WoodWeek – 1 May 2019

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Greetings from your WoodWeek news team. The sun is shining, the leaves on the trees are aglow with colour and exports are at record highs – what could possibly go wrong? Don't ask, lets just enjoy the economic and seasonal glow while it lasts.

Yes, indeed, the numbers are in – exports hit a new high in March, driven by higher exports of dairy, meat, and forestry products, especially to China, according to Stats NZ reports. In March 2019, the value of total goods exports rose $899 million (19 percent) from March 2018 to reach $5.7 billion. This was a new record for any month – the previous high for monthly exports was in December 2017.

In contrast, the value of total goods imports in March 2019 fell $174 million (3.5 percent) to $4.8 billion in March 2019. The monthly trade balance was a surplus of $922 million, the highest since the April 2011 record goods trade surplus for all months ($1.2 billion).

Moving to our industry numbers – Total forest products revenue is forecast to reach $6.8 billion for the year ending June 2019, an increase of 7.0 percent from 2018, based on strong growth in log export volumes. Much of this growth has come from increased Chinese demand for New Zealand logs, supporting both robust prices and near- record export volumes.

Log export revenue reached a record $972 million for the December quarter, almost 2 percent up on the previous quarter and 6 percent up on the same quarter last year. As a result, the log export forecast for the year ended June 2019 has been revised upward to $3.6 billion.

This week’s innovation update is oddly appealing - Wood is an established and versatile construction material, used to build everything from high-rises and airports to apartment buildings. It also, however, is not immune to catching fire. A new coating could help keep that from happening, and - here's the twist - it's actually made from wood.

And, in line with the wood harvesting theme, registrations continue to pour in for the 26-27 June HarvestTECH 2019 event (www.harvesttech.events) in Rotorua. Already, we have around 50 Australian and Canadian delegates signed up – in addition to kiwis from across the country. It’s going to be a full house. All exhibition spaces, including the largest line up of new harvesting machines and equipment yet seen at this event, have been sold. If interested in securing a registration for you or your crew to the event, the message here is that you should do this sooner, rather than later.

Finally this week we have an update on the memorial service for the late Thomas Song. A remembrance service for him is on Monday 6 May at 11am at the Auckland War Memorial Museum. Please RSVP to [email protected] as soon as possible. Parking on site.

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Update: Log export markets

Log export markets - This week we've got our monthly update from the Champion Freight team. In short China is up again, all other key Asian log markets are down.

The chart shows total log export values to China year-on-year to the end of March were up 20 percent year-on-year contributing to overall log exports growing 16 percent across all markets.

To the end of March, China shipments month-on-month are up 39 percent and overall log exports up 21 percent.







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Conference: Farm forestry sets new direction

The upcoming Farm Forestry Association Conference on 16-20 May in Rotorua will begin to chart a new direction and reformation for new and existing members.

Small scale forestry is likely to have a major role in sustainable land use for New Zealand's future says conference organising chairman Graham West.

"Many issues are aligning and giving clear direction the future economic model for land use will need to integrate more tree crops."

Rising market demand for environmental stewardship and sustainable products has accelerated Government policy toward a trend that will incentivise or regulate for change to land use that have better strategic positioning for future generations.

The conference has a great speaker lineup:

  • Steve Wilton, from the Forest Growers Levy Board, will outline who are the small-scale owners that now contribute 25-30% of the Levy
  • Te Taru White will offer insights on what role there is for Maori in small scale forestry
  • Professor Bruce Manley will report on the status of small-scale forests and what are the expected impacts on wood supply
  • Susan Kilsby, ANZ economist, will explore what are the major economic drivers of a good forestry investment
  • Kim von Lanthen, from ForestX, will explain new financial structures and private funding sources for forest investment
  • Ruth Fairhall, Te Uru Rakau, will present the government policy’s and incentives that provide encouragement for small forest growers
  • Emeritus Professor Warwick Silvester will talk about shifting the narrative on native forests



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March was a record month for exports

Exports hit a new high in March, driven by higher exports of dairy, meat, and forestry products, especially to China, according to Stats NZ reports.

In March 2019, the value of total goods exports rose $899 million (19 percent) from March 2018 to reach $5.7 billion. This was a new record for any month – the previous high for monthly exports was in December 2017.

In contrast, the value of total goods imports in March 2019 fell $174 million (3.5 percent) to $4.8 billion in March 2019.

The monthly trade balance was a surplus of $922 million, the highest since the April 2011 record goods trade surplus for all months ($1.2 billion).

“Despite March 2019 being a strong month for exports, imports have been generally rising faster than exports in recent months,” international statistics manager Tehseen Islam said.

“The annual goods trade deficit remains at high levels – it was $5.6 billion in the March 2019 year.”

Dairy products lead rise in exports - Exports of dairy products led the rise in exports, up $264 million (22 percent) to $1.4 billion in March 2019.

This rise was led by milk powder, up $226 million on a year earlier. The rise was quantity-led, but unit values also rose, up 6.5 percent on March 2018. There were contrasting movements in other dairy commodities: the value of cheese exports rose $42 million, while butter exports fell, also by $42 million.

Other main contributors to the rise in total exports were meat and edible offal, food preparations (a commodity group that includes infant formula), forestry products, and fruit.

Of our main export markets, China had the largest increase, up $522 million (52 percent) to $1.5 billion. “Exports to China were the leading contributor to increases in several primary sector commodities including dairy products, beef, lamb, and forestry products,” Mr Islam said.

Petroleum and products lead fall in imports - Imports of petroleum and products (down $130 million) led the fall in goods imports in March 2019.

Other main contributors to the fall in imports were vehicles, parts, and accessories (down $86 million), and aircraft and parts (down $71 million). These falls were partly offset by a rise in electrical machinery and equipment, up $44 million.

The Government Statistician authorises all statistics and data we publish.

Source: Scoop News


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Memorial service for Thomas Song

As you will be aware, Thomas Song, the founding Managing Director of Ernslaw One passed away on Sunday 14 April in Sibu, Malaysia after a short illness. Sibu was his hometown so his funeral was held there later that week.

A remembrance service for Thomas Song is going to be held Monday 6 May at 11am. The service will be held in Auckland at the Auckland War Memorial Museum. Parking on site.

It you are planning to attend please RSVP to [email protected] as soon as possible.


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MPI forestry exports update

From the current market report entitled - 'Situation and Outlook for Primary Industries' published by the Ministry for Primary Industries in March 2019 comes this summary for forestry exports:

Total forest products revenue is forecast to reach $6.8 billion for the year ending June 2019, an increase of 7.0 percent from 2018, based on strong growth in log export volumes. Much of this growth has come from increased Chinese demand for New Zealand logs, supporting both robust prices and near- record export volumes.

Log export revenue reached a record $972 million for the December quarter, almost 2 percent up on the previous quarter and 6 percent up on the same quarter last year. As a result, the log export forecast for the year ended June 2019 has been revised upward to $3.6 billion.

Demand is expected to remain steady over the next year, with an expected increase in Chinese residential construction despite a weakening Chinese economy.

There is also an expectation that China’s government will increase spending on infrastructure to help stimulate the economy. Any increase is likely to support demand as New Zealand logs are often used for boxing concrete.

More >>


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Eastland Port: Another solid year

New Zealand’s Eastland Port, Gisborne, achieved an annual tonnage throughput of just under 2.9 million tonnes of cargo in the year to March 2019, slightly down on last year’s record-breaking result. “The 12-month period was another very strong year for throughput at Eastland Port with vessels taking this district’s export product to South Korea, Japan, China, and Singapore,” says general manager Andrew Gaddum.

In the year to 31 March 2019, 140 ships handled 2,956,071 tonnes of cargo at Eastland Port. Of that, 126 ships took away 2,941,324 tonnes of logs. Mr Gaddum says the record of 3,000,766 tonnes of cargo handled in a year was set in 2018. The lower log export volume in 2019 was primarily due to the floods in June last year which significantly impacted the region’s harvesting and transport infrastructure.

While the annual record wasn’t surpassed there were other milestones reached in the time period. Eastland Port marked a cart-in record-setting day after 15,004 tonnes of wood arrived and was processed on Tuesday 19 March 2019. “To put that in perspective that’s about half a ship worth of wood,” says Mr Gaddum. The previous record of 14,838 tonnes was also set during the year on 18 December 2018.

Processing 15,000 tonnes of wood in a day on port represents thousands of hours of work by a range of people beforehand - the port is just the last part of a process thousands have played their part in.” Mr Gaddum says a ship carrying 30,000 tonnes of logs injects over NZ$3 million into this economy.

“It provides the forest owners a return and importantly creates many direct and indirect jobs within this community. More than 50 percent of the above amount goes to pay locally based contractors and suppliers, regardless of who owns the trees.”

Mr Gaddum says that as well as being the vital link for wood export there is also a growing need for the port to provide for higher value break-bulk products and container exports from the forestry, horticultural and agricultural industries. “Collectively these industries provide a very strong foundation on which to continue with the port’s repairs, maintenance and development work, known as the twin berth development plan,” says Mr Gaddum.

Source: Eastland Port


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Australia: Report confirms reduced fatalities

In Australia, national figures released as part of a new report unveiled shows a significant decrease in truck fatalities. The report issued by the National Truck Accident Research Centre confirmed fatalities involving commercial vehicles dropped by 14 per cent over the past two years with predictions fatalities could be reduced even further to zero by as soon as 2032.

An analysis of Australia’s largest database of major crashes involving heavy vehicles shows a downward trend, with the number of fatal truck accidents the lowest in nearly two decades. Released at the Australian Trucking Association’s National Trucking Conference in Perth, the report found the trend has Australia within a generation of achieving zero deaths from crashes involving heavy vehicles.

Report author Adam Gibson, of National Transport Insurance, said the decline in the number of heavy-vehicle involved deaths between the 2017 and 2019 equated to an estimated 1545 lives being saved. “Encouragingly we’ve seen the lowest number of fatigue-related crashes in the report’s 16-year history. Fatigue was the cause of 9.8 per cent of major crashes, down from 20 per cent a decade ago,” he said.

The report also found nation-wide, the overall number of crashes caused by fatigue was down. Findings across the states included that two out of every five serious fatigue accidents occur in New South Wales; Queensland was 51 per cent higher than the national average for the risk of a fatigue accident; in Western Australia 15 per cent of the state's major truck crashes are the result of fatigue; and fatigue-related crashes in Victoria and South Australia decreased in the last two years by 68 per cent and 40 per cent respectively.

Australian Trucking Association Chair Geoff Crouch welcomed the results although says there is still work to be done. “We need to see a strong commitment from our government for practical safety solutions like an improved truck driver licensing system and mandatory safety technologies for new trucks,” he said.


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China: Russian lumber rules imports

While both New Zealand and Russia are at the top of the leaderboard for softwood log imports into China, as the accompanying table shows, Russia tops the leaderboard for sawnwood imports.

That is largely driven by export tariffs on logs by Russian government which incentivises sawing Russian logs on their side of their border with China.

Source: MIS ITTO Report









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Innovation: Wood as a fire retardent

Wood is an established and versatile construction material, used to build everything from high-rises and airports to apartment buildings. It also, however, is not immune to catching fire. A new coating could help keep that from happening, and it's actually made from wood.

Developed in Finland by scientists at the VTT Technical Research Centre, the solution incorporates nanocellulose, which in turn consists of microscopic cellulose fibres obtained from wood pulp.

Manufactured utilising a patented technology known as HefCel (High- Consistency Enzymatic Fibrillation of Cellulose) the gel-like nanocellulose reportedly has 10 times the solids content of similar materials. As a result, when applied to wood – which nanocellulose naturally adheres to – it's very good at forming an airtight barrier that keeps oxygen from reaching that wood's surface. This means that the wood is significantly less likely to combust when exposed to a flame.

It is thought that the coating could be particularly useful when mixed with a pigment, then applied to wood in the form of a sprayed- or brushed-on paint or stain.

Initial batches of the HefCel-based coating have reportedly performed well in lab tests, and an energy-efficient production process has been developed. The scientists are now working on scaling up that process, making it simpler yet at the same time even more efficient. They're also currently looking for an industry partner to help commercialise the technology.

Photo caption: HefCel-coated wood (left) and untreated wood (right) after 30 seconds flame test. (Photo: VTT)

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Source: VTT


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... and finally ... old guys and technology

A couple of elderly men were venting their frustrations about the woes of modern technology.

"I just can't ever seem to remember my darn passwords," grumbled one of them.

The other one smiled. "Oh really? I can never forget mine!"

"How do you manage it?" asked the first guy curiously.

"Well, I simply set all my passwords to 'Incorrect' so that whenever I'm told that my password is incorrect, I'll remember it!"

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Millions of years ago, there was no such thing as the wheel.
One day, some primitive guys were watching their wives drag a dead mastodon to the food & fire area. It was exhausting work; the guys were getting tired just watching.

Then they noticed some large, smooth, rounded boulders and they had a great idea! They could sit on top of the boulders and get a better view of their wives working.

This was the first in a series of breakthroughs that ultimately led to television...and later to the remote control.

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"My email password has been hacked. That’s the third time I’ve had to rename the cat."



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

John Stulen

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