WoodWeek – 13 September 2017

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Greetings from your WoodWeek news team. It’s all on this month. FIEA’s WoodTECH conferences in Melbourne and Rotorua, plus our Changing Perceptions conference on engineered wood building on the 28th. Oh, yes and there is an election coming too apparently. Some big forestry promises on offer too! Sticking with reality for now and NZTE, the department that encouraged a Chinese company to invest multi-million wood processing plant in Kawerau, is now looking to see if there is enough available wood fibre to supply the plant.

At their annual foresters conference in Rotorua last week, NZIF president James Treadwell announced their coveted 2017 NZIF Forester of the Year award. The deserving winner was long-time passionate forestry industry champion Garth Cumberland. Their conference was well attended by young and old members alike, with a focus on the future of forestry.

In Australia’s Green Triangle forest region, progressive forest owner, OneFortyOne Plantations announced it is in advanced discussions to acquire the Jubilee Highway sawmill in Mount Gambier and woodchip operations at Portland from Carter Holt Harvey. The company recently confirmed it is also evaluating the feasibility of its proposed greenfield particle board mill.

Also in Australia, ForestWorks, working with AFCA, launched a “Forestry Better Business Program” to help forest contractors by providing an efficient online tool to identify and maintain best practice standards. The program offers one agreed set of standards that is readily accessible. It’s an improvement on past practice where forest managers used different standards and methods.

In New Zealand, the Forest Industry Safety Council is preparing to launch its own version, the “SafeTree Contractor Certification” system, after extensive pan- industry collaboration to build the new system directly with users. The FISC system will have in-field assessments in addition to the online verification of contractor's practices.

Last but not least – election promises. Labour leader Jacinda Ardern used a visit to Rotorua last Thursday to announce plans to establish a new Forestry Service in the city, if Labour forms the next government. During a visit to the Red Stag timber processing company, Ardern said the creation of the standalone forestry service would provide stability for investment in processing and manufacturing wood onshore, rather than exporting raw logs.

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NZTE to probe wood supply concerns

NZTE probes wood fibre supply concerns for proposed $180M Chinese plant in Kawerau - New Zealand Trade and Enterprise, which has encouraged a Chinese company to invest in a $180 million wood processing plant in the Central North Island to boost regional development, is now looking into whether there is enough wood fibre available to supply the plant following concerns from local industry.

China’s Guangxi Fenglin Wood Industry Group announced plans earlier this year to establish a plant in Kawerau by 2020 to produce 600,000 cubic metres of panel boards a year and generate 100 new jobs, at an expected cost of $180 million.

However, the Wood Processors & Manufacturers Association of New Zealand has raised concerns that timber mills in the region don’t produce enough wood fibre to supply the proposed plant as well as existing big pulp mills of Kinleith in Tokoroa and Tasman in Kawerau, which are owned by Japan’s Oji Fibre Solutions. Fenglin’s proposed plant is expected to initially produce particle board and later expand to medium-density fibre board (MDF).

The WPMA “very much welcomes” overseas investment in the New Zealand wood processing sector, said chief executive Jon Tanner. However, he noted “it is important that this investment is directed to regions where there is not an already constrained wood fibre supply.”

NZTE confirmed it has commissioned Finland forestry consultancy Indufor to provide baseline data on levels of wood fibre available for processing in the region for industry stakeholders.

NZTE general manager of investment Dylan Lawrence said the report will investigate the current and planned harvest levels of timber, the current annual volumes of pulpwood and residues, as well as planned production and consumption levels in the industry.

The report is expected to be completed near the end of this year and NZTE will publish a high- level summary of the findings, Lawrence said.

Fenglin told BusinessDesk it is confident that there is sufficient wood supply for the new development.

"Fibre supply for the new particle board mill in the immediate term will come from existing under-utilised wood fibre resources and from the rapidly expanding forest harvest in the wider region," said Fenglin Wood Industry (New Zealand) director John Galbraith. "The plant will complement existing wood manufacturing, providing alternative markets for existing byproducts and our expectation is this will support further investment in new primary processing ventures in the region, utilising fibre that is currently being exported as whole logs."

Fenglin’s planned investment in Kawerau was hailed as a huge benefit to the district by Mayor Malcolm Campbell when it was announced in April, who noted the area had traditionally faced a shortage of job opportunities.

Founded in 2000, Fenglin was one of the earliest engineering board manufacturers in China and the first in Guangxi Province, according to its website. Listed on the Shanghai Stock Exchange, Fenglin has three MDF plants and one particle board plant in China with total capacity of 810,000 cubic metres a year, and also owns about 14,000 hectares of forests to secure wood supply.

With plants in China’s Guangxi and Guangdon provinces, the company said it began to explore more international opportunities from 2015.

Source: BusinessDesk and Scoop

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NZIF awards top forester for 2017

2017’S Top New Zealand forester announced - Passionate forestry industry champion Garth Cumberland has been presented with the coveted NZIF Forester of the Year award for 2017.

The prestigious title is the highest accolade attainable by a New Zealand forestry professional. It is awarded to Cumberland this year, in recognition for his outstanding contribution to the industry, through his efforts to establish a cohesive national Forest Policy for New Zealand.

Cumberland is an Agri-Forestry specialist with a solid background in farm-forestry and over three decades of experience. He’s a committed industry professional with a big picture vision to protect the future sustainability of forestry.

With tireless dedication, Cumberland has spearheaded the development of a new Forest Policy for New Zealand. No easy feat, Cumberland set the wheels in motion, garnering critical support from key stakeholders within and beyond the forestry industry. He has maintained momentum, and driven the initiative needed, to bring New Zealand into line with other leading forestry producing nations.

Announcing the award at the NZ Institute of Forestry’s annual conference in Rotorua NZIF President James Treadwell acknowledged Cumberland’s efforts. “He is not just a great forester, Garth has vested a huge amount of time, effort and money to bring the Forest Policy Project to life. This work creates tangible long term benefits for New Zealand by creating better forests. It secures a path for the sustainable long-term future of New Zealand forestry.”

Around the globe, a new era of environmental accountability for land use is dawning. Developing such a policy initiative provides a clear road map for the forestry sector in New Zealand, and secures inter-generational responsibility for its sustainable future.

Pictured: Garth Cumberland, courtesy of FFA

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OneFortyOne to acquire sawmill

OneFortyOne Plantations (OFO) recently announced it is in advanced discussions to acquire the Jubilee Highway sawmill in Mount Gambier and woodchip operations at Portland from Carter Holt Harvey.

OFO Chief Executive Officer, Linda Sewell described the intended acquisition as further evidence of the company’s strong commitment to the Green Triangle.

“Our company’s purpose is to build a dynamic industry in and around our forest. Today’s announcement represents a landmark investment, combining OFO’s world class forest with a significant regional mill. This is a great business and it is an excellent opportunity to provide security to the local forestry sector, creating benefits for everyone,” Ms Sewell said.

OFO holds a 105-year lease over its Green Triangle forest estate, and its ongoing success relies on there being a vibrant regional industry. Today’s announcement signals a vote of confidence in the local sector and demonstrates the resilience of the economy in the South East.

“We are the only forest grower in the Green Triangle that supplies logs to all local timber processors. Since assuming custodianship of the forests five years ago, we have increased supply to domestic customers by 45%. We are committed to retaining a diverse and enduring customer base. This is unchanged as a result of today’s announcement.

“Going forward we have no plans to expand the mill. We will continue to manage the forest estate on a sustainable basis and meet our obligations to the State for an average age of clearfall of 32 years or greater,” said Ms Sewell.

OFO is pleased to confirm there will be no job losses as a result of the change of ownership of the Jubilee Highway mill.

OFO also confirms that it continues to evaluate the feasibility of its proposed greenfield particle board mill and expects to have more news on this project in the next six months following successful completion of the Jubilee Highway acquisition.

The completion of the acquisition is subject to certain conditions including review and approval by the Australian Competition and Consumer Commission (ACCC).

About OneFortyOne Plantations
OFO is a leader in the Australian forestry industry. It holds long-term harvesting rights to a softwood plantation estate in the Green Triangle region comprising over 80,000 hectares.

Operating across the Green Triangle region, OFO directly employs 65 staff members along with more than 500 silvicultural, transport and harvest contractors from local communities.

OFO currently supplies all local Green Triangle processors with product, ensuring a dynamic and competitive market for log processing. They have a diversified customer base. Over half of their plantation fibre goes into structural timber, with the balance comprising of packing timber and resultant pulpwood.

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ANZ Commodity Price Index

The ANZ Commodity Price Index slipped 0.8% m/m in August, matching the fall in July (+16.3% y/y). Movements at the sub-category level were mixed. Six of the sub-components rose, eight fell and the remaining three were unchanged. The dip in the NZD against most major peers during August helped buffer local returns (+0.2% m/m), with the NZD index also 16% higher than 12 months prior.

Dairy prices largely traded sideways during August (-0.4%). Skim milk powder prices slipped 5.2% m/m due to high Northern Hemisphere stocks, and processors in these regions continuing to favour a SMP/milkfat mix because of high milkfat prices, European Commission backstops, processing capabilities and market access/arrangements. Price movements for the rest of the dairy complex were fairly unexciting (WMP: +0.3%, butter: +0.6%, cheese: -0.6%, casein: -0.6%).

Meat prices had another rough month with prices falling 3.2% m/m. From the recent peak in May prices have fallen 8% in NZD terms. Beef prices and skins both suffered during August. Higher US domestic production, reduced retail promotional activity and a passing of the seasonal demand peak have been the main drivers of lower beef prices. Venison (unchanged) and lamb (-0.7% m/m) prices were more resilient. Sheepmeat prices continue to be supported by low seasonal supply and inventory levels. NZD prices are receiving an additional boost from a lower NZD/Euro/GBP. Wool prices improved off recent lows too (+3.6%).

Seafood prices were unchanged and horticulture prices fell 1.7% m/m. Apple prices rose 1.3%, led by the Royal Gala variety. Kiwifruit prices slid for the second month in a row (down 2.8%) as export volumes caught up from a late start to the season. Despite higher export volumes, the gold variety has sustained prices 14% higher than a year ago and achieved close to 60% premium on rival Chilean product.

The forestry group increased 0.7% m/m with offsetting movements at the sub- component level. Log prices (+1.5% m/m) continue to be supported by Chinese demand, with port-level inventory and offtake continuing to track favourably. The Chinese Government has also announced lower import tariffs on logs in a bid to curb the use of logs from their own native forests. Local demand has experienced the usual seasonal slowdown, but unpruned demand for structural timber and posts/poles remains strong. Wood pulp fell 1.3% as Chinese demand for softwood products eased.

Aluminium prices lifted 6.2% m/m (23% y/y). The aluminium market is clouded by uncertainty as China enforces environmental and regulatory changes and clamps down on illegal capacity. As a result, Chinese stocks and prices lifted amidst pending production cuts. Still-elevated world and NZD commodity prices will provide a strong boost to rural incomes in 2018, which will diffuse through the broader economy. With the construction sector facing capacity constraints and not providing further impetus to growth (though operating at a high level), economic stimulus will have to come from elsewhere, and high commodity prices is one of those areas.



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Wood panel plants needed for paradigm shift

Housing supply – Panelisation provides paradigm shift – Wood panel factories, not on-site workers, is the only way to solve the housing supply crisis, says a Rotorua engineer who is organising a national wood technology conference later this month.

John Stulen, from Innovatek says, “More workers building houses on-site is not enough to really lift housing supply. Only new high volume wood panel plants will do that in a big way, which is exactly what New Zealand needs. It simply has to happen. XLAM’s cross- laminated timber (CLT) plant in Nelson and Stanley Group’s modular building factory in Matamata have delivered some added capacity, but there is room for far more supply to meet demand.”

He says, “In Australia, developers and large builders have already boosted their industry by adding more wood panelisation plants. It is a welcome sign for ramping up the supply of new affordable housing. We need at least one or two more large wood panel factories using new ultra-modern manufacturing technologies to ramp up single family and multi-residential homes in New Zealand.”

Stulen is organising a national conference in Rotorua this month. International keynote speakers will explain how housing and mid-rise residential building capacity has grown immensely in Australia and Canada on the back of new wood panel and pre-fabrication plants. In Australia, since launching its automated prefabrication facility 12 months ago, building contractor Strongbuild has grown from strength to strength. The first of its kind in Australia, the panelisation facility in Bella Vista, northwest Sydney, manufactures extremely precise prefab components that are highly cost-effective, allowing for rapid and safe assembly on site. Prefabrication now plays a part in roughly 80 per cent of Strongbuild’s projects and, more and more, the company is choosing only to work on projects where they can add value through offsite manufacturing. Strongbuild’s business development manager, Shane Strong, will discuss their business model at the “Changing Perceptions” annual conference in Rotorua this month. Prefabrication gives the company control over the entire design and build process taking place in-house, including price, quality and timing. Strongbuild, and wood panelisation plants generally, are helping to meet the challenges of Australia’s housing supply shortage. They are delivering cost efficiencies and time savings that lead to overall lower costs per dwelling.

Strongbuild can complete a two-storey townhouse, to lock-up stage in about three days from the floor slab being completed. Shane Strong says that panelisation is a manufactured solution they’re absolutely committed to. They are also doing bathroom pods, but they’re not really a modular builder. Their Sydney plant produces prefinished panels, both as cross- laminated timber (CLT) structural elements and for walls using standard lightweight timber framing.

Strongbuild launched in 2000 with a vision to create a streamlined building system that would take the negative variables out of the design and building process. Beginning by delivering single-residence homes in a classically Australian style, the business soon expanded into the multi-residential space, splitting into two divisions – home building and community building. The multi-residential arm has delivered townhouse communities, residential apartments and vertical retirement villages, including Australia’s largest CLT project, The Gardens at Macarthur Gardens in Campbelltown.

Growing demand from developers in the Sydney market has driven Strongbuild’s expansion, with prefabrication being the engine that allows the company to deliver savings in material costs and construction timelines. With Aveo Norwest – a luxury vertical retirement village – Strongbuild are able to deliver the project three months ahead of a traditional construction timeline for a similar project.

The upcoming national building industry conference, entitled “Changing Perceptions” is focused on “The Advantages of Timber in Mid-Rise Construction.” It's Innovatek’s second annual conference in commercial wood building and runs in Rotorua on 28 September.

The conference is part of wood technology week in Rotorua this month alongside the long- running FIEA WoodTECH 2017 two-day conference and trade expo. Rotorua Lakes Council are event partners as part of their “Wood-First” policy. The diverse programme attracts building owners, developers, architects, engineers, specifiers and key engineered wood suppliers.

For more and to register, see www.cpetc2017.com

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Ardern unveils forestry hub plans

Labour leader Jacinda Ardern used a visit to Rotorua last Thursday to announce plans to establish a new version of the New Zealand Forest Service in the city, if Labour forms the next government.

During a visit to the Red Stag timber processing company, Ardern said the creation of the standalone forestry service would provide stability for investment in processing and manufacturing wood onshore, rather than exporting raw logs.

"Forestry is our third largest export sector, but there has been a dramatic switch away from processing to exporting raw logs. While 3000 jobs in wood processing and manufacturing have been lost since 2008, raw log exports have tripled.

"I grew up in the forestry town of Murupara, and I know the importance of this industry for many communities.

"Foresters and manufacturers have told us there is a lack of a strategy and co- ordination. Sawmills don't have a dependable supply of logs, which stops them from investing in more capacity. That's made it impossible for forestry to achieve its target of lifting exports to $12 billion by 2022.

"Labour wants to bring the Government's wood policy to the heart of forestry country by establishing a New Zealand Forest Service in Rotorua, replacing functions currently carried out in Wellington. It will be responsible for implementing a National Forestry Strategy, growing its own commercial forests as appropriate for the strategy, and helping other land owners who want to convert to forestry.

"A Labour government will have first preference for using wood in new building projects, including KiwiBuild.

"We want to grow the wood sector, create more jobs and keep more of the value- chain here in New Zealand. Expanding the area under forest is also an important step in tackling climate change."

Photo: Jacinda Ardern at a sawmill during her Rotorua visit.

Source: Stuff News

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Australia moves to standards for contractors

Program to Encourage Better Businesses in Australian Forest Industry - In Australia, the Hodgman Liberal Government announced last week that it is committed to rebuilding Tasmania’s forest industry by encouraging new investment and jobs growth.

Achieving best practice standards is challenging in any industry, but is particularly important in forestry where the community rightly expects businesses to operate safely and sustainably.

The Forestry Better Business Program will help forest contractors by providing an efficient online tool to identify and maintain best practice standards.

Developed by ForestWorks in collaboration with the Australian Forest Contractors Association and supported with Australian and Tasmanian government funding, the program offers one agreed set of standards that is readily accessible.

This is an improvement on past practice where forest managers used different standards and methods.

The program will also allow for improved communication between contracting businesses and forestry managers, and provide a mechanism for accrediting businesses operating to high standards.

An additional outcome of the development of the program was the creation of a single Work Health and Safety Audit Tool to support businesses demonstrate and report their compliance to the range of applicable safety standards.

This new program, launched today, aligns with the Liberal Government’s vision of an increasingly professional forest industry that adheres to best practice standards in all facets of its operation.

We commend ForestWorks and all involved on the development of this program and wish our forest contractors and managers every success.

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Election 2017: Forestry policies

Back in mid-July we provided you with a quick overview of the forestry policies of the main contenders for your votes in the coming New Zealand election. Eight weeks on it is time for another peak to see what, if anything, has changed.

----------------------------

Here are some links to the parties that have something to say specifically about forestry:

VERY SPECIFIC:
Labour Party
Green Party
NZ First

NOT SO SPECIFIC:
The Opportunities Party

NO SPECIFIC POLICY announced to date for forestry:
National Party
Maori Party

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Timaru Port set to benefit from forestry

Forestry firm's new branch set to benefit Timaru's port - Timaru's port looks set to benefit from an Australasian forestry management business branching out to a new operation in South Canterbury.

Earlier this month PF Olsen opened its newest regional office on Sefton St East in Timaru. The firm's portfolio including harvesting and marketing wood from privately owned forests and woodlands, alongside tree planting and thinning, pruning management and forest insurance.

At the opening, chief executive Peter Clark said the firm, one of the largest in its sector in Australasia, producing timber from 330,000 hectares across New Zealand and Australia, was setting the new regional office as a "local extension" of its international operations.

"We have well established offices in Christchurch and Dunedin, but there is a lot of country and a lot of forestry blocks in between ... we need boots on the ground. We need to be close to forests and their owners."

Clark said the "wonderful port" in Timaru would be a key part of its regional set up.

"Log exports are important as they provide a market for parts of the tree that most New Zealand sawmillers cannot utilise well, and it underwrites the economic returns that forest owners need to keep planting forests."

PF Olsen South Canterbury manager Henry Morris told the gathered audience that the firm was headquartered in Rotorua, from where it ran a series of "regional headquarters, which in turn oversee district branches."

"This new Timaru office is one of these satellite offices working under the Canterbury branch in the Northern South Island region."

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ANZ Truckometer - On the road again

KEY POINTS

  • The ANZ Truckometer indexes bounced back in August from July's weather disruption.
  • The Heavy Traffic Index lifted 6.2% in the month (seasonally adjusted), while the Light Traffic Index rose 2.6% m/m (the chart below is a 3-month average).
  • The indexes are trending up, but despite the bounce-back, the trend in the Heavy Traffic Index has flattened off a little



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Jobs


... and finally ... practical maths country-style

You simply can't argue with good ol' country logic:

A Missouri farmer passed away and left 17 mules to his three sons. The instructions left in the will said that the oldest boy was to get one-half, the second oldest one-third, and the youngest one-ninth. The three sons, recognizing the difficulty of dividing 17 mules into these fractions, began to argue.

Their uncle heard about the argument, hitched up his mule and drove out to settle the matter. He added his mule to the 17, making 18. The oldest therefore got one- half, or nine, the second oldest got one-third, or six, and the youngest son got one-ninth, or two. Adding up 9, 6 and 2 equals 17. The uncle, having settled the argument, hitched up his mule and drove home.



That's all for this week's wood news.

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John Stulen
Editor
Innovatek Ltd
PO Box 1230
Rotorua, New Zealand
Mob: +64 27 275 8011
Web: www.woodweek.com

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