Friday Offcuts – 5 July 2019

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This week marks the start of The Ultimate Renewable™ consumer advertising campaign. For our Australian readers, television advertisements will have already started to play (they began last Sunday) and they’ll be showing over the next four weeks. Social media’s also going to play a major part in the new campaign. The key message from the campaign is that wood is a continually renewable resource and that trees in Australia’s commercial forests are being replanted.

The messaging is also reinforced with billboards and displays being set up at major train stations along with print media. It’s expected to run until mid-September. For your part, it’s important that you get behind this new initiative, work together whilst the campaign runs and through your own websites and social media, help share the positive message that sits behind the brand. Resources and videos for use by the forestry and wood products industries can be accessed through the FWPA website. Details are contained below.

We covered last week the incredible turnout of logging contractors, forest managers and major technology and equipment suppliers at the HarvestTECH 2019 event that ran in Rotorua, New Zealand. For those who were there and for those who were unable to get into the show, images taken during the event can be viewed here. Details relating to the downloading of presentations given over the two days were sent out to all delegates yesterday. For another popular technology series, ForestTECH, we’ve included in this week’s issue early notification of a series of additional workshops (some with limited spaces available) that have just been set up for resource managers, remote sensing and GIS specialists and inventory foresters that will be involved this year.

Finally, as most will have now picked up, a number of factors have led to a significant drop in export log prices into China over the last few weeks. Some of the impacts are seasonal whilst some represent longer term structural changes that have been mounting. We cover in this week’s issue an update on log price movements and include a story on the impacts being felt in one region of New Zealand as a consequence of these recent adjustments.

Figures on the impact of the tit for tat trade tariffs between the US and China have also just been released. As anticipated, those in the wood business are being hit hard as well. In the first four months of this year, China’s imports of U.S. forest products fell by US$430 million. Over this period the slack has been taken up with increased imports from other countries like Canada and Russia. It’s been suggested that regardless of any future outcome of the trade negotiations between these two economic heavy-weights, that these new supply sources may permanently change the historic wood trade flows into China. That’s it for this week. Enjoy this week’s read.



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The Ultimate Renewable™ campaign underway

Forest and Wood Products Australia’s (FWPA’s) consumer advertising campaign for The Ultimate Renewable™ has commenced this week, as industry is reminded to maximise the opportunities offered by the new brand.

Featuring award-winning architect and host of Grand Designs Australia, Peter Maddison, the advertisements appear on television from 30 June for four weeks, as well as on social media, out-of-home such as billboards and displays at train stations, and print mediums until mid-September.

The large-scale, multi-channel campaign covers all major and regional Australian cities and directs audiences to Planet Ark’s Make It Wood website.

Watch The Ultimate Renewable™ TVC here or download via Dropbox here.

Eileen Newbury, National Marketing and Communications Manager of FWPA, urges industry members to work together to share the positive message behind the brand. “As the consumer campaign kicks off, it presents a fantastic opportunity for industry across the entire supply chain to be involved. The videos and brand materials are available for industry to use in their communications, and we’ve produced variations of the logo to suit different industry sectors for use in their own collateral,” said Newbury.

The advertisements offer a fresh new narrative around forestry that most of the public are unaware of – that wood is a continually renewable resource and that trees in Australia’s commercial forests are replanted.

“Extensive research by consultancy Pollinate and many months of planning – and lots of blood, sweat and tears – have gone into these 30 and 15 second clips. FWPA is committed to educating the public that Wood is The Ultimate Renewable™ resource.

“We have invested in this campaign because we believe increased public understanding and acceptance of forestry will benefit our member companies by attracting investment and driving demand for wood and wood products,” concluded Newbury. The Ultimate Renewable™ materials including logos, a 30-second video, a 15-second softwood video and a 15-second hardwood video, can be downloaded on the FWPA website.

Source: FWPA

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Log price drop impacting smaller operators

Stockpiles of pinus radiata logs in China have depressed New Zealand wharf-gate prices by about $US20 ($NZ29.70) during the past fortnight, putting pressure on the jobs of smaller contract logging crews. Anecdotally, four logging crews around Southland and North Otago have been laid off in recent weeks, affecting 20 to 25 staff.

Major estate forest owners are not considering laying off staff, despite the expectation prices will be depressed for the next two to three months. The extra Pinus radiata accumulating on China's wharves is affecting the sector nationwide but should be a ''short-term correction'' that may take until September or October to revive, Southern Wood Council chairman Grant Dodson said.

''Yes, it's the logging crews in the woodlot sector who are most vulnerable,'' he said. The woodlot sector is defined as small farm forestry investments, who are deciding not to engage contractors to cut their forest lots because of the depressed prices. ''The woodlot operators have one opportunity to cut it down, so want to avoid the [low price] trough,'' Mr Dodson said.

Mike Hurring, of Mike Hurring Logging and Contracting, in Balclutha, said all his eight logging crews were intact, relying mainly on working with corporate clients at present. ''We've been riding a good wave prior. It [price] can come back without hurting too much ... it's been pretty good for the past four or five years,'' he said of record prices achieved with mainly China. He understood three crews in Southland and one in North Otago had been laid off.

More >>.

Source: ODT

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ForestTECH 2019 workshops announced

To capitalise on those travelling through to Rotorua, New Zealand and/or Melbourne, Australia to attend ForestTECH 2019 this year, a series of four practical workshops have been set up with forestry companies and key tech providers this year for ForestTECH 2019 delegates. The ForestTECH 2019 series this year runs in Melbourne, Australia on 13-14 November and then again in Rotorua, New Zealand on 19-20 November 2019.

In New Zealand, pre and post conference workshops are being run by the specialist systems integration and information management company, Eagle Technology. Building on the Esri Platform demonstrated at the NZ Esri Users Conference in August, these forestry specific workshops have been designed to meet the growing interest from forestry companies across the country in using geospatial tools and workflows.

Another practical half day workshop is being run on the morning after the ForestTECH 2019 conference in Rotorua. It’s being run by Scion in conjunction with GreenValley International, a US company specialising in advanced but easy to use aerial, terrestrial, and mobile laser scanning technologies. The workshop is designed to showcase new technologies for collecting high-quality 3D forestry spatial data using portable, handheld devices (terrestrial LiDAR Scanning).

In Australia, a half day workshop runs the day before the ForestTECH 2019 conference. It will be covering technology advances that have been made with hyperspectral and thermal imaging for precision forestry operations. Presenters with international / national expertise will also be participating in a consultative forum to identify priority objectives and applications for the forestry sector through the adoption of this rapidly developing technology.

Details for each workshop can now be found on the event website.

Conference programmes for both countries will be uploaded shortly. Note, for two of the workshops, because of the space available at each venue, places will be capped and will be filled on a “first in-first served” basis. Further details on the event will follow.



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Correction on forestry conversion figures

50 Shades of Green supporter, and Wairarapa Federated Farmers Meat and Wool Chair, Mike Butterick, says 30,000 hectares of sheep and beef land between Wairora and Wairarapa in New Zealand are being converted to forestry this year.

The truth is that there have been only three Overseas Investment approvals of farmland for conversion to forestry since the Ministerial Direction on Forestry was issued in October 2017.

The first was for Countess Veronika Leeb-Goess-Saurau. This is for 1,280 hectares of afforestation, with a value of about NZ$10.7m for the land to be planted.

The next two were for sales of farmland to Singapore based Te Au Ltd, for a total of less than 1,235 hectares in Wairoa and Eketahuna (the Ekatahuna land has an undisclosed area of native bush which is to be retained). The value of the land to be planted is about NZ$6.4m.

Thus, the total OIO approved area to be planted is less than 2,515 ha which is only 8.4% of the land being converted to forestry in the region if Federated Farmers’ estimate is correct. The total land for conversion value is about NZ$17m.

This can be contrasted with the NZ$3.6b overseas investment approved in New Zealand since January, including the sale of New Zealand New Milk for NZ$136m and TradeMe of a billion dollars.

Source: Forest Owners Association

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More logs on trains in the Wairarapa

Moving another 100,000 tonnes of logs by rail from the Wairarapa to CentrePort benefits the region and means 6,000 fewer truck trips annually, New Zealand’s Forestry and Associate Transport Minister Shane Jones says.

Minister Jones, along with representatives from KiwiRail, CentrePort, the forestry sector, and councils attended an event in Masterton on Tuesday to mark the start of larger log trains from the Waingawa rail hub which will be able to carry 40 per cent more logs to Wellington’s port.

“The industry has been clear there is a lot of potential to grow harvest export volumes from the Wairarapa, but not without beefing up the supply chain. KiwiRail has stepped up, adding wagons to their trains to carry around 100,000 tonnes more logs to CentrePort each year,” Shane Jones said.

“Not only are these log trains supporting the forestry industry to get its goods to market, the increased rail capacity reduces carbon emissions and will see 6,000 fewer logging truck trips annually across the Remutakas and into central Wellington.

“Log harvests in the south eastern section of the North Island are predicted to increase to 1.65 million tonnes in the next five years and stay that way into the 2030s. Trucks alone won’t be able to manage the future harvest volumes.

“I see a real opportunity to get even more export logs onto rail. We need to take a more inter-modal approach to transport and make greater use of rail and hubs like Waingawa, and KiwiRail are already beginning discussions with CentrePort and the forestry sector on possible further increases.

“That’s why the Government, through the Provincial Growth Fund, has invested NZ$6.2 million in reopening the Napier-Wairoa line and establishing a log hub at Wairoa. There’s also NZ$4 million funding earmarked for a log hub in Dannevirke, and NZ$40 million for a road-rail freight hub near Palmerston North.”

Greater use of rail makes the supply chain more resilient, which is crucial for New Zealand as an export led-economy. Earlier this year road works on the Rimutaka Hill Road stopped trucks getting logs to port, creating big problems for the forestry and trucking industries.

"This mode neutral approach helps realise the Government’s ambitions to grow our forestry sector, reduce emissions, and get rail back on track.” Shane Jones said.

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NZ pine market in China shifts

Several cascading effects have impacted Chinese markets for NZ pine logs in Q2 CY19, which will have ramifications throughout Q3 CY19. Some of these impacts are seasonal and some represent structural changes that have been building for the last few years. Cumulatively, these changes have shifted the NZ pine market in China to one of oversupply.

See the attached update from China Forestry Group New Zealand Company Ltd.

Download the report

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"When Forestry was Fun" launched

Rotorua’s 95-year-old Jim Spiers has recently published his book, When Forestry was Fun. The Evolution of a forest engineer. Jim was on hand at last week’s HarvestTECH 2019 event to give a quick and lively run down of his time in the forestry and logging industries – as well as catching up with many old friends and acquaintances who were at the country’s major logging event.

The book (incredibly good buying at just NZ$25 - no GST applies) combines a good yarn with Jim’s wealth of knowledge and experience to record developments in forestry and logging, from the early 1940s to the mid-1980s.

His personal story traces developments from horse logging in the Tapanui District of West Otago in 1941, to the post-WWII focus on measurement and management of indigenous forestry. Then, with three university degrees related to forestry management behind him, he ran Whirinaki Forest in the Urewera before taking over management of New Zealand’s largest exotic forest at Kaingaroa. He held this position for nine years.

Appointed as inaugural director of the newly formed Logging Industry Research Association (LIRA) Jim remained in this role for a further nine years before retiring in 1984. Limited copies are still available and will be sold on a first come – first served basis.

If interested in securing a copy, the order form is attached here.

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Hikurangi FF sale goes through

The sale of East Coast-based forestry business Hikurangi Forest Farms to Eastland Estate Limited has been approved by the Overseas Investment Office. HFF general manager Ian Brown paid tribute to previous owners Samling Group for the development of the forest over the last 22 years, building it into the world-class forestry asset it is today.

Mr Brown said staff would transition to the new owners and it would be business as usual for the new entity, which became known as Aratu Forests Limited from Monday 1 July. “I am looking forward to working with the new owners to take the forest and the business into the future,” he said.

The sale price has been withheld under the Official Information Act. It includes about 35,071 hectares of freehold, leasehold and forestry rights land in the Gisborne region, New Zealand.

Hikurangi Forest Farms is now owned by Eastland Estate Limited, which is made up of TLP3 Radiata Ltd, Canada (25.8095 percent); ANZFOF3 NZ Pty Limited, which is ultimately owned by The Trust Company (Australia) Limited as trustee for the New Forests Australia New Zealand Forestry Operating Fund 3 (60.4824 percent), which is wholly owned by certain overseas investment funds (The New Forests Australia New Zealand Forestry Operating Fund 3 is managed by New Forests Asset Management Pty Limited); and Samling Global Limited, Malaysia (13.6271 percent).

It was sold by TreeOne (Malaysia) Sdn Bhd, which is 100 percent owned by Samling Global Limited, Malaysia. Eastland Estate is an investment vehicle managed by New Forest Asset Management Pty Limited, which intends to continue to use the land for maintaining and harvesting crops of trees as part of existing commercial forestry operations.

Source: gisborneherald

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Australian Pine Log Price Index report released

The latest Australian Pine Log Price Index for the July to December 2018 period has just been released. The Australian Pine Log Price Index is compiled by KPMG using data provided by Australian softwood growers. The Index documents changes in pine log prices achieved by large-scale commercial plantation owners selling common grades of plantation softwood logs to domestic processors.

KPMG updates the Index biannually, with the two reporting periods being January to June and July to December. The Index has a base period of January to June 1998. KPMG acts as the independent Index manager and collects confidential data on log volumes and stumpage values for all sales, including long and short-term contracts and spot transactions, at the end of each reporting period. Quantity information on export sawlogs and export pulpwood is also provided.

This report presents a summary of the results of the Index report released for the periodJuly to December 2018. The findings in this report are based on data provided by HQPlantations, Forestry Corporation of NSW, HVP Plantations and OneFortyOne Plantations.

The report is attached here for your information.

Source: KPMG



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China imports of U.S. forest products fall US$430m

China’s imports of U.S. forest products fell by US$430 million dollars in the first four months of 2019. The U.S. market share fell by 35 per cent, while Canadian and Russian exporters have increased their shares since 2018, reports the Wood Resource Quarterly (WRQ).

The trade war between the U.S. and China has not only resulted in higher costs for U.S. consumers on home appliances, electronics, apparel, footwear, and industrial machinery, but has also impacted U.S. exporters of forest products to China. China’s economy slowed during 2018 and early 2019, causing the total value of imported wood pulp, lumber and logs to decline by just over 10 per cent from the first four months of 2018 to the same period in 2019, reports the WRQ. Simultaneously, forest product imports from the U.S. fell by almost 42 per cent in value.

From January to April, 2019, China imported logs, softwood lumber, and pulp from the U.S. collectively valued at 600 million dollars. This is down from $1.03 billion dollars’ worth of forest products imported during the same period in 2018. The biggest declines in import value of U.S. forest products from the 1Q/18 to the 1Q/19 have been those of wood pulp and hardwood logs, falling $220 million and $110 million, respectively.

With forest product imports from the U.S. deteriorating and American wood product exporters losing market shares in the Chinese market, imports from other countries, including Canada and Russia, have fallen less or even expanded the past year. While the U.S. market share for forest products imports has fallen by 35 per cent from the first four months of 2018 to the same period in 2019, Canada’s and Russia’s shares have gone up by 12 per cent and 4 per cent, respectively.

Supply of softwood logs and lumber from Canada, in particular, has increased in 2019, with import volumes of logs increasing 25 per cent year-over-year, and lumber imports increasing 54 per cent in early 2019 as compared to early 2018. In addition, there has also been a rise in shipments of both logs and lumber from Europe since the trade conflict started in the summer of 2018.

Even if the trade negotiations between the U.S. and China result in lower or eliminated tariffs in the future, the new supply sources that Chinese forest products importers have developed during the on-going trade dispute will likely remain, permanently changing historic trade flows to China.

Source: Wood Resource Quarterly



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100% responsibly sourced timber for metro project

Metro station canopies and multi-story parking façades recently completed as part of the Sydney Metro Northwest project have been constructed with 100% responsibly sourced timber, according to certification body SCS Global Services (SCS).

The wood used at seven stations has been certified by SCS under Programme for the Endorsement of Forest Certification (PEFC) and Responsible Wood (RW) Chain of Custody Project Standards, and one additional station has been certified with a Forest Stewardship Council® (FSC®) Partial Project Certificate.

Additionally, the timber used on four multi-story parking structures, with space for more than 4,000 vehicles, has also been certified as responsibly sourced under the PEFC and RW Project Standards. The Sydney Metro Northwest project is the first project of its kind to earn a responsible timber project certification. Transit operations commenced within the system on May 26, 2019.

The principal contractors, John Holland and CPB Contractors as part of the Northwest Rapid Transit Consortium’s Infrastructure Joint Venture, sourced timber from FSC and Responsible Wood certified forests in New South Wales. They also tracked the material through the primary saw mills and timber wholesalers to the fabricators and installers of the timber batten ceilings and façades: Brighton Ceilings Pty Ltd and Foxville Projects Group (NSW) Pty Ltd.

SCS Global Services conducted the certification assessments under the PEFC/RW and FSC standards. Independent, third-party certification ensures that timber comes from responsibly managed forests, and that transparency has been maintained throughout the supply chain. Since the first FSC project in Australia in 2010, SCS has certified all FSC and or PEFC/RW projects in Australia.

John Holland Sustainability Manager Thirukumaran Jallendran said - “The Sydney Metro Northwest project is a milestone for Australia, and we are proud that it reflects the country’s responsible sourcing goals. It was a complex undertaking, and it is very rewarding to see it completed. SCS helped ease the certification process and enabled us to be the first to achieve a project certification of this magnitude. We hope to set the precedent that project certification is a significant and worthwhile endeavour for other Australian projects.”

SCS Global Services Lead Auditor Nick Capobianco said - “Projects of this scale and profile are key to driving change in supply chains and educating stakeholders, suppliers and the general public about sourcing responsible forest products. Third-party certification was essential for this large-scale project to meet Infrastructure Sustainability Council of Australia rating tool requirements as it enabled Sydney Metro to demonstrate responsibly sourced timber with a backed guarantee from SCS’ audits.

Source: ajot.com

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Female forestry training receives funding

The NZ Government is supporting a primarily female training programme in Northland that will help address labour shortages in the male-dominated forestry industry, Regional Economic Development Minister Shane Jones and Employment Minister Willie Jackson announced.

The Provincial Growth Fund (PGF), through the He Poutama Rangatahi (HPR) programme, will invest NZ$421,050 in Wahine Toa, a five-month intensive pilot initiative to prepare mostly young women for training and employment in the forestry sector. The initiative launched on Monday in Kaikohe.

“Investing in skills and training is a clear priority for this Government and I’m pleased to see both HPR and the PGF’s other employment scheme, Te Ara Mahi, already making a difference to people’s lives up and down the country,” Shane Jones said.

“As Forestry Minister, I know labour shortages are a significant concern for the sector so initiatives like Wahine Toa are a great investment. The industry is also trying to encourage more women into forestry so this programme ticks both boxes.”

“We know that supporting young people into long-term jobs delivers benefits for the whole community,” Willie Jackson said. The programme will be predominantly women, but has a small cohort of men who will be in a separate crew. “It’s great to see programmes aimed at encouraging more women into the male-dominated forestry industry and I wish the participants every success”.

“Wahine Toa is modelled on the Eco Toa (Ecological Warrior) initiative, another HPR programme funded through the PGF that was announced in March this year. The initiatives focus on rangatahi aged between 16 and 24 who not in education, employment or training (NEET). Through training, individualised pastoral care and financial support, both programmes help young women get onto a path to sustained employment.

Source: Scoop

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Malcolm Alexander steps down from Norske Skog

The Australian Forest Products Association (AFPA) and Softwoods Working Group (SWG) have congratulated Norske Skog’s Malcolm Alexander on a terrific career, spanning more than 40 years in Australia’s forest industries. Malcolm finished up last week with Norske Skog in Albury, where he has held senior positions since December of 1993.

“Malcolm has always been and will continue to be a great advocate for forestry, timber processing and pulp and paper manufacturing in Australia,” Acting Chief Executive Officer of AFPA, Gavin Matthew said today.

“After studying forestry at the Australian National University (ANU) in the 1970s, Malcolm worked in Victoria and Tasmania with Australian Paper Manufacturers (APM), Huon Forest Products and Australian Newsprint Mills (ANM), before heading to Albury NSW and going on to work with Norske Skog.

“Australia’s forest industries are very lucky to have many loyal servants like Malcolm and on behalf of AFPA, I wish him all the best in the future. This will be a future, he assures us, won’t be without some sort of involvement in industry,” Mr Matthew concluded.

“On behalf of SWG, I congratulate my great mate Malcolm for his work and service to forest industries in the South West Slopes region,” SWG Chair, Peter Crowe said. “Malcolm is one of those industry characters you love working with and he’ll certainly be missed in industry and in the community. We wish Malcolm all the very best for the future and hope after full-time work he can still find time to be involved in our renewable industries in some way,” Mr Crowe concluded.

Source: AFPA

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... and one to end the week on ... road painting

The foreman of an Irish road crew employed Paddy To paint the white lines down the middle of the road.

He told Paddy that he should paint two miles of road in a day’s work.

After the first day the foreman was pleased to find that he'd painted four miles of road instead of the two required.

On the second day, Paddy completed painting just 2 miles of road, the foreman was a bit disappointed but didn’t complain as this was, after all, only what he’d asked for.

On day 3, the foreman was disappointed to find that Paddy had painted only one mile of road, and so asked, "On yer first day, ya did four moiles o’ road.

On yer second ya did two moiles. But on yer tird day ya only did one moil. What’s up?”

Paddy replied, "Well, oil tell ya what’s up,but I tought a clever bloke loik you woulda been able ta figger it out fer yerself!

Yer see, every day I gets ferder an’ ferder away from de paint can!”



And one more for you. A young engineer was leaving the office at 5.45pm when he found the CEO standing in front of the shredder with a piece of paper in his hand.

“Listen,” said the CEO. “this is a very sensitive and important document,and my secretary is not here. Can you make this thing work?”

“Certainly,” said the young engineer. He turned on the machine, inserted the paper and pressed the start button.

“Excellent, excellent!” said the CEO as his paper disappeared inside the machine, “I just need one copy.”

Lesson: Never, never assume that your boss knows what he is doing.






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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