WoodWeek – 9 September 2020

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Greetings from your log export and good-wood news team. This week we get to see the details of the "Wood Fibre Futures Stage One Report" - a future forestry forecast report commissioned by the MPI. Their new investment director Jason Wilson says, "New Zealand is considered one of the best places in the world to do business and we have a large amount of pinus radiata which gives us a comparative advantage, but we need to start working with technology investors to produce high-value, low-carbon products."

The report identified possible alternatives to concrete and steel, and biofuels made from woody biomass. It has drawn support from a number of sector organisations, subject to comments that this will require serious strategic leadership and commitment from Government to make it happen. The Bioenergy Association welcomed the report but also wants greater focus by government on the immediate use of forest harvest and processing residues for replacing coal.

For our part, we’re excited to see that mass timber gets a brief mention on Page 22: "Technologies such as CLT are fully commercial. Market development is needed to further growth in this area including code development and government demonstrations. Long-term competitiveness is needed to widen application by building height and type."

Missing our conferences? (we are!) Well, if you've got your new 2021 diary, here's a date to note for 2021 (it surely must be better than 2020). Our very popular HarvestTECH Conference will be running in Rotorua on 13-14 April. The format has been changed slightly. We’ll provide online links if you are unable to travel into Rotorua. The harvesting conference program will include advances in mechanised harvesting, wood transport and logistics technologies for log measurement and scaling. Running concurrently with HarvestTECH will be our busy FIEA Forest Industry Safety & Technology 2021 conference program.

Moving from the pros of forestry to the possible cons, just across the Cook Strait, a Nelson City Council member says it’s time to rethink if the environmental costs of commercial forestry are worth its “marginal” profits to ratepayers. Nelson councillor Rachel Sanson said with a large portion of the council’s 640ha of forestry up for harvest over the next few years, it’s an opportunity to consider “a different way forward” to make use of the land. Sanson said those profits didn’t take into account externalised costs of wilding pines, loss of recreational access and sedimentation on local waterways.

Finally today, a quick trip to the statistics department where, reflecting on the pending retirement of Mark Cairns, the folks at the Port of Tauranga noted: When Mr Cairns took over as Chief Executive in 2005, Port of Tauranga handled 12.6 million tonnes of cargo and 438,214 TEUs. In the year to June 2020, the Port handled 24.8 million tonnes of cargo and 1.25 million TEUs.

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Market Update: China Log Imports

US no longer largest log supplier - The main countries supplying more than 1 million cubic metres of logs to China in the first half of 2020 were New Zealand, Russia, Germany, Australia, PNG, Czech Rep, US and Solomon Islands. Shipments of logs to China from all main suppliers fell in the first half of the year. The decline of more than 70% in shipments of logs from the US was the most significant.

In the first half of the year New Zealand was the main log supplier to China accounting for 26% of total log imports. Imports from New Zealand totalled 6.33 million cubic metres, down 64% from the same period of 2019. The second ranked supplier of logs was Russia at 3.29 million cubic metres, down 56% from the same period of 2019 and accounting for about 13.5% of the national total.

The third ranked supplier of logs was Germany at 3.29 million cubic metres, down 22% from the same period of 2019 and accounting for just over 13% of the national total. Germany has become the most important supplier of China’s log imports.

Major entry ports for log imports from Germany - Over 90% of China’s log imports from Germany in the first half of 2020 were through Qingdao Port in Shandong Province which handled around 45% of all log imports.

The other major entry points for logs were Yanshan in Shanghai, Dapeng Port in Guangdong Province, Tianjin Port and Xiamen Haicang Port in Fujian Province.

The average price for China’s log imports from Germany through Qingdao port was the lowest at US$96 per cubic metre just below the average price for logs of US$100 per cubic metre. Logs supplied to China from Germany arrived via the China-Europe Railway Express.

Source: ITTO TTM Report 31 Aug

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MPI report: Big opportunities for high-value forestry

Big opportunities for a high-value, low-carbon forestry future - A New Zealand wood fibre futures stage one report published last week identifies key wood processing technologies that could help drive a high-value and low-carbon economy.

Te Uru Rākau (Forestry New Zealand) director sector investment Jason Wilson said the report, by an international consortium led by BioPacific Partners, focused on how New Zealand could build on the forestry industry's current strengths to create a low-carbon future.

The report identified possible alternatives to concrete and steel, and biofuels made from woody biomass.

"We know forests have a big role to play in carbon mitigation, but forestry can play an even bigger role in both the economy and meeting environmental goals if it is used to create new and innovative high-value, low-carbon products including liquid fuels and replacements for coal," said Mr Wilson.

"The questions for New Zealand are what products do we need the most, what technologies are available to help us create these, and, importantly, how do we attract investment to make it happen?"

"New Zealand is considered one of the best places in the world to do business and we have a large amount of Pinus radiata which gives us a comparative advantage, but we need to start working with technology investors to produce high-value, low-carbon products."

Mr Wilson said the report identified 15 technologies out of 108 found globally that New Zealand could prioritise and laid out ways to attract investors.

"Both biocrude and liquid biofuels are favoured by investors, have the most potential for export, and are being actively developed globally by high-tech firms."

Mr Wilson said the report represented the culmination of stage 1 of the project and Te Uru Rākau was now progressing with stage 2.

"Stage 2 focuses on building an attractive investment case and undertaking a detailed feasibility study for the priority technologies. It will involve discussions with key industry partners, including those in forestry, transport, construction, and energy. We are also working closely with other agencies, including the Ministry of Transport and MBIE, to identify policy tools to incentivise investment."

This next phase of work will come under the umbrella of the Forest and Wood Products Industry Transformation Plan, and as part of the broader Fit for a Better World initiative.

"A high-value low-carbon future for the forestry sector that will deliver economically and environmentally is an exciting prospect and I am looking forward to working with New Zealand industries to achieve this."

To download the report click here.

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Marlborough: Forestry springs back

Forestry springs back post lockdown in Marlborough - Demand and prices for logs surged when New Zealand moved out of lockdown, easing pressure on Marlborough’s port swamped with stock destined for China, but unable to get there.

Despite this, there is currently a backlog of logs at Port Marlborough, due to vessel delays to Picton. In February, New Zealand’s forestry industry faced export challenges to China, after lockdown precautions resulted in almost no off take of logs.

Port Marlborough chief executive Rhys Welbourn said since moving out of lockdown, the port had a strong and consistent volume of logs delivered to the port. “Until recently this has been fairly well balanced with exports, however, at present we are carrying higher stocks owing to a number of vessel delays,” Welbourn said. He said this was expected to “self correct” in the coming weeks.

Tasman Forest Management Ltd Marlborough director Tamati Smith said straight after lockdown log export prices were high.

“That’s basically because in China they started back earlier than New Zealand, as in they came out of lockdown, so they started getting back through the stockpile that they had over there,” Smith said. “So the demand when we came out of lockdown was quite high and the prices were quite high.”

He said domestic demand for local sawmills were also full. “The export prices that we had, and that determines demand as well, were some of the best prices the industry has had,” he said. “That was a surprise. The fact that everyone had been sitting on their hands for five or six weeks, it was a surprise that the prices were so good when we came back.”

More >>

Source: Stuff news

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Exports: Statistics show strong June quarter

Stats NZ comments on June 2020 quarter: Record commodity export prices - Higher export prices for dairy, kiwifruit, and logs in the June 2020 quarter helped push overall export prices to their highest level since the series began, according to the most recent update from Stats NZ.

The export price index rose 2.4 percent in the June 2020 quarter compared with a 0.2 percent fall in the March 2020 quarter. Import prices fell slightly (down 0.1 percent), boosting the merchandise terms of trade to a new high of 2.5 percent.

“Export prices have been supported by favourable exchange rates after the New Zealand dollar fell as the COVID-19 pandemic spread around the world,” Mr Downes said.

Forestry products export prices rose 11 percent in the June 2020 quarter, following a 3.3 percent fall last quarter. Forestry products export volumes fell 20 percent in the quarter, after forest logging stopped in April as logging was considered a non-essential business during the COVID-19 lockdown.

“The domestic supply of logs for export was affected by efforts to stop the spread of COVID-19 in New Zealand while global supply constraints saw a spike in export prices over the same period,” Mr Downes said.

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Source: Stats NZ

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Eastland Wood Council thanks the local community

Kia ora - On behalf of the Forest Industry on the East Coast we want to thank the community of Uawa, and the people of the greater Tolaga Bay area, for your patience and support over the past month.

Thanks to your input and guidance, we have managed to undertake a massive clean-up operation on the Tolaga Bay beach. While there is still a lot of work to be done, we wanted to acknowledge your efforts in helping us get to this point.

Since the major storm in the middle of July, our people have been on the beach working to gather the debris that was swept down the Uawa River. The scenes of logs on the beach were unacceptable.

We heard your calls for the forestry sector to step up, and we did. The clean-up started the day the rain stopped, and when it was determined it was safe to do so.

A month later, all of the logs on the North Beach have been cleared and stacked in piles. We have also cleared most from the estuary at South Beach.

Our teams have also been doing rehabilitation work on the land and in the forest where possible – although a lot of the forest roads remain inaccessible.

This week, under the direction of the principal rural fire officer Ray Dever, the burning of over 90 piles of wood has commenced. This involves a big team. Safety is paramount, both onsite but also with air quality and there are people monitoring the air in multiple locations. Over the next two to four weeks, the piles will be burnt. Exactly when depends on the wind, as the burn only happens when it is blowing away from town.

The bill for the clean-up is ours. No ratepayer funds will be used. It’s our responsibility and we take that seriously.

As an industry we would love to say this will not happen again, but it will, however, the number of logs will be fewer over time. Decisions made by others decades ago, are hurting us now. It’s not as simple as heading into the hills and clearing the old logs. We have done that, but some will still come down. Our best efforts now are also focused on cleaning them up, if they end up on the beach.

Since 2018, our industry has changed the way we operate. Together with Te Aitanga a Hauiti, the wider community, the council and businesses, we are planning for the potential of the next event. We will do everything we can to limit the impacts on your community.

The two photos below show the difference between the 2018 floods, and this July flood. The river flows were similar in both events. While, it is not absolutely clean, what you can see are the benefits from the changes we have made - with fewer logs.

Our job is not finished, and we know that. As neighbours, we need to do better, and we will.

For now, thank you again to all in the community. The clean-up effort has been massive, and we could not have done it without you.

We appreciate the opportunity to build positive and enduring relationships with the community.

Nga mihi
Eastland Wood Council

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Local bioenergy leaders welcome valuable insights

Bioenergy sector supports obtaining greater value from New Zealand’s wood residues - The Bioenergy Association welcomes the release by Te Uru Rakau of the Wood Fibre Futures report but also wants greater focus by government on the immediate use of forest harvest and processing residues for replacing coal.

Brian Cox, Executive Officer of the Bioenergy Association said “It’s encouraging to see government supporting efforts to obtain greater value from forest harvest residues which are generally left as waste. Wood waste from forestry is a valuable resource which we squander because we don’t have a priority for using it to create regional economic opportunities, including additional employment.”

Mr Cox said that “The wood processing sector already use process residues for heat but there has been little interest in expanding the use of this proven technology to replace coal for other manufacturing process heat. Wood is a fully renewbale natural resource which is carbon neutral. The Wood Fibre Futures report invesigates many new investment opportnities but ignores the opportunities to grow the sector by first encouarging investment in existing proven technologies. This would provide a strong foundation for expanding additional sources of forestry residues into these new emerging investments.”

The BioenergyAssociation has identified that 1.8Mt CO2-e of greenhouse gases could be reduced if coal was replaced by use of biomass fuels.

Mr Cox said that “it is great that the Government has recognised that using wood waste to produce energy and other products is good for business and communities, and that proactive climate change policies can have a very positive upside to communities and the economy. We just need to have a greater sense of urgency by initially focusing on what can be achieved by 2030 while we investigate the longer term investments outlined in the Wood Fibre Futures report. ”

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South Australia: Exports cause local concerns

A South Australian regional timber processor has warned thousands of tonnes of softwood resource are bypassing mills and heading to China, despite long-term shortages facing some businesses. Softwood export volumes decreased during the start of the pandemic, but trade is again flowing through deep-sea ports in Australia.

Photographs supplied to the ABC show softwood resource — sourced from the Green Triangle commercial forestry estate in south-east SA and Western Victoria — being stockpiled at the rail internodal at Bordertown and in the wood holding yards at the Port of Portland, Victoria, ready for exporting.

This comes as the Federal Parliament's Standing Committee for Agriculture and Water Resources undertakes an inquiry into the nation's timber supply chain. On ABC radio recently, Member for Barker Tony Pasin suggested a code of conduct could be considered for the regional industry.

Mount Gambier-based Roundwood Solutions managing director Steve Telford said softwood resource was being shipped to China despite log supply insecurity facing smaller operators. "There are a million-plus tonnes of resource going offshore every year — that's a massive amount of timber," Mr Telford said. "Our forefathers planted the trees — they were planted with a plan to create jobs into the future. It wasn't about growing wood for Asia."

Mr Telford, who is an industry veteran, said every time a boat left the ports, this wood was "gone for a generation. We could 100 per cent use the logs going out of the Port of Portland —both pulp and sawlogs could be utilised," he said. Mr Telford warned emotions were running high in some sections of the industry.

"They are controlled, but they are high in their belief structures," he said. "There is no reason for sawlog to be leaving this country anymore. There are plenty of people in this country who would be more than happy to bid for those logs.”

Pictured: Roundwood Solutions Managing Director Stephen Telford

More >>

Source: ABC News

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Nelson: Decisions on forest replanting

Time for Nelson to re-think whether it wants to replant pine forests - It is time for Nelson to rethink whether the environmental costs of commercial forestry are worth its “marginal” profits to ratepayers, a councillor says.

Nelson councillor Rachel Sanson said with a large portion of the council’s 640ha of forestry up for harvest over the next few years, there was a great opportunity to consider “a different way forward” to make use of the land.

Sanson, who chairs the Governance and Finance Committee and is a member of the Forestry Advisory Group, said over the past 15 years council’s forestry operation had averaged a net profit of $213,735 per year.

“The first thing for me is I’m not anti-forestry – I’m just struggling to see any benefit at all to ratepayers.

“Council does a fair job of managing its forestry, but there is no financial benefit to ratepayers, and there are significant costs ... from a financial perspective it just seems imprudent.”

Sanson said the profits from forestry did not also take into account the externalised costs caused by wilding pines, loss of recreational access, and the impact of sedimentation on Nelson’s waterways.

She said council had received about $3m worth of funding for current and future work to improve the health of Nelson’s waterways, and mitigate the effect of sedimentation.

“The council spends a lot of money simply trying to restore the health of the Maitai, which is also being impacted by sedimentation from council forestry.

“The costs to mitigate the environmental impacts, they are just not factored into the forestry accounts whatsoever.”

There were potentially greater impacts on people and businesses that relied on the forest for recreation when the council’s pine forests were shut down due to high fire risk, she said.

Sanson referenced a 2018 Nelson City Council report, which stated that mountain biking contributed about $8.5m per year to the Nelson economy, with multiplier effects of up to $15m per annum.

“By restricting recreational access to our land, due either to fire risk or harvesting, it’s actually having a big impact on the economic development of other activity that could be taking place on that land.”

In 2018 the council made the decision to retire 140ha of its forestry to be replanted as permanent forest. Also in July the Tasman District Council chose to retire 150ha of plantation forestry in the hills above Richmond, and convert it to permanent native trees and mixed exotic woodland for recreation.

As a commercial forest, Kingsland had generated only about $2 million in net harvesting income every 28 years, making it the poorest performing forest in the Tasman District Council portfolio.

Sanson said there was an opportunity to rethink the way the Nelson council managed its forestry operation, and transition towards selective logging of permanent canopy forests, or native forests for biodiversity, environmental, and recreational gain.

More >>

Source: Stuff

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Wilding pine control efforts ramp up

A nationwide plan to tackle more than 800,000 hectares of wilding pine infestations over the next year will generate up to 550 new jobs and help prevent future wild fires, say Biosecurity Minister Damien O’Connor and Civil Defence Minister Peeni Henare.

“We're ramping up our wilding control activity in areas where jobs are needed most,” Damien O’Connor said.

“Budget 2020 included $100 million for wilding pine control through the Jobs for Nature programme. Over $36 million of that funding will be spent in the next 12 months as part of our four-year programme. That extends our work from 19 to 58 sites across New Zealand."

Minister O’Connor says this includes a range of long-term projects led by regional councils, and smaller-scale community partnerships.

“We’ll see significant work throughout most of New Zealand – in Northland, across the Central North Island, in Marlborough, Nelson/Tasman, Queenstown, Otago and Southland.”

"More than $17 million of work is allocated over 400,000 hectares of wilding infestations in Canterbury alone, including extensive infestations in Craigieburn and the Mackenzie.”

Civil Defence Minister Peeni Henare was in the Mackenzie District last week to survey the fire damage near Lake Pukaki, the spread of which has in part been attributed to wilding pines.

“I saw the devastation first-hand, and heard concerns from locals that the wilding pines are a pest, and play a dangerous part in helping to spread fires.

“This Government investment will help prevent fires like this in years to come,” said Peeni Henare.

Minister O’Connor says wilding pine control is part of the Government’s commitment to provide economic support for people, with a significant environmental benefit.

“This is not necessarily about putting people into new careers. It is about finding work for people now, while their sectors recover from Covid-19.”

“Wilding control is largely seasonal work, with some year-round operations. This will allow companies to employ new people - and to keep on existing staff."

Minister O’Connor says New Zealanders can expect to see significant changes to the landscape as control activity increases.

“In many areas, like Queenstown and the Mackenzie basin, we’ll be removing longstanding infestations that have become a familiar part of the landscape. People are inclined to think any tree has some value. But the recent fires near Lake Pukaki, only a few years after the devastating fires in Flock Hill, have shown that wilding pines threaten the ecosystem, the economy – and the community.

More details on regional focus >>

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Port of Tauranga chief to retire

Port of Tauranga’s Chief Executive, Mark Cairns (pictured), has given notice that he will retire in June 2021 after more than 15 years at the helm of New Zealand’s largest and most efficient port. Mr Cairns says the time feels right to hand over to the next generation to continue Port of Tauranga’s success into the future.

“Port of Tauranga is in excellent shape. I’m incredibly proud of our people and the positive outcomes we have achieved for our customers and our community,” he says.

“I will certainly miss my colleagues but I am excited to see where the Company goes next, driven by the creative and innovative team we have built.”

Port of Tauranga Chair, David Pilkington, says Mr Cairns’ leadership has seen the Company grow from a regional bulk export port to New Zealand’s international cargo hub, as well as one of its most successful listed companies.

When Mr Cairns took over as Chief Executive in 2005, Port of Tauranga handled 12.6 million tonnes of cargo and 438,214 TEUs. In the year to June 2020, the Port handled 24.8 million tonnes of cargo and 1.25 million TEUs.

“Thanks to Mark, we have very strong relationships with our customers and suppliers, which helps us plan for the future with confidence,” says Mr Pilkington.

“Mark has kept the Company strongly focused on future opportunities, while maintaining an industry-leading safety record and the highest productivity rates in Australasia,” he says. He says the Company’s success has delivered wide-ranging benefits to the Bay of Plenty region. Local ratepayers own just over half of Port of Tauranga’s shares through Quayside Holdings.

“During Mark’s tenure, the average compounding Total Shareholder Return has been 19% per year, with market capitalisation increasing by $4.4 billion, from $665 million to $5.1 billion today,” says Mr Pilkington.

“Mark has built a very strong team, who will continue to take the company forward into the future.”

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AFPA welcomes VFPA

AFPA welcomes the Victorian Forest Products Association - The newly formed Victorian Forest Products Association (VFPA) has today announced 23 foundation members and elected its Interim Governing Council.

The new Association will span Victoria’s forest industry value chain including plantations, native forestry operators, sawmills and pulp and paper making.

The eight members of the Interim Governing Council are:
• Sarah Harvie, Opal Group
• Rob Hescock, Hancock Victorian Plantations
• Paul Heubner, Allied Natural Wood Exports
• Mike Lawson, SFM Environmental Solutions
• Phil Mason, New Forests
• Darren Sheldon, Australian Bluegum Plantations
• Tony Price, Midway Limited
• Owen Trumper, AKD Softwoods

The Chief Executive Officer of the Australian Forest Products Association Ross Hampton said, “Forest industries employ thousands of men and women in Victoria. At a time when so many jobs are being lost, our industries can play a big role in Victoria’s post – pandemic economic recovery if they are enabled to.”

“This new body will turbo-charge representation for all our industries and help make the case to policy makers that now more than ever our sustainable, renewable forest industries should be backed to deliver vital growth and prosperity.”

The Chair of the Victorian Association of Forest Industries inc (VAFI) Craig Dunn said, “We are entering a new era for the Victorian forest products industry.”

“VAFI has been the voice of the industry for many years. This new peak body is being formed on the strong foundation laid by VAFI through the perseverance of its members. The VFPA will bring a new approach and broader industry representation during these challenging times. VAFI will continue to operate in parallel until the VFPA is up and running to ensure a seamless transition,” Mr Dunn concluded.

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Buy and Sell

... and finally ... little Johnny is back - Ha ha

A teacher gave her class of 11 year olds an assignment: To get their parent to tell them a story with a moral at the end of it. The next day the kids came back and one by one began to tell their stories.

Ashley said, 'My father's a farmer and we have a lot of egg-laying hens. One time we were taking our eggs to market in a basket on the front seat of the car when we hit a big bump in the road and all the eggs got broken.'

'What's the morale of that story?' asked the teacher.

'Don't put all your eggs in one basket!'

'Very good,' said the teacher.

Next little Sarah raised her hand and said, 'Our family are farmers too. But we raise chickens for the meat market. One day we had a dozen eggs, but when they hatched we only got ten live chicks, and the moral to this story is, 'Don't count your chickens before they're hatched.'

'That was a fine story Sarah.'

’Little Johnny, do you have a story to share?'

'Yes. My daddy told me this story about my Aunty Barbara. Aunty Barbara was a flight engineer on a plane in the War and her plane got hit.

She had to bail out over enemy territory and all she had was a bottle of whisky, a machine gun and a machete. She drank the whiskey on the way down so it wouldn't break and then she landed right in the middle of 100 enemy troops.

She killed seventy of them with the machine gun until she ran out of bullets. Then she killed twenty more with the machete until the blade broke. And then she killed the last ten with her bare hands.'

'Good heavens,' said the horrified teacher, 'what kind of moral did your daddy tell you from that horrible story?'

'Stay away from Aunty Barbara when she's been drinking.'

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

John Stulen, Editor

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