Friday Offcuts 26 January 2018
Con Williams, Rural Economist NZ with the ANZ in a recent article looks at the level of foreign direct investment in the country. It’s interesting to see that with the level of recent rhetoric from the politicians (with agricultural land or forestry so often in the firing line), the amount of foreign investment in New Zealand’s agricultural sector is actually relatively small, at $NZ7.6 billion or around 2 per cent of total foreign investment. As the politicians deliberate, we think you’ll find the analysis both timely and balanced.
On a more sombre note, this week came the unwelcome news that Juken Nissho is planning to mothball some of its production from its Gisborne wood processing operation. It’s a consequence the company says of declining demand in Japan for its plywood and structural LVL building products. Potentially, up to 100 jobs could be lost from the Gisborne mill. The better news is that the Wairarapa mill and the downsized Gisborne mill are expected to remain open with both refocussing their cut on value-added wood products including sawn clear-wood. The region’s Economic Development Agency, Activate Tairawhiti also indicated mid-week that the Prime sawmill is expected to be recommissioned in the near future and WET Gisborne Limited is currently commissioning a new plant at the moment to produce high value structural lumber. Both are located in Gisborne.
Other breaking news this week includes; slamming the brakes on changing the rules around NZ’s ETS (so much for encouraging afforestation as part of the incoming Government’s plan for a billion trees in the ground over the next decade), public recognition that actually a shortage of available land for planting and tree stock shortages in NZ means that this year we’re going to fall well short of the target of 100 million trees in the ground (they're now projecting an increase from last year’s planting of 10 rather than the 100 percent originally bandied around) and from Australia, results from a just completed study point to further opportunities to improve the health and productive capacity forests owned by some 18,000 North Coast private native forest landholders.
For those taking a well-earned break in Australia (always good to have a breather after a couple of weeks back from holiday), we hope the long weekend has been a good one. Enjoy this week’s read.
This week we have for you:
Juken NZ to refocuss its products and markets
The Juken mill at Matawhero opened in 1994 and employs around 200 full time employees. The mill processes Radiata Pine from the company’s East Coast forests to produce a range of solid wood and engineered wood products like Plywood, LVL and SLVL (veneer), mainly for the Japanese housing market.
At the same time, the company is also making changes to what it makes at its Wairarapa mill, increasing production of its ‘J-frame’ framing for the New Zealand housing and construction market and decreasing the specialist products made for the Japanese building market. These changes won’t result in job losses for any of Juken’s 222 permanent staff in Wairarapa.
General Manager of Juken, Dave Hilliard and other senior staff have been meeting local workers on Tuesday afternoon to discuss the proposed changes and the reasons for them. He says there’s been a significant drop in demand from Juken’s main export market in Japan for Plywood and structural LVL building products in the past few years, which has seen these parts of Juken’s New Zealand processing business operating at a loss.
“The Japanese housing market has been in decline and future demand for these products is not expected to improve because of the ageing population in Japan.” Hilliard says the company’s Plywood is also increasingly unable to compete in the domestic and international markets against product out of large-scale wood processing plants from the likes of China and South America.
“All of our people have worked hard over the last five years to stay competitive, including increasing our New Zealand and Australian sales to reduce our reliance on the Japanese market, invested in a form-ply plant, reduced costs and hours of operation.”
Hilliard said despite these efforts, the mills current Plywood and LVL production capability and product mix doesn’t match the volume and price required by customers – which has led to increasing losses from Ply and LVL production.
“Significant investment would be required to increase to a scale to compete internationally. At this time, there’s just not the log or manufacturing volume of appropriate quality and price to justify that investment.”
The proposals presented to staff on Tuesday would see the mills return to profitability to keep high-value wood processing jobs and investment in Gisborne and Wairarapa by refocusing on value-add products where there’s strong customer demand and Juken has a competitive advantage, including its premium sawn clearwood products.
“One of Juken’s advantages is that we process timber from our own forests on the East Coast and the Wairarapa. We’re one of the few forestry companies in New Zealand who grow and process our own timber”. In Gisborne, we’ve invested to move from unpruned logs suited to Plywood and SLVL (veneer) products to a greater proportion of pruned logs suited to higher value clearwood products used for high-end residential and commercial interior cabinetry, furniture, solid doors and feature walls.”
“We’ve also increased our investment in kilns for the Gisborne and Wairarapa mills so we can increase production from the sawline producing these clearwood products. We’re refocusing on producing high-quality solid wood products from both mills.”
“The solid wood saw milling and finishing lines in Gisborne would remain with increased investment over time to allow the mill to process all of Juken’s unique pruned logs from its forests. This investment will likely initially be in log handling and sawmilling, but could expand to include production processes that use the sawmilled lumber products.”
He said if the decision is made to go ahead with the changes in Gisborne the mill would stop producing Plywood and LVL products and reduce the manufacture of SLVL (veneer). Around 100 full time positions would remain at the Mill.
“We are consulting with staff and will be working closely with them as we work through this proposal. The proposed changes in Gisborne, if implemented, will be difficult for our people, particularly as they come in the New Year. We’ll be working with Government agencies and Gisborne iwi, civic, community and business leaders, over alternative employment opportunities for our people should the changes go ahead,” said Dave Hilliard.
Hilliard said the proposed changes would have no impact on Juken’s forestry operations. The company advised staff that the consultation period in Gisborne would run for two weeks. After that it would consider feedback on the proposed changes before making any final decisions on the future structure and output of that mill.
Further coverage and comment on the potential for job losses at the company's Gisborne operation is covered here and reaction to the real issue of local wood processors being squeezed, click here.
Other wood processors expected in GisborneActivate Tairawhiti in a media release on Wednesday said that they empathised with those affected by yesterday’s announcement. Juken has been a long-standing employer at Matawhero for well over 20 years. It is a shame that low demand in Japan has forced Juken to scale back its Gisborne plant.
Activate Tairawhiti recognises the importance of wood processing to the region and very much wants to assist Juken with their process by supporting engagement with other industry operators and third-party stakeholders to avoid or minimise the impacts of possible job losses on the region. But these potential losses should not deter the Eastland Community Trust from its strategy of pursuing a wood cluster or NZ Centre of Excellence for wood processing for Gisborne.
Juken’s issues in the Japanese market are in stark contrast to very strong demand for NZ wood products from other Asian markets and from around the globe. That demand bodes well for the wider industry prospects and with the development of the Prime site in particular.
We are in the final stages of due diligence with a New Zealand-based sawmill operator, which is likely to purchase and recommission the Prime sawmill in the very near future. As part of this process, we completed a full run-up of the sawmill in November with 30 tonnes of logs processed through the green mill. The trial went successfully.
We anticipate being able to release further details over the coming fortnight and expect the operator will create a significant number of jobs on site by the end of this quarter. This is also a critical building block in unlocking future cluster parties and creating further employment on site.
Meanwhile, WET Gisborne Limited (WGL) is within the commissioning phase of its operation, with a long-term view of meeting the domestic market for high value structural lumber. WGL currently employs around 15 staff and, once operational, we expect this to increase to close to 25 with opportunities for further expansion.
We will release the details of our progress at Prime as soon as is contractually possible.
Source: Activate Tairawhiti
New Zealand’s ETS now put on holdAny further changes to the Emissions Trading Scheme (ETS) – including getting rid of free credits to heavy emitters and changing forestry rules – will not be made until the end of next year, the NZ Government says.
Climate minister James Shaw has told his Cabinet colleagues that changes are required, but first he wants to get the big picture in place, including passing the Zero Carbon Act and appointing a climate commission. Shaw has already doubled New Zealand’s long-term emissions reduction target by promising the country will be carbon-neutral by 2050.
In a Cabinet briefing paper, he says that means changes to the nine-year-old scheme, but not yet. “The Climate Change Response Act 2002 establishes the NZ ETS,” he said. “I intend that any amendments be made through a Climate Change Response Amendment Bill by the end of 2019.
“Ideally, these changes would follow the commencement of the Zero Carbon Act and the commission’s consideration of the role of agriculture in climate change policy.” Shaw says he’s got officials at the Ministry for the Environment working on the forestry issue.
They are also looking at possible changes to forestry rules, and Shaw says these are unlikely to go through until the end of next year. That’s likely to upset forest owners, who say that changes are needed to encourage the level of planting needed for New Zealand to meet its international emissions reduction commitments.
Planting rates have fallen off so much in recent years that officials say that by 2030, the country will be able to count on storing just four million tonnes of carbon in trees, down from 30 million tonnes in 1990.
Source: Carbon News 2018
Nominations now open for SWC forestry awards
For the forestry industry in Otago and Southland, the Awards Programme provides a unique opportunity for those involved in training, in growing, processing and transporting wood and for those who support the industry through the provision of products and services.
It’s a once in a year opportunity to come together to celebrate success. It’s the industry’s chance to recognise those who had achieved formal training qualifications over the year, to celebrate through a series of nine major industry awards, the top performers from across the lower South Island and to profile the real contribution that forestry and those working within the industry are making to the economic and social well-being of this region.
The 2018 SWC Forestry Awards Programme run in conjunction with Competenz will run this year at the Forsyth Barr Stadium, Dunedin on the evening of Friday 25 May. The 2018 awards programme for the evening is being designed with industry right now. Details on each of the main awards and nomination forms for this year’s awards are being distributed as part of five major SafeStart meetings being run by the forestry industry at the beginning of the year. Early indications are that interest from across the industry to nominate individuals and companies for the 2018 awards programme is already very keen.
For those in the South, mark the dates into your diary. Nominations close on Friday 30 March 2018. Start to give some thought as to who you can nominate in your or someone else’s company or crew. Who’s made a difference? Who’s really stood out this year? Who deserves to be recognised for their efforts?
Click here to download the 2018 Award Details and Criteria and 2018 Awards Nomination Form
Further details can be found on the SWC website .
Tech events for 2018 - mark the dates into your diariesAlong with industry, the Forest Industry Engineering Association (FIEA) has developed an Events Planner for the upcoming year. We've already had a number of industry associations and suppliers contact us to build them into events for the year following promotion of the events planner late last year.
The planner has been designed to enable forestry and wood products companies to pencil the dates into your own calendars for this year and for industry associations, research organisations and those involved in setting up your own programmes for 2018 to take note of the dates (and ideally look to dovetail in to the tech events timing and location to add value to the industry and those likely to attend).
For product and service suppliers, we hope this forward planning will also enable you to schedule your involvement and to budget early on in the year to the relevant tech event and for overseas suppliers, it will enable you to lock in a time to plan visits to your key customers or distributors in Australia and New Zealand and to link in to the relevant technology events in this part of the world this year.
FIEA forestry or wood products technology events planned for 2018 include;
1. Woodflow 2018
20-21 June 2018, Melbourne, Australia
26-27 June 2018, Rotorua, New Zealand
2. Forest Industry Safety & Technology Conference
8 August 2018, Rotorua, New Zealand
15 August 2018, Melbourne, Australia
3. WoodTECH 2018 – Wood Manufacturing
Dry-mill Scanning, Wood Machining, Timber Manufacturing
11-12 September 2018, Melbourne, Australia
18-19 September 2018, Rotorua, New Zealand
4. ForestTECH 2018
Data Collection & Management – Remote Sensing – Mobile Communications & GIS
14-15 November 2018, Rotorua, New Zealand
20-21 November 2018, Melbourne, Australia
Other forestry technology events being planned include;
6-7 March 2018, Vancouver, Canada
2. MobileTECH 2018
Primary Industries – Innovation through Smart Data
27-28 March, Rotorua, New Zealand
Mark the dates into your 2018 calendars. At this early stage, if interested in either presenting or exhibiting, let us know early on and if appropriate, we can look to build you into the planned programmes.
Attached for your information is a PDF of 2018 Technology Events which provides you with further information on the schedule of tech events planned for next year.
Australian programme to develop tomorrow’s leadersDeveloping tomorrow’s leaders – people with the knowledge and skills to collaboratively drive the future – is a longstanding goal of the Australian forest and wood products industry. For Our Future, the Regional Forestry Collaborative Leadership Program, addresses this by offering professional-level leadership development to industry participants.
Structured around four four-day regional workshops in Mt Gambier, Tumut, and Bunbury, followed by a combined national five-day workshop in Melbourne, the program will be delivered by a consortium comprising the Australian Rural Leadership Foundation, Leadership Victoria and polykala. It is hoped to have to have 12 participants in each region (48 in total) enrolled in the pilot program which will run from February to June 2018.
Participants will be expected to attend nine workshop days, plus deliver pre-work and group projects. This significant commitment of individual and employer time reflects the value and stature of the program and its anticipated outcomes. To minimise barriers to participation, there is a nominal fee of AU$1,000 per participant, plus personal travel costs. All other costs will be borne by FWPA.
For more information, or to nominate a participant, please contact Ric Sinclair, FWPA’s Managing Director at email@example.com or 0407 329 372.
Government well short on land for 1 billion trees promiseThe New Zealand Government is scrambling to find enough land to meet its target of reaching 1 billion trees in 10 years. The Labour/New Zealand First coalition committed to the target, which would require a doubling of the 50 million trees already being planted annually - 270,000 a day on average, or 100 million a year.
But Forestry Minister Shane Jones told The AM Show his team is facing a "real challenge" finding the space. "The Government in this context is not going to go into the business of buying land. There is a lot of land out there - [but] the farmers are leery [and] the M?ori often find it difficult to agree, as you're seeing in Waitangi."
The Government will only boost the current 50 million trees bring planted annually by 10 percent this year, Mr Jones says. That would bring the total to 55 million - well short of the target. "It's not realistic to say it can be done exclusively by the Government," Mr Jones says, adding it was "always a target for the industry".
"Seventy percent of the forestry sector is already owned by foreigners. With the right sort of incentives and improvements to the Emissions Trading Scheme they're telling me they can boost their contribution”.
"With the billion-dollar fund dedicated to forestry, mark my words, I've got officials finally realising they have to surplus land to avoid them becoming redundant.
"The state can't do it alone… it's about $8000 a hectare to buy land so I don't have the necessary money to scream around buying the land. But I'm assured by the officials they will go out and find the necessary blocks of land. It's going to ramp up."
New timber training centre planned for MaryboroughA timber company will open a training centre in Maryborough, Queensland, after struggling to fill vacant positions because of unqualified applicants. Sunchip Group managing director Mark Blackberry said roles offering a yearly salary of AU$80,000 and a work-life balance were difficult to fill.
“We are really struggling to find forestry workers as there are not enough skilled people to drive our machines,” Mr Blackberry said. “The timber industry is sustainable and we are needing more people to realise that. Some of the machines cost $1 million each, and we need to be confident in the people driving them.”
The training centre, which hopes to skill people for the timber industry, is predicted to open halfway through this year. It will also offer courses in mechanics. Mr Blackberry said the shortage of skilled timber workers was a national trend, and those who train-up in Maryborough could also take postings in other parts of the country.
Source: Fraser Coast Chronicle
Study identifies opportunities for NSW forest owners
The study sheds light on the extent and status of the region’s privately owned forests, finding a large number of properties could be more actively managed for forestry and other environmental and social values.
DPI Leader Forests Research Dr Christine Stone said the $750,000 project surveyed more than 600 landholders, wood processors and contractors, and mapped more than five million hectares of North Coast forests.
“We have produced a range of practical resources for landholders to assess their own land – a level of data that the North Coast has not had access to before,” she said. All of the region’s forests have been mapped into timber yield association groups using satellite imagery.
“Aerial photography was also used to assess one million hectares of timber resources, with the information consolidated into forest growth status and site productivity maps,” Dr Stone said. “These mapping products allow landholders to consider their property from a forestry value perspective.”
The project team developed a model that rates larger blocks of forested land according to their forestry importance. The model takes account of forest size, type and productivity, terrain roughness and distance to wood processing facilities. While three quarters of the PNF on the North Coast are commercial forest types that can be sustainably managed for timber, Dr Stone said forest productivity is well below what it could be.
“Data on stand condition suggests there is great potential to improve the health and productive capacity of these forests through more active management,” she said. “There’s a great opportunity to engage with landholders more to increase their awareness and education of silvicultural practices, which can deliver major returns in the medium to long-term.”
Dr Stone said with the right care, this could turn currently underutilised resources into an industry that has the potential to create a new job for every additional 533m3 that is processed. “Research found that many landholders currently use their forests for multiple purposes, providing environmental, social and economic services simultaneously,” she said.
“It was promising to learn that most landholders see timber production and conservation as something that should go hand-in-hand – not separate.” Private native forests span more than 2.9 million hectares of North Coast land – making up more than half of the forests in the region.
To view a selection of the North Coast PNF resources, visit NSW Department of Primary Industries website at www.dpi.nsw.gov.au/forestry/private-native-forestry
Source: New South Wales Dept. of Primary Industries
Drones used to survey B.C.'s wildfire damage
“We can observe the effect and severity of the fire on each individual tree and use all this information to really understand the general patterns in which fires occur,” Nicholas Coops, the Canada research chair in remote sensing and a UBC professor, said in a release.
Previously, forests were surveyed using aerial imagery and satellite imagery. Those images have a rather coarse resolution, and the ones taken by drones are much higher quality. The new technology enables researchers to see forest details down to the centimetre.
The 3D models help researchers gather other information, “Like, how much timber is left standing? Can that be salvaged? And what is the condition of the dead timber—whether that’s likely to be a good habitat for animals of the future,” said Coops.
In 2017, B.C. witnessed its worst wildfire season on record with 11,900 square kilometres of land charred. At the peak of the disaster, 50,000 residents were forced to leave their homes.
In addition to looking at forest damage from fires, drones could also be used to monitor a forest’s healing. Researchers interested in forest regeneration assessment can look at how young trees are growing through time and monitor the progress of harvests.
The researchers partnered with Vancouver-based drone startup FYBR to conduct their study. FYBR’s CEO Patrick Crawford said the research has implications for the forest industry. “Just like a lot of industry today, big data and machine learning are key to how businesses are going to be optimal in the future,” he said.
Quantifying the carbon in NZ log exports
Carbon stocks in the products manufactured in China from New Zealand logs are halved in just under two years. Some 46% of the HWP is lumber and plywood used for temporary construction, while 13% is lumber and plywood used for packaging, which is also short-lived.
In South Korea, the carbon stocks are halved in just over 12 years. Although the 42% of material used for temporary construction has a short-life in that intermediate use, most is recycled into longer-lived particleboard. In addition, 30% of log volume (mainly sawmill slabwood and plymill residues) is used for the production of medium-density fibreboard (MDF), another long-lived panel product.
In India, the overall carbon stocks are halved in less than one year. Some 26% of the radiata pine log volume is directly used for fuel, including slabwood (14%) and most sawdust (12%), while construction lumber (27%) is also used for fuel after use for concrete formwork. Packaging material (31%) is also short-lived, particularly domestic packaging.
In combination, the aggregate decay curve for the three countries has carbon stocks halved in just over two years. These findings have implications for New Zealand's carbon accounting under the Kyoto Protocol and carbon reporting under the United Nations Framework Convention on Climate Change (UNFCCC). If the deferred liability for emissions from HWP is devolved to forest growers participating in the New Zealand Emissions Trading Scheme (NZ ETS), the decay rate adopted for HWP will have a major impact on the carbon stock profile over time for a tree crop, and hence forest profitability and risk and, consequently, the financial viability of afforestation.
To read the full article, click here.
Source: New Zealand Journal of Forestry November 2017
Workforce robots on the horizon
A two-year, NZ$2m project funded by the Science for Technological Innovation National Science Challenge Board is examining how next-generation robots can work with humans in a safe and flexible manner. Researchers will focus on developing robots to work in small-scale manufacturing and unforgiving outdoor environments.
Such technology could become a global specialty of New Zealand robotics businesses, with great export opportunities and long-term solutions for the country’s economic needs. The interdisciplinary research programme involves robotics experts from Lincoln Agritech and Scion, as well as researchers and PhD students from the universities of Auckland, Canterbury, Massey, Otago, Victoria and Waikato.
The programme is laying the groundwork for follow-up projects over the next few years that will focus on making New Zealand a competitive country for the production and use of robots in small-scale, flexible manufacturing businesses and challenging environments such as those found in agriculture and forestry.
“We will advance the science required for a new generation of industrial robotic solutions,” says Lincoln Agritech Group Manager in Precision Agriculture, Dr Armin Werner. “These robots can provide enormous benefits to the primary and manufacturing sectors. Both industries require fast adaptation to different products and markets, and constant responsiveness to changing outdoor environments.
“The robots can assist with complex tasks such as pruning tree or vine crops, safely felling trees on steep slopes or assembling small batches of appliances on demand.” To develop the technology, researchers will investigate how sensors and artificial intelligence can allow robots to perceive and understand their surroundings, flexibly handle new situations through learning or training by humans or other robots, and work in challenging environments.
Norwegian chooses timber for 18-storey building
The record-breaking construction will sit on the edge of the north-eastern tip of the lake Mjøsa in the small town of Brumunddal, an hour and a half’s drive north of Oslo. Spanning 18 floors, the building will include apartments, an indoor swimming pool, hotel, offices, restaurant and communal areas. Construction is scheduled to be completed in December 2018. Moelven, a Mjøsa-local Scandinavian industrial group, will supply the timber constructions from local spruce forests to build the tower and the swimming pool area.
“The assembly and construction of the Mjøstårnet is nothing short of world-class engineering, and will be managed without external scaffolding, despite the complexity of working at heights. We are primarily using cranes and supplementing with lifts as needed. We have reached 33 metres to date, meaning we have 48 metres to go,” says Buchardt.
Buchardt hopes that his ambitions to build the world’s tallest timber building may inspire others. “Through Mjøstårnet we demonstrate that it is possible to construct large, complex wooden buildings. The planned construction of the Norwegian Government quarter can become a wooden landmark internationally,” says Buchardt.
Buy and Sell
... and one to end the week on ... anagrams
This has got to be one of the cleverest E-mails in a while.
And on that note, enjoy your weekend. Cheers.
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