WoodWeek – 5 February 2019

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Greetings from your WoodWeek news team. There is plenty of forestry action in the top of the South Island this week. Earlier in the week, helicopters and fire crews were fighting a fire in Marlborough's dry and rural Waihopai Valley. Also, hot off the press, Nelson Forests have acquired more forest lands nearby in the Wairau Valley.

Looking to log exports we have the latest report from Champion Freight to the end of December 2018. Log export values to China to the end of 2018 are up 18 percent year-on-year, to over NZ$2.7 billion contributing to overall log exports growing 18 percent across all markets. This is despite India and Japan markets dropping over the year.

In the latter half of 2018, the folks at Toi Ohomai Institute of Technology conducted a business review of forest contractors. This week we have an update from that review and an invitation to their current survey. Last time more than 130 crews were represented, originating from a wide spectrum of operations throughout the country.

WorkSafe has come down hard on a company with two similar health and safety failings within three months. Claymark Ltd will have to pay more than $680,000 in fines, reparations and costs. WorkSafe says that one serious injury on a company’s watch is bad enough, but that a second in close succession shows an unacceptable approach to worker safety.

Now that the Kiwibuild scheme has come under fire for missing its own targets, close scrutiny can also be expected of the Government’s plans for planting one billion trees. This week we feature an opinion piece from Julie Collins, the head of Te Uru Rakau (Forestry New Zealand).

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Log export market update

Thanks to the team at Champion Freight, we have the latest review of New Zealand's log export markets to the end of December 2018. As you can see in the accompanying graphic, total log export values to China to the end of 2018 are up 18 percent year-on-year, to over NZ$2.7 billion contributing to overall log exports growing 18 percent across all markets. This is despite markets in India (down 7%) and Japan (down 25%) dropping over the year.

To the end of December, China shipments month-on-month were up 7 percent and overall log exports up 4 percent.

(Editor's footnote: China was New Zealand’s top export market for major exports including dairy products ($4.0 billion), logs and wood ($2.9 billion), and meat ($1.9 billion), for the year ended September 2018. The value of these sales has mostly risen over the past three years.)

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OneFortyOne acquires more forestlands

Nelson Forests’ acquisition of Manuka Island estate confirmed by Overseas Investment Office - OneFortyOne (OFO) has received confirmation that the Overseas Investment Office has approved Nelson Forests’ acquisition of Manuka Island estate in New Zealand. The completion date for the purchase will be mid-late February.

The Manuka Island estate, currently owned by Merrill and Ring, is approximately 2000 hectares of forest in the Wairau Valley near Blenheim.

“The Manuka Island acquisition reflects our intention to continue to invest in the regions where we have an established presence. The acquisition complements our recent purchase of Nelson Forests and is a great fit for their estate,” says OFO’s Chief Executive Officer, Linda Sewell.

“Manuka Island will be a natural extension of our existing operation,” says Lees Seymour, Managing Director of Nelson Forests. “We are excited about the employment and regional economic development opportunities that the purchase will provide for Marlborough, in addition to our strong presence at Kaituna sawmill and through our forest activities in the region.”

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Survey invitation to contractors

In the second half of 2018, Toi Ohomai Institute of Technology conducted a forest contractors business review - They did it in collaboration with the Forest Industry Contractors Association (FICA). More than 130 crews were represented, originating from a wide spectrum of operations from across New Zealand.

Approximately 18 per cent of contractors told us the threat of losing key staff and skills were keeping them awake at night, with almost 60 per cent identifying skill shortages as a significant business risk. Insecurity of work also rated high. More than 85 per cent of participants indicated business in 2019 was expected to be similar or slower compared to 2017/2018.

The next business review will run from 8 - 24 February and will include several key questions shared with participants:
  • Do contractors prefer diverse roles in their crew or should operators be specialised?
  • What is the general level of job satisfaction among crew members in New Zealand?
  • Which factors are currently driving the contractor business?
  • What new skills are expected to come into the sector over the next five years?

Forestry contractors who are interested in these questions are invited participate in a 2-minute review by clicking here.

Additional information can be obtained from Toi Ohomai’s Forestry Operations Programme Manager; Richard Stringfellow (email [email protected] ai.ac.nz).

For more information, click here.

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Eastland: A decade of forestry awards

Celebrating 10 years of regional forestry awards - Nominations are now open for the biggest celebration of the region’s forest industry, the Eastland Wood Council Forestry Awards 2019.

And it is an extra special awards this year, which marks the 10th anniversary , bringing with it celebration and recognition for those who drive the local industry.

EWC chief executive Kim Holland says the anniversary is a time to celebrate and reflect on past awards and achievements. “It is a huge milestone for the industry nationally,” she says. “EWC led the way in 2010 with the first forestry awards in New Zealand and they’ve now been replicated across the country.”

Kim felt the ongoing success of the awards was a real credit to the industry and an opportunity to recognise excellence and achievement of the people and companies involved. “The people who make our industry what it is are all passionate, skilled and hard-working and they deserved to be recognized for the outstanding work they do.”

Event manager Prue Younger, who has been involved from the start, has seen the calibre of entries rise over the years, along with the numbers attending the awards evening. “Everyone has been memorable, and the evening is always a sell-out – this year will be no different with around 600 people expected,” says Prue.

A new category this year is the Woman in Forestry Certificate which seeks to recognise a female forester who demonstrates excellence across a range of skills, going above and beyond in any area of the timber industry.

Other categories include forestry excellence, roading, harvesting, distribution, wood processing, construction, individual faller, pavement excellence, health and safety, regional service, contractor of the year and the environment.

The concept of local forestry awards was first floated by Matt Wakelin, a then member of the Eastland Wood Council. “I just thought it would be good to recognise the workers in the forest and in doing so present the positive side of the industry,” said Matt.

While he left Gisborne before the first awards evening was even held, he has returned to help toast those he sought to be recognised and says it was quite special to attend.

“Seeing that room full of people, with people being recognised for their work in the forest and just the community support it gets – it is great to see.” He congratulated Prue and the Eastland Wood Council on their commitment to the awards. “Hats off to them,” says Matt who now works for Carter Holt Harvey as the manager of fibre supply. “These awards have now been replicated around the country but importantly Gisborne has been successful in reaching its 10-year milestone.”

WHAT: Eastland Wood Council Forestry Awards 2019
WHEN: May 17, 2019
WHERE: Showgrounds Park, Gisborne
MORE INFO: http://eastlandwood.co.nz/events/efa-awards/

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Our challenges to plant 1 billion trees

OPINION: by Judith Collins Head of Te Uru Rakau- Lately, there's been a number of articles about forestry and the need for more planters. At Te Uru Rakau (Forestry New Zealand), we've subsequently received enquiries from people interested in planting, which is encouraging.

We are not shying away from the fact that labour is a challenge for the forestry industry.

But where there are challenges, lie opportunities. Forestry is one of this country's most important industries. We have an opportunity with the government's renewed focus on forestry and the goal to plant one billion trees by 2028, to build on this and create a sustainable sector that offers real opportunities in the regions – both through job creation and economic growth.

One of the major aims of the One Billion Trees Programme is to create employment opportunities, particularly in the regions.

Currently, around 1000 workers are working in the forest growing industry each year. As the programme ramps-up and the planting rate increases, we're estimating the number of workers will need to nearly double by 2023 to support tree planting, nursery production, logistics and administration.

Te Uru Rakau is working alongside the industry and other government agencies to ensure there's sufficient labour for the upcoming planting season.

Part of this is about understanding what the workforce needs to look like. A survey of the industry is underway which will provide better data about the labour needs in the short term.

During 2019, Te Uru Rakau will be working closely with the industry, landowners and other key stakeholders to help set the strategic direction for forests and forestry over coming decades. One element of this work will be a multi-year plan to attract, develop and retain the workforce needed to create the conditions for a sustainable sector that has momentum to grow and adapt.

We are currently focused on working with the industry to ensure they are able to provide the opportunities for low-skilled workers so they're ready for the upcoming planting season, and helping employers to understand how to attract and retain workers by ensuring fair and safe employment conditions and clear career pathways.

We've held well-attended forestry employer information sessions throughout the country that were run by FICA, with Work and Income, Immigration NZ and the MBIE labour inspectorate all working together.

In the longer term, we are looking at how the sector can create opportunities for those not currently in employment to develop a career in the industry.

Part of the issue is around seasonality of jobs. Planting only occurs in the winter months, so the sector needs to be looking at other opportunities to create sustainable employment, particularly for young people who are either unemployed or not receiving education or training. This involves working with other agencies to ensure vocational training systems supports the needs of the forestry sector.

More >>

(Julie Collins is Head of Te Uru Rakau, Forestry New Zealand).

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Good wood news story of the week

"A smoothly automated dance of saws, claws and conveyor belts" - That's the title of this week's 'good news' story showing our industry in a positive light and covered by our friends in the mainstream media - for Stuff news. We all know how easy it is for our industry and people to be portrayed poorly to the rest of the news- reading population, so when it's good coverage we need to see it as well. Enjoy!

Here's how it goes:
A sawmill tucked away in a forested corner near Blenheim is not so quietly producing a large chunk of the timber used for the country's houses, decks, fences and furniture.

Kaituna Sawmill, owned by Nelson Forests, turns about 1.2 million cubic metres of raw logs into 55,000 cubic metres of high-grade, market-ready timber each year.

About half is sold domestically, while a quarter each goes to Australia and countries consuming more timber than they produce.

The journey from tree to timber is not the dangerous, strenuous job it once was, but a smoothly automated dance of saws, claws and conveyer belts, supervised by people in high-vis, hard hats and earmuffs.

More >>

Source: Stuff news

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Significant fine for wood manufacturer

Massive fine for serious injuries at wood manufacturer - WorkSafe New Zealand is serious about stopping unsafe work practice. Two similar health and safety failings within three months have cost Rotorua timber company Claymark Limited over $680,000 in fines, reparations and costs.

WorkSafe says that one serious injury on a company’s watch is bad enough, but that a second in close succession shows an unacceptable approach to worker safety.

Claymark was sentenced in the Rotorua District Court yesterday after two of its workers sustained serious injuries while operating machinery on two separate occasions.

In the most recent incident at the company’s Vaughan Road site in Rotorua, a worker had his hand caught in machinery used to de-stack timber when trying to reinstate a dislodged chain. The worker lost the tips of his middle, index and little fingers as a result of the incident.

WorkSafe’s investigation found there was inadequate guarding on the machinery and no documented safe procedures for workers to follow when a chain became dislodged. The injured worker had also not been trained on the location of the emergency stop buttons on the machine (one of which was not fully operative or clearly marked). For this incident, Claymark was fined $264,000 and ordered to pay reparations of $4,000 in addition to $24,000 already paid.

Less than three months earlier in December 2016 a worker’s hand had to be amputated after it was drawn into a wood planer at the business’ Kopu plant in Thames. A WorkSafe investigation found the planer was not appropriately guarded at the time of the incident (the guard supplied by the manufacturer was located by WorkSafe inspectors sitting in a cupboard above the planer) and there was no system of regular inspection to ensure guards were present and functional. For this incident, Claymark was fined $330,000 and ordered to pay reparations of $42,000 in addition to $10,000 already paid.

WorkSafe’s Head of Specialist Interventions Simon Humphries says companies must learn from health and safety incidents.

“The first incident should have led Claymark to immediately review its health and safety procedures across its plants and ensure machines were properly guarded.

“When the risk was identified as a result of the first incident, step one should have been to check guards were in place, ensure operators were properly trained in the machines’ use and, critically, have effective emergency stop devices in place that workers are aware of.”

Source: WorkSafe NZ

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Carbon market update: Carbon Match

With the government standing by its fixed price option at a level of $25 until at least May, you could be forgiven for thinking that a rational compliance buyer might be unwilling to bid more than about $24.75.

But we all know that the picture is more complicated than that and so right now NZUs remain well bid to the $24.90/$24.95 mark on Carbon Match and we have reasonable volume offered for sale from $25.05. Forest owners and forestry consultants are currently under way filing returns and as units are issued to post-89 foresters on the back of this perhaps we will see further volume come to market.

One issue to bear in mind is that this year's $25 FPO, all else held constant, will have spill over effects into next year's demand and prices. It's currently unclear whether the May 2020 surrender deadline will still involve an FPO of $25, some other number or even be replaced by a new cost containment reserve by then - something officials are currently working on, but which also requires legislative change to take effect.

But what is clear now, at least in respect of compliance year 2018, is that emitters have the right to pay $25 - instead of surrendering the units they've acquired over the last year or more. For some, this will be a legitimate response to regulatory uncertainty. This year's FPO could be next year's safety valve and the extent to which the FPO drives banking this year will determine residual demand in coming compliance periods. This is the problem with price control generally, but we are where we are - snuggled right around that arbitrary $25 fixed price option, with almost every party unsure of the best course of action.

Just out of interest, that's slightly above, say, current prices for California Carbon Allowances of about US $15.50 / $22.50, but well below European Union Allowances, which finished up yesterday at €22.85, or about NZ$38.

Source: Carbon Match

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Long life of timber building celebrated

Native timber project breathes new life into Northland history - Family politics, a 120-year-old love story and modern-day research to see if native wood can be harvested sustainably for commercial use have converged in an historic church in Northland’s Matauri Bay.

The iconic Samuel Marsden Maori Anglican Church building is dedicated to the memory of Reverend Samuel Marsden, whose early missionary success can in part be attributed to chief Ruatara who provided the preacher a safe place to rest at Matauri. Marsden then sailed on to hold the first official New Zealand church service at Rangihoua in the Bay of Islands on Christmas Day, 1814.

The final step in the recent renovation of the 123-year-old building was a thanksgiving service held for a wooden floor made from totara harvested on the Kaeo farm of John McGee.

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BC loggers pleased market test to be dropped

At their annual winter convention in January, the Truck Loggers Association in British Columbia invited their forests government ministers to share details for implementing the recommendations from the Contractor Sustainability Review recently completed in BC. This included the elimination of the fair market rate test from the timber harvesting contractor and sub-contractor regulations (known in BC as Bill 13).

The following details expand on Premier Horgan’s announcement yesterday. The Minister announced the details during his address to a full room of 350 timber harvesting contractors at the Truck Logger Association’s 76th annual Convention & Trade Show.

The fair market rate test is a forestry-industry method used to settle rate disputes between contractors and licensees, which have caused lengthy delays in reaching a settlement, contributing to the inability to operate sustainably their businesses. Following extensive consultation in an effort to ensure the forest industry continues operating, the government’s decision to eliminate the method in favour of models and experts will streamline the process that used to take months and years, which should now take up to a maximum of 14 days.

“Elimination of the fair market rate test is a monumental change for our industry, allowing contractors to more equitably share in the value of the timber resource,” says David Elstone, executive director of the Truck Loggers Association.

“It will result in a fundamental shift in the relationships between contractors and their employers across the province.”

Today, Minister Donaldson explained that a six-month process to make the legislative changes will involve continued industry stakeholder consultations, leading to implementation in the fall.

“As a contractor who operates under the Timber Harvesting Contractor and Sub Contractor regulation, these changes should have a direct impact on my business’ ability to be more sustainable,” says Rob Wood, President of Holbrook Dyson Logging in Campbell River. “While a small percentage of the industry operates under this regulation, I believe these changes will influence all non-Bill 13 contractors across the province as well.”

Source: TLA news release


Following the completion of the long-awaited Contractor Sustainability Review and its resulting recommendations, Premier Horgan announced a significant change to the Timber Harvesting Contractor and Sub-contractor regulation, which was the elimination of the fair market rate test. The Premier made his announcement during his address to a full room of 350 timber harvesting contractors at the Truck Logger Association’s 76th annual Convention & Trade Show.

“Today’s announcement is what we were hoping for and will result in a fundamental shift in the relationship between contractors and their employers across the province,” said David Elstone, executive director of the Truck Loggers Association. “Elimination of the fair market rate test is a monumental change for our industry, allowing contractors to more equitably share in the value of the timber resource.”

The Premier also made a commitment today to exploring solutions that the TLA has put forward to address the industry’s acute skilled labour shortage.

“After advocating for a training tax credit over the past three years, we are thrilled to hear this announcement,” said Elstone. “We are facing unprecedented retirement in the forest and logging industry, and even today there are far too many logging trucks and heavy equipment sitting idle due to the lack of experienced and competent operators. This may open up substantial opportunity for contractors’ needs for on-the-job training province- wide.”

Source: Wood Business


Buy and Sell

... and finally ... time for a laugh

The past, the present and the future walked into a bar together.................it was tense!!


'You know, they say the world can be a nasty place. But somebody actually complimented me on my driving today. They left a little note on the windscreen. It said, 'Parking Fine.' So that was nice.'


It's cold in Canada right now. But kids have it easy today getting a ride to school in the family SUV. When I was a kid, we walked 10 miles to school every day, sometimes in the rain or snow. Man, did we feel stupid when we found out there was a bus.


"I just bought a microwave fireplace... You can spend a whole evening in front of it in only eight minutes."


St. Peter was sitting at the Pearly Gates when two guys wearing dark hoodies and sagging pants arrived. St. Peter looked out through the Gates and said, "Wait here. I’ll be right back."

St. Peter goes over to God's chambers and tells him who is waiting for entrance. God says to Peter: "How many times do I have to tell you? You can't be judgmental here. This is heaven. All are loved. All are brothers. Go back and let them in!"

St. Peter goes back to the Gates, looks around, and lets out a heavy sigh. He returns to God's chambers and says, “Well, they're gone."

“The guys wearing hoodies?" asked God.
"No, the Pearly Gates” replied St. Peter.


Tom is applying for a job as a signalman for the local railroad and is told to meet the inspector at the signal box.

The inspector decides to give Tom a pop quiz, asking: "What would you do if you realized that two trains were heading towards each other on the same track?"
Tom says: "I would switch one train to another track."

"What if the lever broke?" asks the inspector.
"Then I'd run down to the tracks and use the manual lever down there," answers Tom.

"What if that had been struck by lightning?" challenges the inspector.
"Then," Tom continued, "I'd run back up here and use the phone to call the next signal box."

"What if the phone was busy?"
"In that case," Tom argued, "I'd run to the street level and use the public phone near the station."

"What if that had been vandalised?"
"Oh well," said Tom, "in that case I would run into town and get my Uncle Leo."

This puzzled the inspector, so he asked, "Why would you do that?"
"Because he's never seen a train crash."

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

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

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