WoodWeek – 11 March 2020

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Greetings from our wood news desk. This week, as many workers, contractors and smaller exposed businesses across our industry feel the pain of China’s trade lockdowns, we have an opinion piece on how Government ministers might have been able to help our industry to keep some eggs out of the China log basket. The author of today’s guest editorial has already put his money where his mouth is, so to speak, with the massive upgrade of the Red Stag sawmill and downstream wood processing plants on their Waipa site here in Rotorua.

Marty Verry advocates for four policies that are practical and timely. The first among them is the long-promised government wood procurement policy. The second is the Harvest Wood Products. These are the international carbon accounting credits now earned by countries for converting logs into long-life wood products. Third, the steel and concrete industries need to be brought fully into the ETS, instead of being subsidised with partial exposure as is currently the case. Finally, Provincial Growth Fund grants should be used to support processing of new products not currently made in New Zealand.

Confirming the hurt, FICA says the supply chain log-jam crisis is now dire and contractors are reaching breaking point in an ever-worsening situation. They say our contracting workforce is more vulnerable than ever before in any previous market crash. With the 1990’s planting boom being harvested now, a greater proportion of the national cut is from smaller forests.

Next week we are running our ForestTECHX conference in Vancouver with a truly international line-up of innovative speakers. We have strong support from both key leaders and decision makers across many Canadian and American forest companies.

Finally this week, we are seeking expressions of interest from innovators for the HarvestTECH 2020 conference and exhibition. It is focussed on log scaling, log segregation and loading, wood transport, logistics and data integration through the wood supply chain. This FIEA conference series runs 16-17 September in Melbourne and on 22-23 September in Rotorua.

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Four policies: It’s not too late

OPINION: Four policies could have saved 750 forestry jobs and it's not too late – With the Chinese demand for logs grinding to a halt, Finance Minister Grant Robertson is urging government departments to come up with policy ideas to diversify markets and prevent 1,500 forestry workers losing their jobs.

He wouldn't need to had Labour implemented its 2017 election promise to support the forestry industry with government procurement. Increasing supply to local sawmills is a far safer and more predictable option that leaving 60 per cent of our logs in the China basket.

Consultancy Deloitte estimated that if policy changes lead to a 25 per cent increase in wood's domestic market share there would be demand for an additional 313,000 cubic meters of structural timber annually. Add to that the resulting volume of export and lower grade timber and the extra demand is over 1 million cubic metres. That needs 1.75 million cubic metres of logs.

These cubic metres of logs support 750 forestry, transport and port jobs, NZIER estimations of log volume per New Zealand forestry worker show. But the policy was never implemented. The Forest Owners Association estimates 1500 jobs could go this year. Half of those could have been saved.

It should have been done under Steven Joyce as economic development minister, but it was never his policy. It is Labour, Green and NZ First party policy though. Labour campaigned hard on it in 2017, and got elected to implement it.

Successive ministers — Parker and now Twyford — have not prioritised it, yet. Effectively government procurement has instead backed overseas cement and steel manufacturing jobs. The damage is done. It's too late to save many of the jobs being lost.

Rather than point the finger at those who presided over delays we need to use this opportunity to put the policies in place now to rebuild those 750 jobs.

So here's a package of four policies ministers Robertson, Parker, Twyford and Jones should prioritise.

The first among them is the long-promised government wood procurement policy. New Zealand architects, engineers and builders have the experience required to design these now. The Deloitte analysis calculated a net present value of $411m within five years from increasing wood's market share by 25 per cent. That took no account of the carbon value of the policy. It will also generate 1050 new jobs in the wood processing sector.

Economic Development minister Phil Twyford says the Government has plans to support families affected by the downturn in the forestry industries due, in part, to the coronavirus outbreak. Many parts of the world have these policies.

France recently announced it will require government buildings to be built with at least 50 per cent wood, following the announcement by the local government in Paris that all buildings up to eight storeys high for the 2024 Olympic games must be all-timber construction.

Immediate implementation of the policy will help stem some jobs losses in the short term. Mills will expand and forest investors will plant more trees knowing there will be a stronger, more reliable domestic market for logs in the future.

It's also crucial we shore up confidence in forest investors if we are to achieve our 1 billion trees climate change targets. The domestic market for log processing is the obvious choice given the plethora of billion tree programmes around the world that will target China for sales, including the World Economic Forum's Trillion Tree programme that President Trump has just committed US support for.

Broader regulation here that all buildings must achieve Embodied Carbon neutrality would be consistent with the Zero Carbon Act and the government's efforts to support a bio- economy. Embodied Carbon is the carbon associated with materials used when a building is constructed.

Coronavirus has hit the forestry industry hard, with a log-jam at Chinese ports due to restricted movement and a drop in available workforce.

Indeed, research by Canterbury and Victoria Universities and Scion helped establish that New Zealand could be carbon neutral in building structures if two-thirds of all mid-rise buildings were made predominantly with wood. This could be done by 2025, eliminating much of the 10 per cent Embodied Carbon that research company ThinkStep estimates is caused by building construction.

The second is the Harvest Wood Products. These are the international carbon accounting credits now earned by countries for converting logs into long-life wood products. Just as foresters earn carbon credits for locking up carbon for the first 28 years in trees, so too do wood processors for locking it away for a further 50-to-100 years.

The credits should be devolved as soon as possible to those processors earning them, to help fund the capital projects required to process the one million cubic metres of timber targeted by the wood procurement policies referred to above.

Third, the steel and concrete industries need to be bought fully into the ETS, instead of being subsidised with partial exposure as is currently the case. For imports from countries that don't put a cost of carbon on steel and cement, a carbon-linked boarder adjustment tariff should be applied to level the playing field with New Zealand producers.

In 2017, Labour promised to support the forestry industry with government procurement, favoring wood over concrete and steel.

Finally, Provincial Growth Fund grants should be used to support processing of new products not currently made in New Zealand. Practically every other country provides this type of support for wood processors that New Zealand processors have to complete with. We need a level playing field.

These four policies – Wood Procurement/Embodied Carbon, Harvested Wood Products, bringing concrete and steel into the ETS and grant support – are the easy-win policies to potentially add 1,800 jobs back into our forestry and wood processing sector and reduce our reliance on China.

Marty Verry is the chief executive of the Red Stag Group which invests in forestry, wood processing, pre-fabrication, Cross Laminated Timber (CLT) and property development.

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FICA: Some people near breaking point

The Forest Industry Contractors Association (FICA) says forestry crisis is dire and contractors are reaching breaking point in an ever-worsening situation. Rapid impacts have been felt over the past month by the forestry industry with the effects of the outbreak of the Coronavirus, with many out of work and in serious financial crisis. CEO Prue Younger says people outside the industry are largely unaware of the seriousness of the crisis.

“We need to have politicians, government officials and the public outside of forestry fully understand just how dire our sector of the industry is for our contractors,” she says. “Logging and forest roading contractors who employ the bulk of the people and carry the highest debt have been hit extremely hard. The planting crews are the least effected for now, but their work will inevitably be impacted if depressed log prices continue long enough.”

The contracting workforce is more vulnerable than ever before in any previous market crash. As a consequence of the mid 1990’s planting boom, far more of the national cut is now in smaller forests. Smaller owners have a short window to harvest and are far more sensitive to price drops than larger corporate forests historically were. Lay-offs are a direct result, with hundreds of workers already laid off and more to follow.

“Our contractors do not have cash reserves to sustain unemployed staff or the capital repayments on their machinery,” Younger says. “To top it off, we are now heading into winter, when economic conditions typically only get tougher for contractors.”

The effects to transport are being felt as well where logging truck drivers are a good example of the flow on this is having to the supply chain flow. As the harvest volume drops, the truck drivers get laid off and then the ports and stevedore companies feel the pressure of unemployment too.

Log Transport Safety Council (LTSC) Chairman Warwick Wilshier says trucking contractors are mirroring the downturn equally with forestry contractors. At the same time logging truck contractors are concerned about the work being carried out around deployment.

“The lack of truck drivers prior to the COVID-19 crisis was bad enough and now their drivers are seen to be an easy target for work in other industries like horticulture, freight and road maintenance,” says Wilshier. “After a few weeks of paying wages and getting no work in, there is only one option – for contractors to relinquish their staff to other opportunities outside of forestry,” says Warwick. “It is hardly ideal, and the fear is that they will walk and not come back. When work starts up again there is going to be a massive hole in the workforce that will take time to build up.”

Those same sentiments are being felt as FICA engage with deployment opportunities being offered to contractors by horticulture.

“About to start their season, they are desperately short of equipment operators, along with tractor and forklift drivers, and the skills learned in forestry are generally transferrable,” says Younger.

“The social dilemma is turning our focus to support our workforce in maintaining some income for families and whanau. We acknowledge the extreme social effects this crisis is having on redundant employees. We already had a significant issue meeting our workforce needs in forestry, so when business starts up again, we are going to be in a crisis situation with gaining back a skilled workforce.”

Contractors have reached breaking point where some have been off work for four weeks and can no longer carry their staff with wages that are eroding their own pockets. They are now regrettably reaching out to offer them deployment options into other industries.

The solution isn’t a simple one, but more needs to be done by Government and Forest Owners to preserve and retain a skilled workforce.

More >>

Source: Stuff and Scoop

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HarvestTECH 2020 - Call for speakers

We are seeking expressions of interest from innovators for HarvestTECH 2020 - Our HarvestTECH conference and exhibition that ran last year SOLD OUT. It was the largest gathering of our sector and also drew international interest.

Close to 500 harvesting contractors, harvest planners, forestry managers and equipment and technology suppliers into the region’s logging industry attended.

In addition to most major New Zealand contractors there, a large contingent came across from Australia, North and South America and SE Asia. It well and truly established itself on the international stage. This year, the previous wood transport and logistics event run by the Forest Industry Engineering Association (FIEA) is being brought under the HarvestTECH brand.

HarvestTECH 2020 will be focussing on log scaling, log segregation and loading, wood transport, logistics and data integration through the wood supply chain.

It will be running on 16-17 September in Melbourne, Australia and then again for the New Zealand industry on 22-23 September in Rotorua.

What's being covered?

New technologies, new processing systems and case studies to showcase “new technology and smart operating practices” in log loading and wood measurement, wood transport and logistics will be profiled at the HarvestTECH 2020 series in September. Further early details on content can be found on the event website, www.harvesttech.events/ht20.

You may have a recent case study of technologies or systems that you have employed within your own business that you could share, you could have developed a product that’s really making a difference out on the skid site, in transporting wood to the processing plant or port, you may represent a tech or equipment supplier to this part of the industry or you will, come September, have completed research or trials that could be presented to the wider industry. If so, we’d like to hear from you.

If interested in being involved as a presenter, please email brent.apthorp@fiea.org.nz or phone: (+64) 21 227 5177 to discuss. Details on opportunities to exhibit in both countries will be available shortly but if keen on receiving information as soon as it is available, please contact gordon.thomson@fiea.org.nz.

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Trade: It's no secret we rely on

China is NZ's top trading partner - China was New Zealand’s top trading partner in 2019, Stats NZ said yesterday. Since 2017, China has been New Zealand’s top trading partner, and from 2013 the second-largest trading partner.

In the year ended December 2019, 23 per cent of New Zealand's total goods and services exports and 16 per cent of imports by value were with China. Two-way trade in goods and services with China was worth $33.4 billion in 2019, with exports worth $20.1 billion and imports $13.3 billion. This resulted in a trade surplus of $6.8 billion. New Zealand’s trade surplus with all countries was $2.6 billion at the end of 2019.

New Zealand’s top four exports to China were dairy products (milk powder, butter, and cheese), wood (logs, wood, and wood articles), meat (meat and edible offal), and travel services (including spending by holidaymakers, business travellers, and students).

“The latest annual figures, from before the outbreak of COVID-19, show that China is an important market for both goods and services. About a third of our dairy exports go to China – almost 60 percent of our forest products and over 40 percent of our meat,” international statistics senior manager Peter Dolan said.

China is New Zealand’s second-largest source of imports. “New Zealand imports from China include a wide range of products for our homes and businesses. Nearly two-thirds of cellphones and over 70 percent of computers were imported from China in the December 2019 year,” Mr Dolan said.

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Source: StatsNZ

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SnapSTAT - China exports then and now

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Update: China wood markets

Big rise in logistics costs - Wood365 has reported that the China Logistics and Purchasing Federation (CLPF) found that 85% of enterprises report the epidemic is having a huge impact on their operations and some risk bankruptcy. Many enterprises considered starting operations after the 10 February deadline but most did not resume work.

Transport and freight rates have started to rise apparently the result of the current epidemic. In a survey the CLPF found 70% of companies thought transport costs would increase by more than 10%, but around 40% said they would rise by more than 20%. Some even suggested a 30% rise.

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Lanzhou City – the logistics centre for Russian timber It's been reported that Russian timber will be distributed to all parts of the country after arriving via the China- Europe express railway terminal in Lanzhou City, Gansu Province. This, say analysts, will promote the wood processing industry and strengthen the supply chain for imported timber in the Western region.

The Lanzhou New Industrial Zone is a major logistics centre for Russian timber and it is anticipated the Zone will attract investment in processing thus establishing a new industrial cluster.

Source: ITTO TTM Report

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Competitors: Russia logs to Japan down

To other markets Russian softwood log import to Japan for the first eleven months of 2019 was 95,541 cubic metres, or 19.7% down on the same period of 2018. In particular, larch log import from the Russian Far East decreased much with about 62,398 cubic metres, 35.5% less. Larch has been mainly used by the Japanese plywood mills but by higher log export duty, the demand is shifting to Russian made veneer.

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Waratah releases new app

The new app provides more accessibility to information for owners to set up and service their Waratah 600 Series machines.

Waratah Forestry Equipment has released the new WaratahPlus mobile app, available as a free download on the App Store for Android and iOS platforms. It is intended to help with daily maintenance and other in-field procedures. The WaratahPlus app helps increase uptime by providing operators with the information they need to quickly service the machine.

The App has been designed to be accessible and easy-to-use that not only helps with the set-up process, but also provides customers with readily available information - taking any questions out of the day-to-day or not-so-routine tasks. The new reference tool provides a quick overview of key adjustments and helps answer basic service questions. The menu includes selections for service, setup, calibration, diagnostics and safety related information. Step-by-step processes help outline procedures so the operator can quickly perform the required action. Caution notes help ensure safety measures are followed when any work is performed on the head.

The Waratah 600 Series 3- and 4-roller line includes the HTH616C, HTH618C, HTH622B, HTH622C 4x4, HTH623C, HTH624C 4x4, HTH624C, HTH625C and HTH626 Series-II. The 600 Series is available to customers in the United States, Canada, Latin America, Brazil, Australia, New Zealand and Russia.

More >>.

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Austrian buys farm for forestry

An Austrian billionaire has been granted consent to purchase an $8m Hill Country farm. The Overseas Investment Office (OIO) has granted Wolfgang Leitner consent to buy a 800ha property located in Kotemaori, Wairoa and convert it to forestry.

The property known as Ponui Station currently has 714ha being grazed by sheep and beef stock. Leitner plans to plant a further 640ha of commercial forest. Ponui Station currently has just 14ha of existing commercial forestry.

More >> https://ruralnewsgroup.co.nz/rural-news/rural-general-news/austrian- billionaire-to-convert-farm-to-forestry

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Tigercat Releases 602 Grapple Skidder

Quick, compact and fuel efficient, the 602 grapple skidder is ideal for high value selective logging in tight or challenging terrain.

The size and agility of the 602 grapple skidder makes it ideal for selective felling applications. The machine can access high value timber in steep terrain, while minimizing damage to the residual stand. A fixed front axle with an oscillating centre section allows the 602 to achieve a narrow overall width of 2,7 metres (106 in).

The Tigercat FPT N45 Tier 4f engine delivers 125 kW (168 hp) at 2,200 rpm while conforming to emissions standards for North America and Europe.

Performance in tough terrain is excellent with no gear shifting required. Full tractive effort is available at any engine speed, minimizing wheel spin and improving breakout performance.

Maximum fuel efficiency is achieved by the use of Tigercat’s load sensing hydraulic system. Electronic control technology combined with Tigercat’s unique hydrostatic drive system allows the skidder to operate at variable engine rpm, automatically increasing engine speed when additional horsepower is required.

Tigercat’s Tier 4 solution is packaged into a physically smaller engine compartment than competing machines, leading to clear operator sightlines. Excellent cab ergonomics, Turnaround® and the benefits that come with hydrostatic drive, along with painless maintenance routines, make the Tigercat 602 skidder a top choice among operators.

Source: Tigercat

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Buy and Sell

... and finally ... EV goes good with wood

Newron Motors’ Impressive EV-1 Electric Motorcycle available for pre-orders – A badass looking motorcycle that’s electric and is now open to pre-orders. The French company, Newron Motors, released a prototype last year that’s now seemingly going to hit the roads in a short while.

The Newron EV-1 is a wood panel electric motorcycle, and it’s striking.

Its 75 kW PMAC engine gives the motorcycle 240 Nm of torque, allowing the bike to go from zero to 100 kph (62 mph) in under just three seconds. Its electronically controlled top speed reaches just under 220 kph (137 mph), and even from a standstill position, it can attain maximum torque.


and finally, ignore all rumours to the contrary >> Paper is not dead!

Here's proof >>

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

John Stulen

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