WoodWeek – 28 March 2018

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Greetings from your WoodWeek news team. New Zealand exported more than one million cubic metres of softwood logs in January, only the second time in the country's history that such a high volume has been shipped in the month. Our graphic reporting in this week’s issue from the team at Champion Freight shows total log export values are up over 24 percent for both year- on-year and month-on-month as at end of February 2018.

On the tree-harvesting front, technology and automation are continuing to make tree falling and log extraction safer according to a news update from University of Canterbury lecturer Rien Visser. He was speaking to the goal of "No worker on the slope, no hand on the chainsaw" – a key theme of recent research funded by industry and government to improve worker safety in our forests. FIEA will be bringing robotic logging developments to our upcoming forest safety conference in August in both Melbourne and Rotorua.

Investment rule changes proposed by Associate Finance Minister David Parker will introduce a light-handed screening regime, to make it easier for overseas investors to gain approval to buy forestry rights than if they were subject to the current screening regime. Overseas buyers of existing freehold and leasehold forestry land, who already face screening, would also be able to use the light-handed checklist.

This week our Innovatek team is running the sold out technology conference MobileTECH - for software developers and mobile technology users across the agriculture, horticulture and forest industries. The pace of technology change is exhilarating. This brings increased potential to make these supply chains more efficient and internationally competitive.

Earlier this month, we also ran our popular ForestTECH conference series for a packed house to leading forest management companies and logging contractors in Vancouver – this is our third year running tech events on Canada’s west coast. Delegate feedback was extremely positive. They also voted for longer conferences to see more case studies on emerging technologies for remote sensing and harvester data applications. We will be more than doubling our conferences there from next year.

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A million cubic metres in a month

New Zealand log exports topped 1M cubic metres in January - New Zealand exported more than one million cubic metres of softwood logs in January, only the second time in the country's history that such a high volume has been shipped in the month.

The country exported 1.1 million cubic metres of softwood logs overseas in January this year, up 32 percent on January 2017, according to data from Global Trade Information Services published in AgriHQ's monthly forestry market report. That's the highest level for the month since 2014 and only the second time volumes have exceeded 1 million for a January month.

"New Zealand’s softwood log exports started 2018 with a bang," AgriHQ analyst Reece Brick said in his March report under the heading 'Flying start for log exports'. "The strong start to 2018 bodes well for the coming year, as January is historically the weakest month each year."

The large export volumes in January were partly down to the later timing of Chinese New Year, which moved some of the heavy pre-Chinese New Year trading into January rather than December. New Zealand log exports in January fell 31 percent from December levels ahead of Chinese New Year celebrations, which ran from mid-February through to early March. However, the generally high level of exports this past 12 months were also a factor in lifting January volumes, AgriHQ noted.

New Zealand cemented its position as China's top source of softwood logs last year, with its share of the market lifting to 36.3 percent from 34.7 percent. AgriHQ noted that New Zealand's strong presence in the Chinese log market continued in January, with imports of New Zealand logs jumping 43 percent from the same month a year earlier, and accounting for 40 percent of China's total log imports, significantly ahead of its closest rival Russia with a 21 percent share.

China's demand for softwood logs has increased after Asia's largest economy clamped down on harvesting its own forests and reduced tariffs on imported logs to meet demand in its local market.

"All eyes are focused on the direction that China takes after the Chinese New Year holidays," Brick said. "Activity was relatively dead over the past month, but port-level offtake in the past week or two has reportedly lifted more sharply than expected.

"There’s little to show there will be any deviation from what’s been witnessed over the past 12 months and the general sentiment is for small price increases over the next two months."

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

Source: BusinessDesk via Scoop

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Robots are coming to NZ forests

Stung by workplace accidents and deaths, the forestry industry is hoping robots will soon take over the most dangerous jobs. Will Harvie reports.

"No worker on the slope, no hand on the chainsaw."

That was the theme of a recent research project funded by the New Zealand forestry industry and Government to reduce accidents and deaths in our forests.

While funding has ended for one aspect, it's still a long-term goal and university researchers such as Dr Rien Visser, director of studies in forest engineering at the University of Canterbury, foresee autonomous felling machines, robot trucks delivering logs to mills and drones replanting forests – eventually and maybe.

While other researchers are looking deep into robotic tree fellers, Visser takes the view that robotic chainsaws are some time away – and there's lower hanging fruit to tackle first.

He also doesn't foresee robots with humanoid features – two legs, two arms and perhaps a head – clomping through New Zealand forests, as fun or frightening as that might be.

Forestry robots will be wheeled or tracked vehicles – uncool, but high-tech industrial beasts built to survive the steepest terrains, festooned with video cameras, connected to the internet cloud, but still overseen by a human. Think of big bulldozers, without a cab for human control.

Visser, in a public lecture earlier this month that marked his promotion as a full professor, said mechanisation of the forestry industry had already come to New Zealand. There are fewer hands on chainsaws and more big machines felling and processing trees, especially on flat land.

Once they are cut, logs have to be extracted from the forest floor to a cleared, flat area called a "landing".

Log extraction is the most promising aspect of autonomous forestry, Visser says. In a January report he wrote for Forest and Wood Products Australia, Visser called it the "most realistic" area for autonomous development.

These days, machines called skidders and forwarders driven by humans are used for extraction on flat and rolling terrain.

Extraction is predictable but sometimes dangerous work, Visser says. Autonomous machines could work on relatively well-defined trails in the forest. They don't need to think much, just move along the trail back and forth, extracting logs to the landing.

"However, for such extraction systems to become very productive and cost effective, [they] need to be able to self-load and unload," Visser wrote in the Australian report. In other words, robots need to be able to identify the trees or logs in the forest, know how to pick them up, and stack them.

He thought autonomous extraction technology was a "near-future opportunity", one to five years away.

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Forestry rights amendments

Amendments proposed to forestry rights screening regime - Investments in sensitive land involving forestry rights will be brought into the scope of the Overseas Investment Act under changes proposed last week by Associate Finance Minister David Parker.

The changes would also introduce a light-handed “checklist” screening regime, which will make it easier for overseas investors to gain approval to buy forestry rights than if they were subject to the current screening regime.

Overseas buyers of existing freehold and leasehold forestry land, who already face screening, would also be able to use the light-handed checklist.

“The changes need to be made before the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) comes into force, or we will lose the chance to screen such sales forever,” Mr Parker says.

“It will then be possible for future governments to tighten or further loosen the criteria applied to forestry investment, if required.

“Any forest can in effect be purchased as a forestry registration right. This means that a screening regime that covers only freehold and leasehold is ineffective. Forestry rights can grant a high degree of control over large parcels of land for multiple rotations over long periods of time, so it is important they are included in the regime. There is no evidence that the change will have a substantial effect on commercial values,” Mr Parker says.

The forestry sector is reliant on overseas investment with 70 per cent of plantation trees in overseas ownership.

Under the proposed changes investors buying up to 1000 hectares of forestry rights each year will not need consent, but purchases above that level would be screened. This would apply to all forestry rights, including bare land planting.

Investors would likely pass a new screening test for freehold and leasehold bare land, given they can demonstrate benefit to New Zealand from converting land into forestry, providing jobs and advancing the Government’s “one billion trees” policy.

The amendments have been submitted to the Finance and Expenditure Select Committee. The Government will also be consulting further with Maori.

More information, including the draft regulations, can be found here.

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Australia: Benefits of wood at work

"Add Wood" - A new approach to increasing workplace productivity - A new research report shows that adding natural elements, such as wood, to our workplace environments is associated with increased feelings of wellbeing and higher productivity.

The implications of this are both broad and exciting and should inform the design of every new and refurbished office fit-out, in addition to providing the impetus to rethink the furniture and decor of existing offices!

Applying the findings to workplaces - ranging from corporate and government offices to home offices - has the potential to create happier, more productive workplaces with reduced absenteeism.

This research also complements overseas studies that have suggested that more wood and other natural materials in educational environments can lead to similar results, with indicators being higher academic marks and better student behaviour. Overseas studies have also shown benefits to hospital patients associated with increased exposure to natural elements in their environments.

This research has been described by Canberra University's Associate Professor Jacki Schirmer as one of the most compelling pieces of evidence that she has seen for such a proposition:

“What I found and got really excited about was that there’s a really strong association between the presence of wood and wellbeing. I’ve rarely seen a data set or a study which has shown such a clear link.”

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------------------- Additional reporting -------------------

Employers looking to boost worker productivity should consider using more of one of the world’s oldest and most sustainable materials in their office fit-outs: wood. That’s the takeaway from world-first research by strategic market research firm Pollinate and the University of Canberra.

Based on a survey of 1000 indoor Australian workers, the research provides fresh evidence to underpin the business case for biophilia – the principle that exposure to nature increases human wellbeing.

The study paints a bleak picture of workers’ current access to nature at work with less than half (47 per cent) enjoying access to natural light, only two in five (38 per cent) being able to see indoor plants, a quarter (26 per cent) unable to see any natural looking wooden surfaces and almost half (46 per cent) spending less than an hour outdoors on work days.

The study found that the more natural looking wooden surfaces workers could see from their workstation, the higher their workplace satisfaction and wellbeing. Ahead of an address to the Green Cities conference in Melbourne on 14 March, Associate Professor Jacki Schirmer from the University of Canberra said the results held true even after rigorous analysis that controlled for factors known to impact on the wellbeing of workers such as age, income, gender and workplace culture.

“These results are exciting, for the first time providing solid evidence to support the use of wood as part of bringing nature into workplaces,” she said.

“We are always looking for ways to improve health and wellbeing, and this research points to ways we can achieve that in the places many people spend a lot of their time – the workplace.”

“The work has implications for businesses, because a large body of research has shown that workers who are more satisfied with their work and have higher wellbeing have better work productivity, and reduced rates of absenteeism – which means improving worker wellbeing has real benefits for businesses.”

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Champion Freight Reports

Thanks to the great team at Champion Freight we've got the latest export market activity update for you in a series of really self-explanatory charts. They have some easy-to-read labels on the charts so they are readily identifiable even when printed in black & white.

To download the full report, click here.

Source: Champion Freight

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CLT solution: Atrium office created

Watch this drone footage of a stunning 10-storey timber atrium by Studio RHE - Built to stem the exodus of young people and their companies from central London Studio RHE has created a 10-storey engineered timber atrium at the heart of a London office building, as shown in this exclusive footage shot by Dezeen for the architecture firm.

London-based Studio RHE renovated the Import Building for Trilogy Real Estate, as the first phase of the reinvention of the Republic complex in East India Quay.

The building was fully updated, with amenities including bars, cafes and extensive outdoor terraces. However the most striking intervention is the new atrium. This structure was built using both glulam engineered wood and cross-laminated timber (CLT).

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Source: www.dezeen.com

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Safety in remote locations

Kangaroo Island Plantation Timbers (KIPT) has implemented a new safety system for its forestry services team.

Long-serving employees Stephen Connell, team manager, and Barry Budarick attended the safety training day at the company’s Kingscote office. Joining them were the company’s newest employees Brian Stewart and Claire Lillington.

KIPT director of operations Graham Holdaway conducted the training with safety manager Allie Zubizarreta and consultant Robin Holmes.

“Forestry is an industry with specific safety issues and we are implementing new systems to ensure the safety of our workers and others who may be visiting work sites,” Mr Holdaway said.

“It is a good time to do this, as we bring on new employees and plan for an expanded workforce.”

Part of the new regime includes an emergency contact system for those working in isolation, which monitors the location of employees via satellite and requires them to check in at regular intervals. The system also allows them to summon help if needed.

Forestry contract company PF Olsen also used the KIPT Kingscote office recently for a Zero Harm training day for employees and contractors, raising the awareness of substance abuse and fatigue as factors in workplace safety.

Picking up on these and other industry progress, in August FIEA is running their annual forest safety and technology conference series in Rotorua on 8th August and in Melbourne on 15 August.

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Expansion reported in 1 in 3 firms

Expansion and research on the rise - One in three New Zealand businesses invested in their expansion in 2017, compared with 1 in 5 in 2007, Stats NZ said late last week. These results come from the Business Operations Survey, which reports on businesses with six or more employees.

Investment in expansion can include purchasing assets (such as land and machinery). It can also include entering into new markets, or investing in innovation. Innovation can include developing and implementing new products, business processes, and marketing methods.

The industries with the greatest growth in expansion rates over the past decade were the construction, and information media and telecommunications industries.

In the construction industry, 43 percent of businesses reported investing in their expansion in 2017, compared with 20 percent in 2009 and 24 percent in 2007.

“The construction industry saw a significant decline in expansion rates in 2009 after the global financial crisis,” business performance manager Laura O'Leary said. “The increased demand for construction work in recent years means businesses need to grow to keep up with the workload.”

One in nine businesses in New Zealand reported performing research and development (R&D) activities in 2017 – the highest rate of R&D performance since 2007. R&D rates increased across all business-size groups and most industry sectors over this time period.

The proportion of businesses that reported sales from tourism remained steady at 23 percent in 2017, compared with 2016. This represents an increase in the number of businesses with tourism sales, which was balanced out by an increase in the total number of businesses.

The percentage of businesses reporting export sales dropped slightly in 2017 (24 percent, from 25 percent in 2016). The number of exporting businesses has increased since 2016, but this was outweighed by the increase in the number of non- exporting businesses.

For more >>

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NZIF Awards Applications Open for 2018

Applications are invited for the awards and scholarships offered by the NZIF Foundation for 2018. With the addition of The New Zealand Redwood Company Scholarship and the Invercargill City Forests Awards this year, the total value of awards offered is $44,500.

The awards open for application are:
  • Two Future Forest Scholarships for post graduate research of up to $10,000 each
  • The New Zealand Redwood Company Scholarship of $5,000 for an undergraduate scholarship at the University of Canterbury School Forestry
  • Invercargill City Forests Awards of up to $5,000 to assist a resident of Invercargill with forestry related study, research or travel relevant to forests or forestry
  • Chavasse Travel Award of up to $3,500 to assist a mid-career person to travel overseas or to bring an overseas person to NZ
  • Jon Dey memorial award of up to $3,500 to assist research projects in the areas of work study or new technology aimed at improving forest engineering and harvest productivity
  • Otago Southland Award of up to $3,000 to assist a project of relevance to forestry in the Otago/Southland region
  • Mary Sutherland Scholarship of $1,000 for a polytechnic student
  • University Undergraduate Scholarship of $1,000
  • Frank Hutchinson Postgraduate scholarship of $1,000
  • Student Poster prize at NZIF Conference (1st, 2nd and 3rd prizes of $800, $500 and $200)

Applications are now open. Further details on the Foundation web page available through www.nzif.org.nz.

Applications must be received by the Foundation administrator ([email protected]) no later than 5pm on Wednesday 20th June 2018. The awards will be announced at the Awards Dinner of the NZ Institute of Forestry Conference in Nelson on Tuesday 10th July 2018. For details of the conference see www.nzif.org.nz.

Enquires to the Foundation chair [email protected] or phone +64 274 733 262.

About the NZIF Foundation
The NZIF Foundation was established in 2011 by the NZ Institute of Forestry to advance education in relation to forestry. This includes encouraging and supporting forestry related research, education and training through the provision of grants, scholarships and prizes; promoting the acquisition, development and dissemination of forestry related knowledge and information and other activities that do not conflict with the charitable purpose. For the purposes of these awards forestry is broadly defined to include all those activities involved in the management and use of forests and their products, the objects of which are the production of wood or other forest benefits and the maintenance of the environment in its most beneficial form. All forests in New Zealand, whatever their purpose, are encompassed in the definition.

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Rubicon shares rise on earnings upgrade

Rubicon shares rise after CEO Moriarty says ArborGen on track to more than double earnings- Rubicon shares rose 9.1 percent after chief executive Luke Moriarty told shareholders its sole asset ArborGen is on track to more than double annual earnings.

"We have great belief in the potential future upside in ArborGen," Moriarty told shareholders at the annual general meeting in Wellington, according to speech notes published on the NZX.

The stock rose 2 cents to 24 cents in early trading.

Last June, the NZX-listed forestry investor took full ownership of ArborGen, agreeing to pay International Paper and WestRock US$28.5 million in three instalments. It has paid US$18.5 million to date with a final US$10 million instalment due in July.

On Jan. 31 it closed the sale of its 45 percent stake in Tenon ClearwoodPartnership for US$15 million, which allowed it to pay Rubicon's outstanding subordinated debt and gives it the headroom to make that final payment.

ArborGen - which sells and develops advanced genetic seedlings to improve forest productivity - is now Rubicon's only asset.

Moriarty said ArborGen generated positive earnings before interest, tax, depreciation and amortisation in the last financial year and "the target for the current fiscal year ending 31 March is for ArborGen to more than double the US$1.7 million USGAAP ebitda result achieved last year," he said. USGAAP is the result ArborGen would report in a US listing situation and involves the full expensing of all R&D activities as USGAAP does not allow the capitalisation of these costs.

Moriarty said the result implies gross profit of around US$16 million. "ArborGen is well on track to achieving these numbers – despite the tough hurricane season that prevailed during the year and which materially adversely impacted sales volumes," he said.

He added the next fiscal year should see a "noticeable further lift in earnings yet again," and said the company would provide guidance after it closes the current year.

The company has changed Rubicon's balance date to March 31 to align with ArborGen's own year-end.

Source: BusinessDesk via Scoop

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Buy and Sell

... and finally ... Time to restock your chocolate stores!

Yes, Easter is coming ... and yes, this is one of our oldest WoodWeek jokes.
But, the take away is: don't forget to stock up on chocolate NOW!

Thanks for keeping up with the latest wood news with us!
Have a safe and productive week.

John Stulen

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