WoodWeek – 17 March 2021

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Greetings from Rotorua this St Patricks Day – There is no sugarcoating the problems on the horizon as today marks the unfortunate confirmation the Whakatane Board Mills closure will go ahead. The mill closure puts our ailing wood processing industry back in the headlines, with calls for urgent steps to avoid more closures.

"This is a violation of our responsibility to future generations," says David Turner, the executive director of Sequal, a wood processing factory in Kawerau that employs 80 people. He predicts more mills with specific business and product issues will close, "but the real issues are going to start to emerge in another five years or so".

Moving now to something positive: a big shout out to Shannon Te Huia, Hoana Rewi, Phil Taylor and Anna Pule, whose companies are all finalists in the second MPI Primary Industries Good Employer Awards. A nod to another group going out of their way to advocate in the community for our forest industry: James Drummond, Russell Schaare and Eddy Eddington from Pan Pac's Forests team and Cat Wilson from Wilson Log Cartage who visited Pukehamoamoa School as part of the Wood is Good program last week.

At 9am this morning, Climate Minister James Shaw rang the NZX bell to open the first auction of allowances under the Emissions Trading Scheme. This planned change ushers in a new era for carbon trading and forestry investment potential. Given the current changes, bolstered by proposals to Government in the Climate Change Commission’s draft report, we expect a large local and international audience in June in Rotorua for our Carbon Forestry Conference. Click here to register nowdon't miss out, interest is running high already. We are working closely with all of the key agencies and industry professionals to bring you a world class conference. Both MPI and the Climate Change Commission are excellent partners and of course we have Dr Rod Carr as our keynote speaker.

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Log Export Market Update

Log exports to China have come back in the last month, but other markets haven't ... - This week we've got our monthly update from the good folks at Champion Freight. The chart shows total log export values to China to the end of January are down 9 percent year-on-year contributing to overall log exports reducing by 9 percent across all export markets. Log exports to South Korea, Japan and India were down 5%, 17% and 61% respectively.

For the month ended in January, China shipments are up 15 percent, compared to January 2020, taking overall log exports up 13 percent.





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Closure confirmed for Whakatane mill

The closure of Whakatane Mill has been confirmed, with over 150 skilled operational workers being made redundant after 85 years of operations.

FIRST Union and E tū say that while vital the impact on the local community will be significant, there is still a chance for a new buyer to repurpose the existing plant and secure crucial infrastructure in New Zealand’s forestry supply chain.

"There are many options for refitting the existing assets to continue manufacturing pulp and paper products," said Jared Abbott, FIRST Union Secretary for Transport, Logistics and Finance.

"We are inviting potential buyers to ask for our assistance to get the support needed to make the most of the existing skills and infrastructure available. There are opportunities in the industry and there is an important role for Government to play in securing the wood supply chain and increasing our manufacturing capacity."

E tū spokesperson Raymond Wheeler says the announcement of the closure is "devastating" for local industry, including businesses such as scaffolding and engineering.

"We’ve just had the economic impact of the Whakaari (White Island) eruption and COVID-19 on Whakatāne’s tourism industry to contend with, and now the region has been dealt this blow. It’s an enormous hit to the regions and to the eastern Bay of Plenty."

Raymond says job opportunities in the area are limited, and emphasises the urgency around the Government’s work on an Industry Transformation Plan (ITP) for the forestry and wood processing sector, if local manufacturing is to survive.

Source: Scoop news


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Mill closure violates future obligations says CEO

The threatened, and now confirmed closure of Whakatane Mill has put the ailing wood processing industry back in the headlines, with calls for urgent steps to avoid more closures.

"This is a violation of our responsibility to future generations," says David Turner, the executive director of Sequal, a wood processing factory in Kawerau that employs 80 people. He predicts more mills with specific business and product issues will close, "but the real issues are going to start to emerge in another five years or so".

Today Turner explains to The Detail why the wood processing industry is under stress and why New Zealand continues to send so many raw logs to China without turning them into something more valuable. Forestry is our third biggest export, according to MPI, earning more than $6.7 billion a year. Most of those exports are logs and between 70-80 percent of them go to China. Since 2008 log shipments to China have surged from one million tonnes a year to around 20 million this year. But at the same time our value-add wood exports have stagnated.

Turner says the government has a "delusional idea that we'll be able to attract foreign capital because the fundamental issue is lack of capital. There's no lack of capital, there's a lack of environment to make that capital efficient and successful".

Unlike the Whakatāne Mill, Turner's Sequal plant just 33 kilometres away is "definitely not in distress".

"What I'd say is that there should be 10 businesses like Sequal in New Zealand, not just one."

Sequal, which employs 80 people, is owned by four Bay of Plenty families. It is the only sawmill in New Zealand that focuses on processing utility grade logs, competing specifically with the same logs sent to China. As a primary producer it processes the timber in bulk for customers in 20 countries, which then turn it into the finished product such as furniture.

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Source: RNZ The Detail



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Forestry employers strong showing in MPI Awards

The food and fibres sector is a great place to work, Ministry for Primary Industries (MPI) deputy director-general Karen Adair said as she announced the finalists in the second primary industries Good Employer Awards.

She acknowledged the past 12 months had been tough on employers but said the finalists had shown passion, innovation and commitment to the food and fibres sector that deserved to be acknowledged.

"Our food and fibres sector plays a vital role in the recovery of our economy. Our people are our most important resource, and the finalists have all demonstrated that they're putting their people first."

"This is the second time we've run these awards, and I continue to be impressed at the calibre of the applicants."

She said about 350,000 people were employed in the food and fibres sector, representing at least one in 7 working New Zealanders, and as many as one in 3 in some regions.

"Everyone who entered the Good Employer Awards have shown their commitment towards showing that the food and fibres sector is a great place to work. Having the right environment to nurture and develop workers is critical to the future of our food and fibres sector."

The winners will be announced at Parliament in Wellington on 12 April, 2021.

The finalists include:

Māori Agribusiness
  • Shannon Te Huia – Puniu River Care, Te Awamutu (Forestry)

  • Hoana Rewi – Rewi Haulage Limited, East Coast Log Haulage (Forestry)

Safe & Healthy Work Environment
  • Phil Taylor – Port Blakely, Christchurch (Forestry, pictured)

  • Liam O'Sullivan – Landcos Ventures (Dairy)

  • Tess Keenan – Constellation Brands (Wine)

Supreme
  • Anna Pule – Rayonier Matariki Forests (Forestry)

  • Rhys and Kiri Roberts – Align Clareview (Dairy)

  • Sarah Lei – Trevelyans (Horticulture)

  • Jenny Buckley and Dave van den Beuken (Dairy)

  • Heather Kean – T&G Global – Auckland (Horticulture)



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John Deere unveils new technology initiative

In response to customer needs, John Deere announces its Precision Forestry initiative, a focused approach to its job site technology solutions. Through Precision Forestry, John Deere is reorganizing its technology portfolio and doubling down on its efforts in delivering solutions designed to increase efficiency and productivity in the woods. The shift to Precision Forestry aligns with the brand's overarching strategic direction to provide intelligent, connected machines and applications to help unlock more value for customers.

"Previously, the industry has focused on developing bigger, faster, more powerful machines to boost performance, but larger machines sometimes present more challenges, especially on job sites with limitations," said Matthew Flood, product marketing manager, John Deere. "Technology has been a gamechanger for the forestry industry, enabling us to improve operator efficiency and performance without altering machine size. With the Precision Forestry initiative, we're organizing our portfolio to create a foundation for the future of forestry machines and job site technology."

Precision Forestry is a more descriptive term for what customers can expect from the John Deere technology suite, including real–time, map–based production planning and tracking capabilities along with new and evolving operator assistance capabilities. This new alignment lays the groundwork for the future of technology solutions, as John Deere builds in these core areas to help customers work faster and smarter on the job site. For customers, the new Precision Forestry direction will simplify the John Deere technology portfolio, making it easier to select and adopt customized solutions based on their unique job site needs.

"With technology, we believe that loggers need to embrace working smarter, not harder. The logging industry is built on hard work – it's part of the industry's DNA. We want to complement that work ethic with machine intelligence and system–level integration, delivering the tools loggers need to increase efficiency and performance in the woods," said Flood.

To learn more about the Precision Forestry technology offerings, as well as the full line of John Deere Forestry equipment, visit http://www.johndeere.com/forestry or a local John Deere dealer.


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Pan Pac and Wilson Log Cartage invest in goodwill

Last week it was back to school for a log transport team from Pan Pac Forests and Wilson Log Cartage - The combined team included James Drummond, Russell Schaare and Eddy Eddington from Pan Pac Forests and Cat Wilson from Wilson Log Cartage visited Pukehamoamoa School as part of the Wood is Good programme.

The children learned about forestry, climate change, wood products and road safety - getting to sit inside a log truck, use the RT and sound the air horn! We also donated some sports equipment to the school. Thanks for having us!


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Rising investment interest in forestry

CEO David Brand (pictured) announced New Forests was included in the Impact Assets 50, an annual list of the world’s leading impact investment managers. They also recently gathered in a virtual convening with some of the world’s foremost institutional investors to discuss accelerating investment in Natural Climate Solutions as part of the transition to a net zero emissions economy.

With this rising interest in forests, he reflects on investment in forestry as an asset class and its role in a sustainable future. The design of portfolios that support action on climate change and the conservation of nature will lead to an evolution and expansion of the role of forestry in society. New Forests has tried to align its investment strategies with these imperatives and opportunities while continuing to focus on returns and risk management.

Investment in Natural Climate Solutions, the transition to a circular bio-economy, and the increasing recognition that expanding forestry must be done in partnership with communities—these are the keys to future investment opportunities in forestry. He said that he believed institutional investors are increasingly taking note of the potential expansion of the forestry asset class.

Recently New Forests, working with Generation Investment Management, Ceres, Conservation International, Forest Trends, Systemiq, The Nature Conservancy, and the World Resources Institute developed A 2030 Investment Vision for Natural Climate Solutions.

David shared his presentation from the virtual convening regarding Investment Transformations in the Forestry Asset Class—in which he discusses the potential opportunity as climate finance increasingly becomes central to forestry investment.

View the presentation here

Source: David Brand, CEO, New Forests



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City Forests delivers top half-year result

City Forests, the Dunedin City Council’s forestry company delivered excellent half-year results providing a highlight in a balance sheet that appears to be holding up relatively well despite Covid-19 challenges.

The council’s finance committee received half-yearly reports on Dunedin City Holdings Ltd (DCHL) and its range of council-controlled organisations last week. The council heard that, despite ongoing issues caused by Covid-19, particularly for Dunedin Airport and Dunedin Venues Management Ltd (DVML), total group revenue was in line with budget.

Revenue was lower than the previous year, but it was not causing ‘‘any great concern’’, DCHL chairman Keith Cooper said. He said low interest rates continued to have a favourable impact.

The star performer was City Forests, which delivered a profit of $4.94million after tax for the six months ending December 2020. That was up on the previous year’s profit of $3.976million. Some other companies were significantly affected by Covid-19.

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Finns find wood-based foam solution

A 'Smart Foams' research project at Finnish university uses artificial intelligence to develop wood-based foams - Wood-based foam materials can replace Styrofoam and bubble wrap in packaging and other applications.

"Our project is based on biomimetics – a field which emulates natural phenomena. We use AI to develop a foam with properties similar to wood, such as strength, flexibility and resistance to heat,"says Professor Mikko Alava from Aalto University.

The researchers strive to optimize the properties of the foam. A mixture of lignin, wood fibre and laponite (nanoclay), for example, can be processed into shock and heat resistant foam and used instead of plastic.

Lignin is the compound that binds wood fibres together. As a dried foam it is hard and water resistant and even conducts electricity. The project makes use of machine learning to exclude superfluous materials and processes, thanks to which the development work is considerably accelerated, says postdoctoral researcher Juha Koivisto.

The project has received funding from Business Finland to look for commercial applications and markets for the new material. Commercial production and use as packaging, for example, requires that the foam is truly biodegradable and cheap and that it can be produced in considerable quantities.

The foam can also be used as insulation material in construction, being light in weight, heat-insulating and strong. It is water-resistant and therefore fire-safe. The foam is very similar to cork, but is tens of times lighter.

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SnapSTAT - Sponsored by COP





Source: Industry Edge




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Government changes carbon auction law

(BusinessDesk) New rules quash carbon auction collusion - A law intended to prevent collusion in the government's first carbon auction was passed by Parliament last week. The Climate Change Response (Auction Price) Amendment Bill sets up a confidential reserve price for the upcoming NZ Units auction due to concerns it could be dominated by lowball bids.

The fear is some buyers could make windfall gains buying up NZUs at well below secondary market prices. This would drive down carbon prices, disrupt markets and have some parties profiteering at the expense of Crown income.

The bill passed through all remaining stages last night under urgency after a brief consideration by a select committee report following its introduction in February.

The first auction of 4.75 million NZUs is set for March 17. The NZUs will have a floor price of $20 and a ceiling of $50. There are plans for four auctions a year. Another 7 million NZUs will be offered if the cost containment reserve is triggered by bid prices clearing at $50. This is unlikely.

Currently, the secondary market for NZUs is around $39.

Last night’s law change will allow a secret reserve price to be set above the statutory floor and below the cap. The government has indicated the reserve price will be set where the secondary market in NZUs is trading.

More >>

Source: BusinessDesk


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Jobs



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... and finally ... something to laugh about

Some people just can't pull off cliches without stuffing them up:

"He swept the rug under the carpet."

"She's burning the midnight oil at both ends."

"It was so cold last night I had to throw another blanket on the fire."

"It's time to step up to the plate and cut the mustard."

"She's robbing Peter to pay the piper."

"He's up a tree without a paddle."

"Beware my friend...you are skating on hot water."

"Keep your ear to the grindstone."

"Sometimes you've gotta stick your neck out on a limb."

"Some people sail through life on a bed of roses like a knife slicing through butter."

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In completely unrelated news: A rose by any other name… Elon Musk has crowned himself 'TechnoKing' of Tesla, rather than the more prosaic chief executive officer. His chief operating officer is also now 'master of coin'.

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Not enough to get you laughing … try these:

> Our mountains aren’t just funny – they’re hill areas.

> Wishing you a happy whatever doesn’t offend you.

> Double negatives are a no-no in English.

> Irony – the opposite of wrinkly.

> The problem with political jokes is that they sometimes get elected.

> I’m pining for a good tree pun – I wish they were more poplar.

> Afraid of Santa? You might be Claustrophobic.

> Just because you are offended – doesn’t mean you are right.

> Sweet dreams are made of cheese – who am I to dis a brie?

> Well, to be frank – I’d have to change my name.

> Dogs can’t operate MRI scanners – but catscan.

That’s all for this Wednesday, and our advice to you is; just because you laughed at some of these one-liners, maybe just keep them to yourself – unless you’re a DAD of course – then just GO FOR IT!



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

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

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