WoodWeek – 23 August 2017

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Greetings from your WoodWeek news team. The price for structural S1 logs lifted slightly to $127 a tonne this month, up 10 per cent on last year, according to AgriHQ. New Zealand's economy is being buoyed by increased construction activity. Meanwhile, wood manufacturers say their growth is being unfairly squeezed by competition from subsidised overseas rivals for export wood products – especially those from Canada.

In Canada, New Zealand’s biggest rival for exporting lumber to China, the Government, which owns most of the country’s forests, requires Canadian sawmillers to be able to buy logs at 60% of the export price, says Brian Stanley, chairman of the Wood Council. Access to cheaper logs helps Canadian sawmills pay China’s 17% tariff on lumber, making them stiff competition for Kiwi mills.

Sadly, two young men have died in forestry workplace accidents in the past 5 days. This is a tragic outcome as our industry is moving to put more systems in place; we ask ourselves how these tragedies occurred. People across the forestry workplaces will be looking to gain insight from the investigators and through the SafeTree website as soon as the information becomes available. Both deaths involved men working on heavy machinery in the forest.

Business as usual in the construction industry is getting something of a shakeup, as emerging trends in materials, technology and construction systems come together to create a whole new paradigm – specifically around timber, says Dr Perry Forsythe, Professor of Construction Management at the University of Technology in Sydney.

There is growing interest in wood for mid-rise buildings. For three to five storey buildings, he says we will see more use of timber-framed construction. Companies that can deliver prefabricated systems for framed construction will be well positioned to succeed as densification gathers momentum.

Dr Forsythe says because timber is easy to machine, it works well with the concurrent trend in architecture and design for the use of building information modelling and other 3D design modelling technologies.

Innovatek will be bringing a wide range of industry players together to share success stories at the “Changing Perceptions in Engineered Timber in Construction” conference on 28 September in Rotorua (see www.cpetc2017.com). See more information in today’s news.

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Record high log prices

NZ structural log prices hit new record on rising domestic demand - New Zealand structural log prices hit a new record as local mills compete with the export market to secure supply to meet the demand from the busy domestic construction market.

The price for structural S1 logs lifted to $127 a tonne this month, from $124 a tonne last month, and $115 a year earlier, according to AgriHQ's monthly survey of exporters, forest owners and saw millers.

New Zealand's economy is being buoyed by increased construction activity as record levels of tourism and migration stoke demand. However local wood mills are having to compete for log supply with the export market, with the price for S1 logs creeping above the price of export A-grade logs in AgriHQ's latest data for the first time since late last year.

"A consistently firming export log market has driven increases in structural log prices in recent months, though positive housing construction rates locally have been key to mills being able to stomach these increases," said AgriHQ analyst Reece Brick. "The short-term outlook is for either a steady or slightly firmer market, where the exchange rate movements will likely be key to the competitive pressure between the local and export markets."

Brick said the closing valuation between wharf gate and domestic values may indicate some stabilisation in the market towards the end of the year, assuming no major change occurs in the export market.

Log values at the wharfgate slipped by around $2 a tonne this month according to most of those surveyed by AgriHQ, hurt by a rise in the New Zealand dollar exchange rate with the US dollar through mid-July to mid-August to peak at a 28- month high of 75 US cents. However, the report noted that the exchange rate is now tracking downwards.

"Any concerns towards future easing of this market are minimal," Brick said. "There's little to no concerns regarding the state of overseas log markets for the short-term."

In China, New Zealand's largest log market, the price for unpruned log grades rose US$2/JAS, marking the 13th consecutive month without any weakening, Brick said.

Meanwhile, shipping rates were stable, following ongoing stability in world oil prices, Brick said.

"Exporters are anticipating shipping rates to stay locked in position as we approach the end of the year," he said.

Forest products are New Zealand's third-largest commodity export behind dairy and meat products.

Source: BusinessDesk via Scoop

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Raw export deal say wood manufacturers

The forestry sector says its growth is being unfairly squeezed by competition from subsidised overseas rivals.

Log prices may be good, but foresters say they will struggle to reach bullish export growth targets over the next five years because of subsidies paid to overseas rivals, which may be challenged through the World Trade Organization (WTO). The forest and wood-products industry strategic action plan, published in 2012, set a target to lift exports from $4.5 billion in 2011 to $12 billion by 2022. But exports amounted to just $5.4 billion in the year to June 30.

“I don’t believe that goal is ever going to be achieved,” says Brian Stanley, chairman of the Wood Council of New Zealand, which represents the country’s forest and wood products industry. “It’s pie in the sky now.”

Stanley says most of the export growth was forecast to come from getting more value from logs, but processors, facing price competition from overseas rivals who get government subsidies, aren’t investing. Chinese buyers, in particular, can afford to pay more than local buyers for logs because of subsidies helping to cut the cost of power, transport, land and tax, he says. “If you are manufacturing your sawn lumber in subsidised sawmills, you can afford to pay a bit more for your logs.”

In China, the world’s largest construction market, demand for wood has increased since timber-harvesting quotas were reduced and commercial logging of its remaining natural forests was banned to help protect the environment. As part of the changes, China reduced tariffs on imported logs from 13% to 11%, further widening the margin with sawn lumber, which attracts a 17% tariff.

“They are setting up a supply chain globally of getting logs to China, and so they are coming to places like New Zealand and paying more for their logs than our people can really afford to pay, because the logs are going into subsidised mills,” Stanley says. “We are seeing very little investment in sawmilling, because they can’t compete in the global marketplace.”

In Canada, New Zealand’s biggest rival in the lumber market in China, the Government, which owns most of the country’s forests, requires Canadian sawmillers to be able to buy logs at 60% of the export price, says Stanley. Access to cheaper logs helps Canadian sawmills pay China’s 17% tariff on lumber, making them stiff competition for Kiwi mills.

Source of tension - New Zealand isn’t the only country being hurt by Canadian subsidies, which are an ongoing source of tension with the US under the North American Free-Trade Agreement. This year, in retaliation, President Donald Trump slapped a tariff of up to 24% on Canadian lumber imports.

In New Zealand, the Wood Processors & Manufacturers Association, which Stanley also chairs, wants the Government to consider taking a case to the WTO. The association has taken legal advice on the potential for a case and met Trade Minister Todd McClay and Ministry of Foreign Affairs and Trade (MFAT) officials last month to discuss the issue. “We believe there is an opportunity for New Zealand to go to the WTO,” Stanley says.

McClay says the issues the forestry sector faces are complex and often multifaceted, but he has directed MFAT to invest effort in working with wood processors and forest owners to better understand the challenges they face and find the solutions in the WTO and bilaterally to help level the playing field. “This is an important industry and they have my support to boost exports of value added products via our trade relationships.”

Until these barriers are sorted out, Stanley says, the industry here is not going to pony up with the money needed for new plant that would help drive exports higher.

“Wood processors can’t get access to long-term contracts for logs or raw material, and so nobody is going to invest big licks of money unless they have a guarantee that they have a supply of raw material. The playing field is tilted so heavily against them globally and also locally that they just won’t invest the money to increase the output of sawn lumber or other added-value wood products in New Zealand.”

Forestry products are New Zealand’s third largest export commodity and the prospect of the industry languishing as a low-value commodity producer won’t be welcome news for the Government, which has set a target to double the value of primary-sector exports by 2025, largely through adding more value to the commodities we produce.

One company that has bucked the trend and opened a new mill this year is Red Stag Timber in Rotorua, whose $100 million investment in a “super-mill” enables it to process more than a million logs a year more cheaply. Still, Stanley says that mill has focused its attention on meeting demand in New Zealand and Australia, eschewing bigger markets such as China where it can’t compete.

Potential Opportunities - Stanley isn’t all doom and gloom, though. If trade barriers can be overcome, he sees big potential opportunities for the wood processing industry in engineered wood products, such as cross-laminated timber, which are becoming increasingly popular for multi-storey buildings around the world. They are also gaining traction in New Zealand because recent earthquakes showed wooden buildings outperformed concrete and steel structures.

Dubbed “plyscrapers”, these buildings are attracting innovative big-name designers such as Pritzker Architecture Prize-winning Japanese architect Shigeru Ban, who created Christchurch’s Cardboard Cathedral. Ban’s 19-storey Terrace House project planned for Vancouver is billed as the world’s tallest hybrid timber structure, with a pioneering hybrid structure of wood, concrete and steel.

In Wellington, plans are afoot for the country’s biggest wooden high-rise. Details remain under wraps ahead of an announcement at Parliament.

Given New Zealand’s housing shortage, Stanley sees further potential for the development of other wooden high-rise buildings, and the industry is working with the Ministry of Business, Innovation and Employment to get new building standards in place to smooth the way.

Still, if the playing field isn’t levelled, Stanley believes the outlook for the industry here isn’t that good.

“We have got a tilted playing field globally and we have also got a tilted playing field in New Zealand in terms of competing for our raw materials,” he says. “You are not going to see any step change unless the Government can pull some levers that will make the climate right and level the playing field.”

“We are seeing very little investment in sawmilling, because they can’t compete in the global marketplace.”

Source: Wood Processors & Manufacturers Association (WPMA)

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Two forestry workplace deaths

An extended East Coast family is reeling after losing a second member to a forestry tragedy within the past year.

Te Oho Mauri Piripi ("Piri") Bartlett, 23, died in a remote forestry area in Tauwhareparae, near Tolaga Bay, north of Gisborne, on Monday.

Bartlett was related to Niko Brooking-Hodgson, 24, a talented rugby player who died in the Pohakura Forest in northern Hawke's Bay a year ago on Tuesday.

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Last week a 20 year old man died in Marlborough.

A man has died after a log hauler rolled off a forestry track in Marlborough.

The 20-year-old was operating the wheeled log hauler when it came off the track near Blowhard Ridge in the Wairau Valley, about 40 kilometres west of Blenheim.

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New simulators from Komatsu Forest

Komtasu Forest have released two new forest machine simulators - including a full- sized KF 500 simulator and the KF 50 laptop model

The new models include many new functions for improved functionality and performance. Both simulator models have new software and include the latest machine models for both harvester and forwarder simulation. The simulators also offer several different machine options to choose from, such as standard crane and combi crane, S-type and C-type heads, and with or without multi-tree handling. A new feature is the VR option, which uses virtual reality technology to improve the simulator experience.

The simulators include a Forest Editor, which enables the user to generate landscapes and forest stands. In this way, users can create forests that exactly match their usual working environment regarding tree species, terrain and forest density.

All simulators also have a multiplayer function, which means two simulators can operate in the same virtual environment, enabling a harvester and a forwarder to work together. The multiplayer mode includes statistics reflecting the team's results – a function that can encourage further improvements in performance. One can even choose to add an instructor station, which enables an instructor or experienced simulator operator to get a better and more dynamic overview of and interact with the other operators.

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Technology taking timber taller

Business as usual in the construction industry is getting something of a shakeup, as emerging trends in materials, technology and construction systems come together to create a whole new paradigm – specifically around timber.

Dr Perry Forsythe, Professor of Construction Management at the University of Technology says that in terms of construction materials, there is growing interest in timbers generally.

For three to five storey building, he says we will see more use of timber-framed construction. This market, particularly multi-residential mid-rise, will grow with the densification of our major cities. Companies that can deliver prefabricated systems for framed construction will be well positioned to succeed as densification gathers momentum. “A few companies will be the trend-setters, then there will come the fast-adopters,” says Dr Forsythe.

Because timber is easy to machine, it works well with the concurrent trend in architecture and design for the use of building information modelling and other 3D design modelling technologies. The more advanced construction companies will also see the value-add of such approaches in terms of faster erection of load-bearing walls and flooring and an overall more continuous construction process.

In Australia, leaders like Strongbuild, Lendlease, Impresa House, Timberbuilt Solutions and Sekisui House’s Shawood operation are creating a real stir with projects that showcase how new engineered timber products combined with 3D design modelling and high-tech manufacturing technologies can achieve more cost-effective and efficient project outcomes.

Just recently in New Zealand, Sir Bob Jones announced his plans to build a timber office building in central Wellington, making for an exciting week for tall timber. Jones’ announcement coincides with news of Ara Institute of Canterbury’s new, three storey, 6500 square metre architecture and engineering building. The designers, Jasmax, deployed new innovative wood building technologies.

The upcoming national building industry conference, entitled “Changing Perceptions of Engineered Timber in Construction” will be focused on ‘The Advantages of Timber in Mid-Rise Construction’. It's the second annual conference for Innovatek in commercial wood building and will be held in Rotorua on 28 September. The diverse programme attracts building owners, developers, architects, engineers, specifiers and key engineered wood suppliers.

Conference organizer John Stulen says, “Australian companies like Lendlease and Strongbuild have moved quickly and decisively in the tall timber building game. They’re well ahead of their New Zealand counterparts in commercial gains. So, Jones’ decision to go big with a wood structured tall office building augers well for the whole sector in this country.”

The conference is set to be part of a wood technology week of events coming to the city in September, including the FIEA WoodTECH 2017 two-day conference and trade expo. Rotorua Lakes Council are event partners promoting their successful “Wood-First” policy. For more details see: www.cpetc2017.com.

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Foresters appoint manager

The NZ Institute of Forestry (NZIF) Council is pleased to announce the appointment of Tim Thorpe as General Manager of NZIF, a part time role with the goal of growing benefits to members.

Tim is a past president of the NZIF and previously chair of the Registration Board. He has been deeply involved in the New Zealand forestry sector, as well as working overseas. He has experience in plantation forestry, indigenous and tropical forestry as well as wood processing/utilisation both within government and in the commercial sector.

“Tim has an ideal background for this role,” said James Treadwell, NZIF President.

“The NZIF Council has identified the need for this position in recent years and I am looking forward to working with Tim.”

Tim took up the role in mid-August. He will be based in the NZIF office in Wellington. He can be contacted on gm@nzif.org.nz or (021) 895 980.

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Project brings DNA screening technology

FWPA Research Project - “Implementation of marker-assisted selection (MAS) in Australia’s major plantation eucalypts” - The project led by researcher Gondwana Genomics has completed a key test of new DNA marker technology for commercial applications. The project is aimed at implementing MAS to rapidly increase productivity in Australia’s major plantation eucalypts.

Outstanding trees in breeding programs are currently identified by growing and measuring thousands of trees in trials to identify elite families from which parents are chosen. However, just as in human families, there is considerable variation in the offspring of these crosses, which currently can only be identified by growing the progeny until 7-8 years of age and then measuring them.

The project has demonstrated that it can identify elite E. globulus and E. nitens families and the best individuals in those families by using a simple DNA test. The DNA test involves screening trees with thousands of targeted DNA markers, or SNiPs, that occur in genes that control key commercial traits like wood density, growth and pulp yield.

Using only the DNA from parents in E. nitens and E. globulus seed orchards of Forico and HVP, scientists on the FWPA project were able to predict elite trees among progeny from different trials with very high accuracies. Correlations comparing predicted performance (just using DNA) with Estimated Breeding Values (EBVs) ranged from 0.7 - 0.9, which is an outstanding result.

This same marker technology also allows for fingerprinting to identify labelling errors, identification of inbred trees and full pedigree reconstruction, all in the same cost-effective test. Marker technology can be used to complement the traditional breeding and increase the efficiency of tree breeding.

These results demonstrate that DNA markers can be used to screen large numbers of seedlings raised from open pollinated and controlled crosses to select superior progeny. This will allow identification of superior trees for breeding when they are seedlings.

Andrew Jacobs, Research and Innovation Manager at Forico, one of Australia’s largest private forestry management companies, says, “The results are very exciting and Forico remains committed to applying the technology to support our traditional breeding programs as MAS is likely to deliver significant productivity gains through the shortening of the breeding cycle.”

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Forest sale awaiting OIO approval

The sale of Whanganui District Council forestry to a foreign buyer has been delayed as it waits for Overseas Investment Office (OIO) approval.

A buyer has been lined for four of the district's forests - McNabs, Te Ara To Waka, Sicilies and Tauwhare - for the past few months and a decision had been expected by now.

Council property general manager Leighton Toy said the OIO's decision would be now be known later this year.

"The OIO has issued the forestry company a further request for information for its application," he said.

"This is likely to delay the sales process, and we will know more by October."

The identity of the purchaser remains confidential until the sale is finalised - as does the purchase price - but is believed to be part of a Japanese-based forestry investor.

In March the council's joint forestry committee is to ask council for a top-up of $250,000 to its budget to help cover costs associated with the sale - some of which will be recovered from the purchaser.

The council is also selling 30,000 carbon credits which are not part of the forestry sale. Council is waiting for the price of the credits - currently about $18 - to rise before it sells.

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Source: Wanganui Chronicle

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Tasmania RFA extended

An extension of a Tasmanian forestry plan has been hailed by government as a win for the timber industry but environmentalists say it's a death knell for parts of the state's pristine forests.

Prime Minister Malcolm Turnbull and Tasmania Premier Will Hodgman on Friday visited a Launceston timber mill where they signed off on a 20-year extension to the Regional Forest Agreement.

The agreement, which was due to expire this year, allows the logging of native forests on public lands, and gives exemptions to Commonwealth environmental laws.

Mr Turnbull spoke to workers on a tour of the plant and said the deal will give security to the industry, which employs some 3,600 people in the state. "This is supporting Tasmanian jobs - that's what this is all about," he told reporters.

The government said the agreement includes upgrades which better safeguard endangered species, mitigate climate change and create greater transparency around logging practices.

But environmental groups have labelled it a "death warrant" for the state's wild forests.

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Felled tree damages house

A family bach in the Marlborough Sounds is a "write-off" after being speared by a felled tree trunk.

The 80-year-old holiday home at South East Bay, in Pelorus Sound, was effectively pierced by the "massive" log as it came crashing through the living room and one of the bedrooms.

Bach owner Gail Earle, of Nelson, said it was a miracle nobody was home, while the forestry block manager said he had never heard of anything like it before.

The pine tree was cut down by forestry workers who then called the family on Wednesday to say what had happened.

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Timber trade controls tightened

APEC Tightens Illegal Timber Trade Controls — Shipments of lumber, furniture and other wood products sourced from the Asia-Pacific’s protected but dwindling forests are worth hundreds of billions of dollars annually and on the increase. The introduction of enhanced customs checks in APEC could mark a turning point in efforts to combat this scourge.

Demand within APEC member economies, which account for half of the world’s forest cover and 80 per cent of global timber trade, underpins the industry’s black market. The ease with which unlawfully harvested cargo can move across borders and into the homes and offices of consumers is allowing illegal wood trade to flourish at great cost to the region.

The extent of the challenge has prompted APEC forestry, trade, customs and law enforcement officials meeting this week in Ho Chi Minh City, a major timber processing and trading center, to tighten customs controls against the flow of illegal goods within the sector.

“Trade in illegal wood is accelerating biodiversity loss and destabilizing forest- dependent communities around the Asia-Pacific,” explained Dr Nguyen Van Ha, Deputy General of Viet Nam’s Forestry Administration. “The economic consequences are significant.”

They include depriving economies of revenue derived from legal and sustainably managed forests, and undermining legitimate businesses by negatively affecting the price of legally harvested products. Spotting illegal wood before it goes to market is an underlying problem.

“Timber is hard for customs authorities to inspect and verify because of its diversity of species, types and names,” said Vu Ngoc Anh, Chair of the APEC Sub- Committee on Customs Procedures. “We are working in APEC to tackle knowledge and technology gaps at border checkpoints to improve capacity in the region to thwart illegal timber and wood product shipments,” continued Vu, who is also Deputy Director-General of Viet Nam Customs.

There are as many as 100,000 tree species worldwide. Officials are refining their targeting and forensic identification methods to more accurately and efficiently distinguish between legal and illegal wood at their borders—from taun flooring, rosewoodfurniture and ramin toys, paint brushes, blinds and billiard cues, to paper, sawdust and composite wood products.

“The importance of customs and enforcement agency cooperation in APEC to securing wood trade can’t be overstated,” said Jennifer Prescott, Assistant United States Trade Representative for Environment and Natural Resources and a co- sponsor of the project. “As illegal wood trade grows in sophistication, it is vital that we grow the sophistication of our tools to address it.”

This includes public-private coordination underway to align the region’s wood product certification programs, compliance and product legality monitoring approaches, and traceability systems—following the production and distribution networks that bring illegal timber to international markets.

Officials are also sharing guidance to inform their handling of these shipments upon discovery as well as to support more effective preventative action. They are focused on opening lines of communication to curb fake document use, bribery and corruption linked to high level perpetrators of illegal timber trade.

“Trust between all those monitoring the supply chain and enforcing laws is ultimately needed to reduce and eliminate illegal wood trade,” noted Davyth Stewart of INTERPOL's Environmental Security Program. “Without it, breakthroughs will remain elusive.”

“Customs are the first and last line of defence against timber smuggling, fraud and illegalities during export, re-export, transit and import but they can’t operate in a vacuum,” echoed Dr Federico López-Casero of the Institute for Global Environmental Strategies.

Ministers Responsible for Forestry from APEC economies will meet in Seoul, Korea on 30 October-1 November 2017 to advance and build upon these policy solutions.

Source: APEC Experts Group on Illegal Logging and Associated Trade

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Buy and Sell

... and finally it's 'pet jokes' week

Not really, but here goes anyway:

A poodle and a collie are walking together when the poodle suddenly unloads on his friend. “My life is a mess,” he says. “My owner is mean, my girlfriend ran away with a schnauzer and I’m as jittery as a cat.”

“Why don’t you go see a psychiatrist?” suggests the collie.

“I can’t” says the poodle. “I’m not allowed on the couch.”


Top 10 reasons why dogs are better pets than cats

1. Dogs will tilt their heads and try to understand every word you say. Cats will ignore you and take a nap.

2. Cats look silly on a leash.

3. When you come home from work, your dog will be happy and lick your face. Cats will still be mad at you for leaving in the first place.

4. Dogs will give you unconditional love until the day they die. Cats will make you pay for every mistake you've ever made since the day you were born.

5. A dog knows when you're sad. And he'll try to comfort you. Cats don't care how you feel, as long as you remember where the can opener is.

6. Dogs will bring you your slippers. Cats will drop a dead mouse in your slippers.

7. When you take them for a ride, dogs will sit on the seat next to you. Cats have to have their own private basket, or they won't go at all.

8. Dogs will come when you call them. And they'll be happy. Cats will have someone take a message and get back to you.

9. Dogs will play fetch with you all day long. The only thing cats will play with all day long are small rodents or bugs, preferably ones that look like they're in pain.

10. Dogs will wake you up if the house is on fire. Cats will quietly sneak out the back door.

Have a safe and productive week.

John Stulen

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