WoodWeek – 24 March 2021

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This week it’s all about the ban, but we’re not talking about Australia now. It's the impending Russia log export ban expected to be confirmed later this year. We’ve got coverage from two consulting updates on these matters in today’s issue.

China will be most directly impacted by the ban, as it receives a large share of the logs that will be impacted by the ban of both softwood and hardwood sawlogs. In total, China imports about 8 million m3 of these logs, of which the larger share is softwood.

The importance of Russia for China’s softwood log supply has decreased since tariffs were first introduced in 2007. Since then, China shifted its import mix dramatically with New Zealand replacing Russia as the primary source, as well as significant imports from Australia, the US, and more recently, Germany. But still in 2020, more than 10% of China’s softwood log import was from Russia. If the ban is implemented, China will be forced to replace the remaining Russian imports with other sources. This will involve a higher average cost for sawlog sourcing and be particularly challenging for landlocked Chinese sawmills without good access to ports or railways.

Meanwhile in the forest, equipment suppliers are ramping up technology for harvesting. John Deere tech expert Matt Flood will be presenting to local harvesting contractors on some of these new smart technologies as part of the upcoming HarvestTECH 2021 event running in Rotorua, New Zealand on 13- 14 April.

Flood says technology is a game changer for the forestry industry. While forestry machines have become more powerful, there remains a 40 per cent variation in productivity on Deere’s machines.

“That variation comes specifically from the operator sitting in the seat. It comes from their experience level and the efficiency they have to offer on that machine,” Flood said. “We need to start to focus on having our machines easier to operate, and really allow an inexperienced operator to get the same productivity out of that machine as an expert operator.”

Moving to carbon markets, prices are hot and getting hotter. So is interest in our Carbon Forestry Conference coming in June. Given the current debate, 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. 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. Click here to register nowdon't miss out, interest is running high already.

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Russia export ban: Dual impact

Russia’s proposed log export ban in 2022 will have a far-reaching impact on global forest product markets - Russia exported 15 million m3 of logs in 2020, accounting for almost 12% of globally traded roundwood. Much of this trade may come to a halt in 2022 when a new law proposed by Russia’s president will ban the export of softwood logs and high-value hardwood logs in January 2022. The Russian government is also considering measures to reduce illegal logging and restrict the export of green lumber.

While the proposed ban is not yet law, it is widely expected to be implemented and passed into law in the second quarter of this year. If enacted, the law will have a direct impact the Chinese lumber industry because it imports large volumes of sawlogs, mainly from Russia Far East. According to a recent study from Wood Resources International and O’Kelly Acumen, China will probably look to source more sawlogs from other regions of the world, such as Oceania, Europe, and the US. The increased competition for logs in those markets will put upward pressure on sawlog prices. Mid-term, the authors expects that China will evolve from import of roundwood to import of lumber. This shift will allow lumber manufacturers in Europe and Russia to increase shipments to China.

The export ban is expected to drive Russian investment in new lumber capacity, and it might also impact other forest industry sectors, for example those planning to co-locate pellet plants with sawmills. In addition, the possibility of restrictions in the export of green lumber will encourage investment in kiln drying capacity, thus improving access to markets in Europe and the US.

Importance of Russian exports - Russia is home to 15% of global wood resources (growing stock) covering 815 million hectares of forest land. While growth rates are relatively low in Russia’s northern latitudes, the country has an annual harvest of more than 200 million m3, 10% of the global total. And a large share of the harvest is exported in unprocessed log form – while log exports have fallen since their peak in the mid-2000s, Russia is still a major exporter of both softwood and hardwood logs, as well as softwood lumber.

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Source: Margules Groome

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John Deere: Game changing technology

The advancement of forestry equipment has typically focused on generating more powerful machines. Now, John Deere has launched a new tech-driven initiative that will marry strength with intelligence. - Through the Precision Forestry initiative, Deere will re-organise its technology portfolio and increase its efforts in delivering solutions designed to increase efficiency and productivity in the woods.

“It’s not about getting bigger and stronger in the woods all the time,” said Graham Hinch, Deere’s sales and marketing director for the western hemisphere. “It’s about delivering more intelligent, connected machines that address our customers’ needs.”

Smart Industrial - The forestry tech initiative aligns with Deere’s overarching Smart Industrial operating model. The operating model, announced last summer, aims to accelerate its success via the integration of smart technology innovation with its legacy of manufacturing.

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.

“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,” said Matthew Flood, product marketing manager for skidders and the Precision Forestry initiative at John Deere.

“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.”

Note: Matt Flood will be presenting to local harvesting contractors on some of these new JD Smart Technologies as part of the upcoming HarvestTECH 2021 event running in Rotorua, New Zealand on 13-14 April.

Game Changer - Flood explained technology is a game changer for the forestry industry. While forestry machines have become more powerful, there remains a 40 per cent variation in productivity on Deere’s machines.

“That variation comes specifically from the operator sitting in the seat. It comes from their experience level and the efficiency they have to offer on that machine,” Flood said. “We need to start to focus on having our machines easier to operate, and really allow an inexperienced operator to get the same productivity out of that machine as an expert operator.”

Machines will evolve to become smarter, and capable of adapting to various situations, regardless of who is seated in the cab. “We look to have machines that provide feedback and guide operators. Potentially, someday, they can prevent operators from making a poor decision,” Flood said.

As well, Precision Forestry will see an era where more accurate data can be harvested from machines. “As we have this accurate information and data, we can look at our machines as a system, rather than just individual machines and individual machine efficiencies,” Flood said.

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Photo: Tracked Harvester 959MH Harvesting Heads FL100

Source: equipmentjournal

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China and Russia seek other log sources

China and Finland to Find Alternative Sources for Russia’s Wood Raw Material - Russia has been one of the largest roundwood traders globally for many years by exporting roughly 15-20 million m3 per year between 2010-2020. The main importers of the Russian roundwood are traditionally China and Finland, importing around 90% of the total Russian export volumes.

Based on the announcement of President Vladimir Putin last year, instructing the country’s government to ban the export of untreated or roughly processed wood, the roundwood exports might be heavily limited from next year on, should the legislation take force as proposed. According to the plans, the ban will apply to softwood logs and pulpwood, as well as possibly birch veneer logs. The final decision on assortments and species will be done later. Green sawnwood can also be part of the ban. Besides, the Government considers imposing limitations on the export of wood chips and some of the wood-based panels, such as OSB and particleboard.

These limitations might be in force already during this year. The consequences of the export limitations would impact the interests of trading partners and force them to find either alternative sources for the commodities or to buy more value-added products from Russia.

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Tigercat goes big with new 875E logger

The no-compromise 875E logger introduces several new features, including an updated operator station, two undercarriage options, and various grapple configurations to tailor the machine to your specific needs. The 875E logger is a multi-purpose carrier with two boom options for loading or processing applications. The machine can be equipped with the Tigercat FPT N67 Non-certified, Tier 4f or Stage V engine, producing 210 kW.

The undercarriage is designed and built to withstand rigorous, full-time forest duty applications. Two options are available. The F7-150 undercarriage is standard. The larger footprint F7-162 undercarriage provides additional stability for heavy timber applications.

The 875E can be configured as a loader equipped with various power clam, butt-n-top, live heel, pulpwood and log grapple options. The carrier can also be configured as a high-capacity processor capable of running large harvesting heads in demanding duty cycles.

The spacious cabin has a new operator’s seat with built-in heating. Controls are now integrated into both sides of the joystick pods, eliminating the need for any bolt-on control pods. The optimally positioned controls and a large touchscreen display improve ergonomics and machine monitoring. Reduced in-cab noise levels help the operator enjoy the auxiliary audio input port, Bluetooth® audio and hands-free calling. Additional new features include a standard equipped rearVIEW camera system, emergency stop button, and a key FOB to turn on exterior lights remotely when entering the cab in the dark.

Some of the many advantages of the 875E over excavator conversions include better service access, higher cooling capacity, a better operating environment, more robust undercarriage components and extremely efficient hydraulic circuits. The result is higher production, uptime and fuel efficiency.

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Retrospective: NZ Forest Products

A look back at the once-proud NZ Forest Products - As a new generation of land is converted from farming to carbon-farm tree plantations, former NZ Forest Products Kinleith mill manager Ashley Wilson looks at what and who brought down the once-mighty business.

The 1980s were incredible for New Zealand, politically and economically. At the start of the decade, I was working for the largest company in the country, NZ Forest Products, as its man in Wellington, keeping finance companies, investment analysts, the Government and the Opposition informed of its activities and plans.

By the end of the decade, Forest Products no longer existed. To understand what went wrong, it pays first to know something of the company’s history.

NZ Forest Products was established in 1936 to exploit the huge forests of pinus radiata sown on the Central Plateau of the North Island up to and during the Great Depression. Under entrepreneur David Henry, sawmills and the wallboard mill in Penrose, Auckland, were established, followed in 1953 by the start of pulp- and paper-making operations at Kinleith in the South Waikato.

Forest Products lost its status as New Zealand’s largest company by market capitalisation in 1981, when Fletcher Holdings and Challenge Corporation merged to form Fletcher Challenge.

That decade was characterised by a number of company bites of other enterprises, and takeover offers. Some examples:
- Fletcher made a grab for Carter Holt
- Caxton tried to buy UEB
- Goodman Fielder bid for Wattie’s
- Wattie’s countered with a bid for Goodman Fielder
- Forest Products formed strong links with Australian paper company APM, now AMCOR.
- Forest Products took 40 percent of UEB
- Alex Harvey Industries bought into Carter Holt to form Carter Holt Harvey.
- Fletcher Challenge was prepared to spend $1.5 billion to take over Forest Products.

There was a good reason for companies to take aim at Forest Products. At that time, we had more than 150,000 hectares of planted forests. In our balance sheet, these were valued at cost. Our accountants argued that since a forest could be destroyed by disease or fire, this was a conservative position to take. However, there had never been a serious fire or threat of disease, and one analyst suggested the then share value of $4.42 could really be as high as $8.

Forest Products was doing well. We were a major producer for the local market as well as being an exporter, so we were getting export incentives. We made 250 grades of paper because we were protected by import licensing. Customers in New Zealand had to use our products; once a year, we told them the new price they would have to pay!

But farmers were complaining to the government that industry was getting a financial advantage over them and feared good pastoral land could be lost to forestry. As well, New Zealand’s export incentive scheme was under fire from GATT, the Geneva-based multilateral General Agreement on Tariffs and Trade.

Everything changed in 1984. At that time, I was manager of the Kinleith mill, which employed more than 3300 people. It was election year, and in keeping with our tradition, we invited both the Prime Minister, Rob Muldoon, and the Leader of the Opposition, David Lange, to speak at lunchtime meetings. Muldoon was the first to visit. He gave an outstanding address, and despite the workers being mainly Labour supporters, there was no booing.

Lange, when he visited, received an enthusiastic reception, and went on to score an emphatic victory at the polls. But his new government was immediately faced with a currency crisis, and the incoming Minister of Finance, Roger Douglas, floated the dollar, phased out export incentives and moved to sell state-owned enterprises.

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Source: BusinessDesk

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MPI: Updated Forest Products Export Standards

MPI: Forest Products Export Standards - Phytosanitary Requirements of China - The Forestry ICPR for China has been updated with the following changes:

> Updated the in-hold Phosphine fumigation rate under Fumigation section for Logs

If you need any further clarification please contact your Independent Verification Agency in the first instance.

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The Forestry ICPR for Great Britain has been updated with the following changes:
> Note added under the Additional declaration sections of the Logs and Sawn wood/timber commodities regarding Pinus spp. and Pseudotsuga menziesii.
> Updated Phytosanitary Certification sections to include 14-day requirements for inspection date and certificate issuance for the following commodities Logs, Sawn wood/ Timber and Wood chips, particles, sawdust, wood shavings of conifers.
> Added clarification to Phytosanitary Certification sections regarding phytosanitary certificate requests in ePhyto.

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South Westland focus: Jobs for Nature

(Minister of Conservation / Minita mō Te Papa Atawhai) Jobs For Nature To Support Predator Free South Westland - An ambitious project to restore nature and sustain jobs in COVID-hit South Westland represents the biggest step yet on mainland Aotearoa towards the Predator Free 2050 goal, Conservation Minister Kiri Allan says.

“Predator Free South Westland will be an exemplar for how to achieve predator-free status more widely across the country. The project’s goal is to remove possums, rats and stoats from a 100,000 hectare area of public and private land from the mountains to the sea, a massive leap from the original 12,000 hectare site behind Whataroa.”

“The five-year $45 million project is being supported by $24 million from DOC.

“We know this region has been particularly hard hit by the economic consequences of Covid-19 and that the community is hurting. Jobs for Nature support will allow locals affected by the pandemic remain in South Westland while helping to carry out a ground- breaking project which will both protect and restore the area’s natural heritage, reinforcing its status as part of Te Wāhipounamu – South Westland World Heritage area.”

Eliminating predators from these diverse landscapes will require a range of approaches – from ‘boots on the ground’ labour to innovative trapping, baiting and detection techniques.

Up to 50 jobs are expected to be created over the project’s five years.Ultimately it is hoped the project will bring about an end to the ongoing widespread use of aerial 1080 to control predators within the region.

“Doing this work at a large scale is an opportunity to reposition this unique place in a post-Covid world, while at the same time delivering some very really social and economic benefits and creating a significant biodiversity legacy for this area.” Kiri Allan said.

Predator Free South Westland is being run by Zero Invasive Predators (ZIP).The project will encompass the Whataroa, Okāritō and Franz Josef townships, and is chaired by former Federated Farmers president Katie Milne.

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Buy and Sell

... and finally ... time for some classroom humour

… and finally … fun times in the classroom

Schools, pupils and parents have had rough time through 2020, but this school answerphone we heard about recently shows how bad it’s got.

"Hello! You have reached the automated answering service of your school. In order to assist you in connecting the right staff member, please listen to all your options before making a selection:

  • To lie about why your child is absent - Press 1
  • To make excuses for why your child did not do his work - Press 2
  • To complain about what we do - Press 3
  • To swear at staff members - Press 4
  • To ask why you didn't get information that was already enclosed in your newsletter and several flyers mailed to you - Press 5
  • If you want us to raise your child - Press 6
  • To request another teacher for the third time this year - Press 7
  • To complain about bus transportation - Press 8
  • To complain about school lunches - Press 9
  • If you realise this is the real world and your child must be accountable and responsible for his/her own behaviour, class work, homework, and that it's not the teachers' fault for your children's lack of effort ... hang up and have a nice day!"

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

John Stulen, Editor

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