A price above $15 a tonne is a rule of thumb level at which planting forests to create carbon sinks becomes commercially worthwhile, although many foresters have been reluctant to commit to investment in new carbon farming initiatives until long term carbon charging policy is settled.

While Labour introduced the ETS in 2008 and National continued to develop it over its nine years in office, both Labour's partners in the newly formed government - the Greens and New Zealand First - oppose the ETS. The Green Party advocates a flat rate carbon tax, pitched initially at $30 a tonne, to spur climate change action and went to the Sept 23 election with a policy to plant one billion trees over time.

NZ First has said it would incentivise climate change mitigation initiatives rather than have the "pointless" ETS and would encourage New Zealand-based manufacturing based on local timber. Labour has also said it would reintroduce a government forestry service. Details of the coalition agreement are contained elsewhere in this newsletter.

"I've been quite bullish on the carbon price for a long time," said Brunel. "In the longer term, I think we are going much, much, much higher," he said, citing calculations based on the 2015 Paris climate change accords that could justify a global carbon price at US$70 a tonne.

"It's looking pretty good, even looking a bit cheap but I don't know when it will hit $20 (a tonne), maybe by Christmas, but I would be buying." More >>.

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Log revenues soar for Taranaki port

In Taranaki, logs are a growing business for the ratepayer-owned port and they're rolling in and out in record numbers. That's meant the port has had to adapt its operations to meet the needs of its forestry customers.

According to the port's 2016 annual report, 357,000 JAS tonnage were exported during that financial year. That was well up on the 209,000 JAS shipped overseas in 2015. As a result, log revenues soared 80 per cent, which helped offset a fall in commodity imports and exports. That growth is showing no sign of easing.

According to the Port of Taranaki's latest annual report, its "log business continues to grow exponentially." The report states that "favourable market conditions, low inventory levels in China, and large numbers of harvest-ready trees in our catchment area have combined to produce another year of record growth."

In the last financial year 486,000 JAS passed across Port Taranaki's wharves. That's a jump of 36 per cent, which saw revenue generated from logs surge 29 per cent. It's meant the port is having to change the way it stores logs. As well as stacking them higher, it's also investigating developing more land at the former power station site to store logs.

I suspect the growth in log exports has meant more trucks on our roads. But that might not always be the case. The port is "examining means to extend our forestry catchment area and service the growing demand by developing a combined road- rail transport mode for logs."

With rail facilities on-hand the port says it has the infrastructure to make this practical and economically viable. The log business is providing a lifeline for the port during a challenging period.

The latest figures follow a report published in March by the New Zealand Institute of Economic Research on the plantation forest industry, which highlighted its value to the economy. It found the forestry and logging sector is worth NZ$1.4 billion to the national GDP. It's hugely important to provincial economies like Gisborne and the surrounding area, injecting NZ$96 million annually.

That's nearly 5.55 per cent of that region's GDP. In Taranaki, the figure for logging and forestry was only NZ$8 million. But wood product processing pumps NZ$50 million into the region's economy.

Source: stuff.co.nz

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VicForests reports positive operating result

VicForests has achieved a positive profit from operations before tax of AU$1.5 million in 2016/17, highlighting the continued demand for native timber in Victoria. This is a good result considering the operational challenges we have faced. The company’s result after tax was a loss of AU$3.2 million, due to a decrease in the accounting valuation of the area of State forest available to be harvested for timber.

VicForests Chief Executive Officer, Nathan Trushell, said he was pleased with the profit from operations, and that the loss after tax is the outcome of more forest being placed in reserves and not a reduction in demand for timber. “Due to an increase in conservation efforts, areas previously available to us have been excluded from timber harvesting over the past year, Mr Trushell said.

“So, while the value of the timber remains the same, there is less forest available to harvest and therefore the asset value is reduced. “This is not a reflection of the excellent work our staff have done this year, which has generated a profit from our operations.

“VicForests has continued to strengthen our cash position and as a result of sales during the 2016/17 financial year we currently have no debt, he said. Mr Trushell said that despite the decrease in area available to be harvested, the demand for timber remains strong.

“Demand for timber remains high in Victoria and Australia. The most recent report by Australian Forest and Wood Products Statistics indicates that Australia is importing more than $5 billion in wood products annually to meet the demand we are unable to supply locally”.

“The vast majority of Victoria’s native forests will never be harvested. Victoria has a truly world class forest parks and reserve system that covers an area the size of Tasmania. “However, the forest is a dynamic environment, and so we must continue to evolve the way we implement conservation measures. Our staff passionately care about forests, that is why they have chosen to undertaken specialist degrees and spend their life working in the forest”.

“We’re proud of the role our foresters play in helping to protect threatened species as part of managing a renewable resource for all Victorians,” he said. Mr Trushell said that the native timber industry continued to make a significant contribution to the Victorian economy”.

“Economic activity within the timber industry and demand for native hardwood remains high underscoring our contribution to the Victorian economy. The native timber industry contributes hundreds of millions of dollars and thousands of jobs to regional Victoria regional each year. A study released by Deloitte Access Economics last year reported that the native timber industry in Victoria generated $573 million in economic activity during 2013/14 in the Central Highlands region alone”.

“Beyond the impressive revenue number, native forestry supports the Victorian community by underpinning entire industries and many regional areas. The report found that native forestry in this region creates full-time employment for more than 2,100 people,” Mr Trushell said.

Given the continued demand and positive developments in the sector, Mr Trushell was optimistic about the coming year. “Our staff are hard at work in revising our forest management practices to adapt to the currently available resources. We intend to focus on our long-term financial sustainability while continuing to contribute to the growing demand for timber products in Victoria,” he said.

VicForests 2017 Annual report is available to view at www.vicforests.com.au.


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...and one to end the week on ... vagaries of the english language!

- Wonder why the word funeral starts with FUN?

- Why isn't a Fireman called a Water-man?

- How come Lipstick doesn't do what it says?

- If money doesn't grow on trees, how come Banks have Branches?

- If a Vegetarian eats vegetables, what does a Humanitarian eat?

- How do you get off a non-stop Flight?

- Why are goods sent by ship called CARGO and those sent by truck SHIPMENT?

- Why do we put cups in the dishwasher and the dishes in the Cupboard?

- Why is it called 'Rush Hour' when traffic moves at its slowest then?

- How come Noses run and Feet smell?

- Why do they call it a TV 'set' when there is only one?






And on that note, enjoy your weekend. Cheers.

Brent Apthorp
Editor, Friday Offcuts
Distinction Dunedin Hotel
6 Liverpool Street, Dunedin 9016, New Zealand
PO Box 904, Dunedin 9054, New Zealand
Tel: +64 (03) 470 1902, Mob: +64 21 227 5177, Fax: +64 (03) 470 1906
Web page: www.fridayoffcuts.com


This week's extended issue, along with back issues, can be viewed at www.fridayoffcuts.com

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