WoodWeek – 17 October 2018

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Greetings from your WoodWeek news team. Plenty of positive stories to fuel the industry for another week. The Ministry for Primary Industries (MPI) has just released its Situation and Outlook report for September 2018. Forestry exports are expected to remain stable at $6.4 billion for 2019. Log prices are expected to remain near record levels as Chinese construction activity is forecast to remain strong.

With our next FIEA ForestTECH conference only weeks away … we have news of a new forestry software system coming to market. After a successful release in Australia, Universal Forest Systems have announced that they will be launching the Forest Inventory Reporting System (FIRS) in New Zealand at our FIEA ForestTECH conference in just a few weeks. With lots of people already registered, now is the time to register your group for the Rotorua or Melbourne events. (See https://foresttech.events)

Woody biomass: Why is it not obvious? One perplexing question arising in the wake of the release of the NZ Productivity Commission’s low-emission economy report, is why has the Government not realised that lowering emissions and the One Billion Trees Programme have one thing in common - woody biomass.

Looking to forest equipment manufacturing, news is just in this week that Komatsu Forest wants to step up the game when it builds its next new factory. Their stated ambition is to build a factory optimised with human possibilities in mind. They want a factory based on human capabilities, where technology, good ergonomics and safety are prioritised and help to enable good quality. They also want an attractive and efficient workplace where their employees thrive and grow.

Removing allergens from milk, making manuka disease-resistant and preventing wilding pines are some potential future uses of gene editing in New Zealand if we choose to utilise this new technology. They are among the potential uses explored in the Royal Society Te Aparangi’s new discussion paper released earlier this month.

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MAF forecast: Stable log exports

New Zealand’s primary industry export revenue is forecast to reach $43.8 billion for the year to June 2019, an increase of 2.5 percent from 2018.

The Ministry for Primary Industries (MPI) has just released its Situation and Outlook report for September 2018.

“The latest update gives an encouraging assessment of our major primary sectors which continue to grow - up $1.1 billion from the previous year,” says Emma Taylor, a MAF policy director.

It’s a promising outlook and builds on the strong growth seen in 2018, when export revenue increased 11.8 percent. The year ended 30 June 2018 saw continued strong demand for logs in China bringing record export prices and volumes.

Forestry exports are expected to remain stable at $6.4 billion for 2019. Log prices are expected to remain near record levels as Chinese construction activity is forecast to remain strong.

Horticulture and dairy are the driving forces behind the increase forecast for 2019. Horticulture exports are forecast to rise 13.1 percent to $6.1 billion for the year ending June 2019. Dairy exports are forecast to rise 2.1 percent to $17.0 billion for the year ending June 2019, consolidating gains made in the last two years.

After an impressive gain in meat and wool exports in 2018, exports are forecast to decrease by 1.3 percent to $9.4 billion in 2019.

“Overall, the latest outlook for our primary industries gives plenty of positives as we work to sustainably reposition primary industries up the value chain and deepen sector partnerships,” say Taylor.

MPI’s Economic Intelligence Unit has published a new webpage designed to make MPI’s data and analysis more accessible. For more information see: www.mpi.govt.nz/EIU

The next Situation and Outlook for Primary Industries report is due to be released in mid December.

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Wood for biomass should be obvious

Woody biomass: Why is it not obvious? - One perplexing question arising in the wake of the release of the NZ Productivity Commission’s low-emission economy report, is why has the Government not realised that lowering emissions and the One Billion Trees Programme have one thing in common - woody biomass.

Whilst the Commission’s report describes accelerating afforestation as a “key part of a transition to a low-emissions economy”, its primary discussion of the effect of the One Billion Trees Programme was focussed on carbon sequestration.

The obvious corollary effect of huge increases in the supply of woody biomass, that increased afforestation will produce, is mentioned only tangentially in the report: “Inquiry participants also noted that the additional afforestation required for New Zealand to meet emissions reduction targets could significantly increase available biomass feedstocks.”

Submissions made by Peter Hall, author of Scion’s ‘Residual biomass fuel projections for New Zealand’ report, despite cogently forecasting biomass resource from projected plantings being able to meet almost a third of NZ’s total consumer energy demand, were overlooked, with the Commission still finding reliability of supply of sustainably sourced biomass for process heat a barrier to further uptake.

Scion’s report, published in 2017, sought to describe woody biomass residue resources in New Zealand by volume, type, energy content and region, over time from 2017 to 2042. It found that biomass residuals could displace at least half of New Zealand’s coal demand, potentially as much as 70%, with a subsequent impact on greenhouse gas emissions of ~1.1 million tonnes of CO2e per annum displaced.

Notably, the Scion report was compiled prior to the announcement of the One Billion Trees Programme. Significant volumes of residue for biomass fuel (in excess of Scion’s predictions) will be available once trees planted today reach maturity in the years leading up to 2040.

Significant early progress is being made in the Programme, with 59 million additional trees planted by August this year, and the allocation of $485 million from the Provincial Growth Fund, administered by Shane Jones, for initiatives to promote planting.

The trees are in the ground and the Commission’s report recommends a roll-out of policy initiatives to support the supply and use of biomass stating that “electricity and biomass appear to be the two options with the widest applicability and potential to reduce emissions” in heat and industrial processes.

So why has the Government failed to connect the dots between more trees, biomass fuel and lowering emissions? The Labour-led Coalition’s recent communication difficulties could be the source of the problem. Or is Minister for Climate Change James Shaw so enamoured with EV’s he can’t see the woody biomass for the trees?

With New Zealand First’s Shane Jones driving the One Billion Trees Programme, including the establishment of Te Uru Rakau, the agency charged with leading it, is there a disconnect with the rest of the Coalition?

Surely, the next steps should be for the Government to lead the move away from fossil fuels to biomass and promote initiatives which will see industry do the same.

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China: Wood processing consolidations

In China, a massive restructuring effort to eliminate outdated and polluting wood processing mills, many of them being plymills had, by the end of 2017, resulted in around 3,000 plywood mills across the country being closed.

A total of 621 fibreboard production lines were dismantled or shut down eliminating over 20 million cubic metres of production capacity. However, within a year fibreboard output had recovered.

In addition, more than 900 particleboard production lines were either relocated or closed reducing the installed production capacity by around 17 million cubic metres. Overall in 2017 there was a 15% decline in the number of wood-based panel enterprises.

These changes affected mainly the smaller companies such that by the end of 2017 production capacity had consolidated in fewer but large and medium-sized enterprises. This restructuring has resulted in an increase in cross-industry mergers and acquisitions within the industry.

By the end of 2017 there were 117 continuous flat pressure fibreboard production lines throughout the country with an annual production capacity of 19.4 million cubic metres accounting for 41% of the national total production capacity of fibreboard. There were also 40 continuous flat pressure particleboard production lines in operation.

Source: ITTO MIS Report

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Komatsu Forest plans new factory

Komatsu Forest wants to create a factory for the future - Recently, Komatsu Forest announced their intention to acquire land in Klockarbacken, Umea, Sweden. Now Komatsu Forest can reveal that they have the ambition to build a completely new factory in the area.

The ambition is to build a factory that is optimised with human possibilities in mind. The company already has high demands on work environment, safety and product quality, which is also something that characterises the vision of a new factory.

"We want a factory that is based on human capabilities, where technology, good ergonomics and safety are prioritized and help to enable good quality in our manufacturing. We want to build an attractive and efficient workplace where our employees thrive and grow and where we can deliver product quality at the forefront ", says Factory Manager Martin Arlestig
Another important part of the vision is to take great environmental responsibility. "We have high environmental targets for our production already today, but when a new factory is built from scratch, we can seek environmentally friendly solutions all the way. Our target is to become CO2 neutral in our production, "says Arlestig.

"We see this as a major investment in the region, which will contribute to additional job opportunities throughout the construction project. We also see the factory as part of a larger whole, where the establishment of the new plant helps to strengthen the attraction of the region as a forest technical centre in Sweden.

The region already has a strong forestry technical position, but a new factory would contribute to strengthening the position even further for the future", concludes Arlestig.

For a decision to invest in a new plant to be realised, support is required to assist the company's venture; such as a sustainable infrastructure solution that meets the company's future transport needs on road and railroad and regional support is needed to complement the large investment made by the company.

"This is one of the major investments in the company's history and as we understand it, one of the major industrial investments that is to be started in Sweden right now. We look forward to get all items settled so that we can carry out our plans and start the procurement process for the project”, concludes Mitsuru Ueno, CEO Komatsu Forest.

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ForestTECH: New forest software launch

After a successful release in Australia, Universal Forest Systems today announced that they will be launching the Forest Inventory Reporting System (FIRS) in New Zealand at the FIEA ForestTech conference next month.

FIRS is an innovative end-to-end solution for designing forest inventories, capturing data, analysing the captured data and reporting the results. It is a web based application that supports the design of inventories in a browser and includes tools for digitising, generating plot locations, managing field devices and tracking progress.

Ashley Goldstraw, Forestry Apps Developer for Universal Forest Systems said: “You can undertake a complete forest inventory without the need for any other software, but it still integrates with other systems if you want to bring your own data.”

Plots are transferred to the Firs Data Capture (FirsDC) app on an Android device via the internet, eliminating the need to bring the device into the office. Once the plot templates are downloaded to the device, the app may run without internet. Inventory crews may also use the integrated GPS to locate plots in the field, as well as capture data, check the data with built-in data validations and view summary statistics. Completed plots are then uploaded back to FIRS via the internet, where they can be instantly summarised.

Inventory data is volumated and grown using built-in biometric equations, which users may interact with. FIRS provides a range of grading solutions to suit different levels of detail and budget.

“Once you have your biometrics and grading set up, the results are available almost as soon as the data is loaded into FIRS. There is no messing around with cables, emailing files or transferring to folder locations, and the data has already been exposed to dozens of validation checks before it arrives. FIRS has nearly eliminated data management overheads.” said Elspeth Baalman, Forest Biometrician at Universal Forest Systems.

UFS provide FIRS on a pay-as-you-go approach, with no up-front costs, an approach intended to cater to all sectors of the forest industry, large or small.

For more information visit UFSystems.com.au or FIRS.com.au.

Ashley and Elspeth will be outlining their new Inventory Reporting System in just over two weeks in Rotorua, New Zealand on 14-15 November and then again in Melbourne, Australia on 20-21 November as part of the ForestTECH 2018 series. Full details on the programmes and pre- conference workshops (some are already full so you’ll need to check on availability on-line) can be found on the event website, www.foresttech.events.

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Hyne grows production capacity

Hyne Timber has just announced a significant expansion to its Glue Laminated Timber (GLT) manufacturing capability in Maryborough, Queensland.

Already a significant manufacturer of GLT in addition to softwood timber products, this expansion investment with the support of a Queensland Government Jobs and Regional Growth Fund will launch the company into a globally competitive product offer.

The new state-of-the-art manufacturing plant will accompany the existing plant in Maryborough’s Industrial Estate which is now in its 40th year of production.

This announcement comes as engineered timber manufactured from plantation softwood is increasingly preferred for larger scale commercial and residential construction projects due to its superior sustainability and environmental credentials.

Hyne Timber CEO, Jon Kleinschmidt said investment to increase manufacturing capability has never been more timely.

“GLT is the talk of the design and construction industry, but a lack of competitive Australian supply options has prevented many projects from using it. “Increased capability here in Australia will be a game changer for the construction sector and a very positive area of growth for Maryborough.” Mr Kleinschmidt said. Construction of the new plant is expected to commence within a matter of weeks.

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Kaitaia: JNL addressing milltown dilemma

Returning Kaitaia’s triboard mill to profitability - Late last week Juken New Zealand Ltd (JNL) confirmed that its plan to refurbish its Kaitaia Triboard mill will go ahead, securing wood processing jobs in the town for the long-term.

The company told Triboard staff in September that it wanted to make changes at the mill, including investing to refurbish the plant and technology and return it to profitability. JNL said at the time that the changes would include some job losses as the plant had been running at a substantial loss.

JNL employs around 250 full-time staff across its Northland operations and its Triboard Mill in Kaitaia is one of the town’s major employers.

New Zealand General Manager of JNL, Dave Hilliard, says the mill has to change to survive – including the way it works. That means going from a 24/7 operation to running the mill 24 hours a day, five days a week.

“The mill needs to adapt production to meet the challenges of log supply and product demand and allow for the maintenance required on the weekends.

“For the long term future of this mill in Kaitaia, both sides have had to make compromises – workers here have always had a four days on, four days off shift pattern and we thank the Etu and First Unions for their work to find a solution that works for its members and the plant.

“This change means certainty for our people and the Kaitaia community about the future of this plant. We couldn’t keep on running the mill at a loss seven days a week when we don’t have the logs to put through it or the demand for that level of output.”

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Should we use gene editing in plants?

Should we use GE in plants? A new discussion paper evaluates the potential uses and risks of gene editing for New Zealand’s primary industries. New Zealand has historically had a conservative approach to gene editing, but embracing gene editing technology could allow us to create disease-resistant m?nuka honey and remove certain allergens from milk, a new Royal Society Te Ap?rangi paper says.

This discussion paper – the third in a series from the Society's Gene Editing in Aotearoa project – states gene editing could bring a range of benefits for our agriculture, horticulture and forestry sectors, zoning in on apples, m?nuka, ryegrass, wilding pines, and dairy cows.

Panel member Dr Phil Wilcox, a statistician from the University of Otago told Newstalk ZB's Kate Hawkesby "the whole point of this exercise was to... help inform public decision making about whether or not we should be using these technologies, and under what circumstances."

The scientists involved acknowledge that many members of the public are wary of genetic modification and Dr Tony Conner, science group leader at AgResearch, told Stuff: "The difficulty with public perceptions of any genetic technology is that it tends to be skewed in favour of the worst-case scenario, even when there is no real evidence of harm."

The Society is seeking public feedback on the paper and holding three workshops around the country this month to discuss the findings. The last one is in Dunedin next week.

The SMC gathered expert reaction to the report.

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Source: Royal Society

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XLam grows operations capability

XLam Optimise Operations to Capitalise on Market Opportunities - In light of the major project and partnership opportunities emerging in our sector and the increasing multinational demand for our products and services, the XLam board has undertaken an extensive review of our current operations and structure.

The current factors driving the board’s decision are market development and sales conversion in New Zealand and Australia, and the need to future-proof the business for growth.

His expertise and industry relationships make Gary Caulfield the point person to specialise in the rapidly expanding project part of the business, and to free up his time away from day-to-day plant management Gary is taking up the newly created role of General Manager XLam Projects. Gary will focus 100% on existing projects and on the opportunities for service and collaboration on public and private projects that are currently in the planning stage and for which XLam is optimally positioned.

Stepping into the CEO role (effective 1st October 2018) is Shane Robertson, whose years of service with Hyne have honed his leadership skills and given him extensive experience in manufacturing and finance – making him ideally qualified to lead the next growth phase of the business, which will include significant expansion on the manufacturing side.

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When trees meet buildings

Austrian artist Hundertwasser believed trees could soften the psychological impact of living in cities

In an effort to create a more pleasant, healthier and sustainable built environment, architects, engineers and developers are creating increasingly greener buildings - and doing it in a more literal way than ever before.

Buildings with trees are actually nothing new. The mythical Hanging Gardens of Babylon are often imagined as a stepped palace of terraces containing numerous trees, shrubs and exotic flowers.

Although no such building was found during excavations in Mesopotamia and its existence has been subject to much debate, artists have kept this imagery alive in their paintings throughout the centuries.

The current revival of green architecture began in the 1970s, when the energy crisis, coupled with growing awareness of humankind’s impact on the environment, propelled architects and engineers to think more carefully about sustainable development.

Although there are many different ways to approach sustainable building design, an increasing number of architects and engineers began to incorporate green roofs and other energy saving measures into their projects.

A prominent example of this is the Willis Faber and Dumas Headquarters (now called the Willis Building) in Ipswich in the United Kingdom (UK), designed by Sir Norman Foster and completed in 1975.

The building features a reflective double-leaf facade together with a grass-covered roof which could be used as breakout space for the firm’s employees.

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Carbon fund to launch on NZX

Salt Funds to open up carbon trading to retail investors in NZX-listed fund - Salt Funds Management plans to list a dedicated carbon fund, opening up the green commodity directly for retail investors.

Salt's Carbon Fund is expected to be 98 percent invested in carbon commodities, with 2 percent held in cash and equivalents. The fund will buy credits in New Zealand's emissions trading scheme and also in international schemes. It may use swaps, futures and other derivatives to get exposure to those markets.

The offer is expected to open next week but isn't seeking money yet. Salt plans to list the Carbon Fund on the NZX next month.

"This fund positions carbon as a new alternative asset and aims to give individuals and organisations a chance to invest in or offset these changes," managing director Paul Harrison said in a statement.

Provided the offer gets Financial Markets Authority approval it will be the first listed green investment entity in New Zealand. The units will be sold at $1 each with a minimum $5,000 investment.

NZX has been keen to foster a wider use of green investment tools and vehicles, with a growing number of green bonds listed on the debt market. At the same time, the government is charging ahead with its Carbon Zero legislation. The Crown's provisioning for emissions trading scheme credits rose to $2.54 billion as at June 30 from $2.03 billion a year earlier, with the carbon price rising to $21.10 per unit from $17.20 in June 2017.

The Carbon Fund will be at the high end of the risk register in that it's asset-specific and the product disclosure statement says it won't be appropriate for all investors, with a number of factors influencing prices such as political decisions, regulation, fuel prices, and weather and climate change.

"The historical carbon price has been quite volatile relative to traditional asset classes such as shares and bonds," the offer document said. "Price fluctuation plays a significant role in the carbon market and carbon dioxide emissions reduction."

Salt Funds will charge about 0.95 percent of funds under management to cover management and administration costs.

The fund manager won't measure the fund's performance against an index, saying there isn't an appropriate peer group.

Investments will be able to be made either through an investment advisor or directly through the Carbon Fund website, www.carbonfund.co.nz, which is currently accepting registrations of interest to receive further information.

Salt Investment Funds Limited is the issuer of units in the Carbon Fund. The product disclosure statement for the Carbon Fund is available from www.disclose-register.companiesoffice.govt.nz.

Source: Salt & BusinessDesk

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Forest Grower Research award winners

Winners of the Forest Growers Research Awards were announced last night in Tauranga. They have been awarded each year since 2011 to recognise outstanding achievements in forest growing research.

Quality science is a foundation of the forest industry and began 100 years ago with the first experimental plantings of introduced species for commercial wood production to replace New Zealand’s dwindling resource of native timbers. Six awards have been made in 2018.

Research Award for Communication and Sector Engagement - Paul Millen from the Drylands Forest Initiative is the recipient of this award in 2018. DFI is a public/private research venture established 10 years ago between the University of Canterbury, Proseed, the Marlborough Research Centre and a number of vineyard and powerline companies.

Research Award for Innovation that Enhances Sector Value - Simeon Smaill, a scientist with Scion based in Christchurch is the recipient of this award. Simeon has spent the past five years (at least) investigating the potential of novel methods for improving the growth and vitality of radiata pine. He has worked with forest nurseries to develop systems for producing tree seedlings using reduced input of fertilisers and fungicides, which inhibit beneficial mycorrhizal fungi. This not only reduces the cost of seedling production, but also the potential to lessen environmental impacts. He has shown that the gains made in the nursery continue for years after the seedlings were planted out in the forest.

Research Award for Science of International Quality - This award was presented to a team comprising Jessica Kerr, Brooke O’Connor and Steve Pawson from Scion in Christchurch for their world leading research in the Urban Battlefield Biosecurity project. This project began in 2015/16 to develop new tools for dealing with biosecurity incursions in built up areas.

Research Award for Research Participation and Implementation - This award was presented to Paul Adams of Rayonier Matariki Forests. Paul is the Technical Manager for Rayonier/Matariki Forests based in Auckland. Paul is an active member of the technical committee for the Growing Confidence in Forestry’s Future (GCFF) research programme. He is an enthusiastic supporter of the programme and is very proactive in engaging with researchers to learn more about their research and how it can be applied to his company’s forests throughout New Zealand.

Research Award for Contribution to a Science Team - This award was presented to Rebecca McDougal for her contribution to supporting the forest health team at Scion. Rebecca is a molecular forest pathologist, one of a new breed of pathologists who have revolutionised how diseases are diagnosed, using new molecular techniques.

Research Award for a Young Scientist - This award was made to Nurzhan Nursultanov who is very close to completing his PhD studies at the University of Canterbury Electric Power Engineering Centre (EPEC) in Christchurch.

More >>

Source: NZFOA

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Buy and Sell

... and finally ... points to ponder

Why is it?

If you take an Oriental person and spin him around several times, does he become disoriented?

If people from Poland are called Poles, why aren't people from Holland called Holes?

Do infants enjoy infancy as much as adults enjoy adultery?

If a pig loses its voice, is it disgruntled?

If love is blind, why is lingerie so popular?

Why is the man who invests all your money called a broker?

When cheese gets its picture taken, what does it say?

Why is a person who plays the piano called a pianist but a person who drives a racing car not called a racist?

Why are a wise man and a wise guy opposites?

Why do overlook and oversee mean opposite things?

Why isn't the number 11 pronounced onety one?

If a teacher taught why doesn't a preacher praught?

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

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John Stulen
Innovatek Limited
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Rotorua, New Zealand
Mob: +64 27 275 8011
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