Friday Offcuts – 24 February 2017

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Job creation of course has been a national priority for the Trump campaign in the U.S. It’s been front and centre of Donald Trump’s executive orders since gaining office. I think many outside the U.S. have probably picked up that bringing back jobs is going to be a major challenge for the new President and his administration. It’s not so much that manufacturing jobs in the U.S. had been lost to other countries (it’s obviously been a good vote catcher though) but rather, that mechanisation of manufacturing has been the root cause of declining employment in the country. It’s been the move to AI, robotics, and other clever technologies that is forever changing the shape of manufacturing in the U.S. – and around the world right now.

Regardless of what slick moves are going to be made in the US in the next six months – or over the next four years or so – the trend is inescapable. The nature of employment both in the U.S. and elsewhere is fundamentally changing. It can’t be reversed according to WorkingNation and they’re predicting that in the next 25 years, 47% of our current jobs are likely to be eliminated by technology and globalization. Read more on this trend along with some of the implications to global manufacturing and the current workforce in this week’s story.

On a much more positive note we have; Eastland Port in New Zealand, despite the normally slower than usual logging activity at the front end of the year, breaking all log throughput records for the month, Kebony in the US who have just launched their new range of clear grain radiata pine decking products and roundwood and log prices in New Zealand continue to climb this month.

In New Zealand this week, Federated Farmers in what was a watershed announcement, released a new policy on climate change in which they say they’re planning to start planting trees on farms to help offset their emissions and are looking to Government to provide greater incentives for planting. Note that B.C. have just announced plans to pump some $150 million into forest rehabilitation and tree planting across the Province. In Australia, we report on a truck roll-over prevention program in the Green Triangle region of SW Victoria and SE South Australia that's already paying real dividends with the number of reported incidents decreasing by a massive 65% in 2016.

Finally, in keeping with this safety message, next week the Forest Industry Safety Summit ( series begins with record numbers attending from across the sector; from the regulators – to major forestry and wood products businesses - to the many forestry contractors in this region who are grappling with improving safety for their crews every working day. It’s timely with an array of industry led safety initiatives underway and innovative practices that already are showing real promise in the work place. Well over 500 from the industry have already registered for this latest series being run by FIEA. Late registrations to either venue can still be made on-line on the event website. Enjoy this week’s read.

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Farmers want action on tree planting incentives

New Zealand farmers want research into alternative land uses to help them to cope with climate change, and greater incentives to plant carbon-storing trees on their farms. In a new policy on climate change, Federated Farmers remains opposed to making biological emissions liable under the Emissions Trading Scheme, but explicitly acknowledges that farming is one of the causes of climate change.

“The scientific consensus is that climate change is happening and that humanity, including agriculture, contributes,” it says.

Biological emissions make up 49 per cent of New Zealand’s total gross emissions. While farmers must account for the emissions produced on their farms, the Government has indefinitely excused them from being held financially liable for them. Federated Farmers’ new policy says that should continue, as farmers in other countries are not subject to carbon pricing.

Farmers are, however, prepared to start planting trees on their farms to help to offset their emissions, and say that the definition of carbon forests should be broadened to incentivise planting.

Federated Farmers also wants help for farmers in preparing for the impacts on climate change. “There should be greater investment in research to support adaptation in a changing and more volatile climate for agricultural production,” it says.

“Research should explore alternative land-use and production systems to provide farmers with as many options as possible. Research should also explore the potential for broadening the definition of carbon forests to incentivise tree planting for soil erosion, water quality, animal welfare (shelter and shade), and biodiversity.”

The call for more planting on farms is being welcomed by foresters, with Forest Owners’ Association chair Peter Clark describing it as “correct and potentially far-reaching” ( media release).

"Planting trees now will also enable farmers to positively enter into the Emissions Trading Scheme and sell carbon credits if and when they are required to meet their greenhouse gas liabilities by this or any future government” says Peter Clark. “It’s not a competition for land use between stock and trees, any more than it used to be a competition between farming sheep for meat or wool. There’s a place for both on farms.”

Source: Carbon News, Forest Owners Association

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January log volume record smashed

New Zealand’s Eastland Port achieved record log tonnage throughput in January, reaching 178,197 tonnes. It's an increase of 45 percent compared to last January when it reached 96,579 tonnes. Port General Manager Andrew Gaddum says it was the busiest January for wood export since Eastland Port was created in 2003.

“January can traditionally be a low volume month because of the Christmas and holiday breaks when forest operations stop, but this January’s throughput nearly doubled that of January 2016. Nine log vessels took away 178,197 tonnes of wood; three vessels departed with 4012 tonnes of squash; and three cruise ships arrived and left with just over 3000 people.

Eastland Port’s busiest months for log throughput are March and April, and September and October. In 2016, 2.3 million tonnes of logs were exported and this is expected to rise to 2.5 million tonnes for 2017.

Mr Gaddum says the port continues to grow side-by-side with the forestry industry and manage the huge volume of logs coming to the port. “While Eastland Port will be able to handle the 2.5m tonnes of wood predicted for this year, projections show the port will need to be able to handle 4 million tonnes over the next ten years.

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New record for NZ roundwood log prices

Strong domestic building activity in New Zealand combined with buoyant horticulture and viticulture industries has pushed up the price of roundwood log prices to a new record. The average price for roundwood logs rose to $90 a tonne in February, up $5 from January's average price and at the highest level since AgriHQ began collecting the data in early 2002.

New Zealand local councils approved consents for 29,970 new dwellings last year, up 10 percent from the previous year, as record net migration and low interest rates spur demand for additional housing. A booming horticulture industry is also spurring investment activity in that sector, helping stoke demand for roundwood.

"The roundwood sector is currently in a period where interest is at unprecedented levels," AgriHQ analyst Reece Brick said in his monthly forestry market report. Demand for poles has been especially strong, for the likes of foundations and retaining walls.

"Multiple strands of the horticulture and viticulture industries have also maintained their presence in the roundwood markets as well. The sheer volume of activity has meant some mills have battled to fill orders in recent months."

Export prices for New Zealand logs lifted for every grade covered by AgriHQ's survey of exporters, forest owners and saw millers.

The average wharf gate price for New Zealand unpruned A-grade logs advanced to $128 a tonne, the highest level since AgriHQ records began in late 2008, while prices for various K-grades haven't been this high since the early-mid 1990s. The $166 a tonne recorded for export pruned logs was firmer than any of the previous six months, although lower than the first half of 2016, Brick said.

Shipping rates to New Zealand's key log export destinations slipped. The rate to China, New Zealand's largest export market, declined 1 percent, while South Korea and India both dropped 3 percent.

The latest data showed New Zealand log exports increased 9 percent to 15,913,512 cubic metres last year compared with the year earlier. China took 69 percent of the country's logs while South Korea took 17 percent.

Source: Scoop

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Working to reduce truck roll-overs in SW Victoria

A truck roll-over prevention program being delivered in the Green Triangle region of south-west Victoria and south-east South Australia, is showing signs of success with the number of incidents decreasing by 65% in 2016.

Alan Pincott from Australian Trucking Safety Services and Solutions, said the Green Triangle area has been over represented in heavy vehicle crashes, particularly log and woodchip truck roll-overs, so these numbers are an encouraging sign that the program and subsequent activities are having an impact.

“The roll-over prevention program, which is driven by the timber industry, was delivered to 230 participants at various locations in the Green Triangle area in 2015 and to a further 300 in 2016. It is supported by a marketing program including high quality posters, and large roadside banners, featuring local trucks, which were strategically placed in the area as a reminder of the dangers and the key learnings of the rollover program,” he said.

Truck roll-over data shows that in 2015 there were 14 recorded rollovers in the Green Triangle area. In the time since the prevention program work began, there was a steep decline with only 5 rollovers being recorded. There was also a 35% reduction in overall recorded heavy vehicle crashes from 2015, all of which is a benefit to all heavy vehicle industries in the area, all road users, and the general community. Read the full media release.

Source: VAFI The News Mill

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Native forests absorbing more carbon dioxide

New Zealand’s forests and other land areas may be absorbing up to 60% more carbon dioxide than has been calculated, with much of this uptake likely occurring in native forests, NIWA scientists have discovered.

New research led by NIWA atmospheric scientists Drs Kay Steinkamp and Sara Mikaloff-Fletcher, indicates that New Zealand’s forests absorb much more than previously thought, with much of the uptake occurring in the southwest of the South Island.

Carbon dioxide is a primary greenhouse gas and responsible for most of the human-induced warming in the atmosphere. Globally, carbon sinks, such as oceans and forests, have helped mitigate the effects of climate change by absorbing about half the carbon dioxide emitted by human activities over the past few decades.

New Zealand’s forest carbon uptake played a key role in meeting our commitments under the Kyoto Climate treaty and is expected to play an important role in meeting our COP21 commitments. The results of the research have just been published in the scientific journal Atmospheric Chemistry and Physics. More >>

Source: Scoop

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Nominations sought for NZ forest industry awards programmes

In the lower South Island of New Zealand, the Southern Wood Council (SWC) in conjunction with the country’s Industry Training Organisation, Competenz, will be running it’s industry awards programme again. Close to 400 forestry companies, contractors and transport operators from throughout the lower South Island attended in 2016. The 2017 event which runs on Friday 12 May is expected to be yet another record turnout for all those involved in training, in growing, processing and transporting wood and for those who support the industry in the lower South Island through the provision of key products and services.

For those in the South, mark the dates into your diary. Nominations close on Friday 31 March 2017. By now, you should be working closely with your own staff, companies or crews to nominate those who have made a difference, those who have really stood out over this last year and those who deserve to be recognised for their efforts in the nine major awards on offer?

2017 Award Details and the SWC Nomination Form can be found on the SWC website .

On the East Coast of the North Island, the Eastland Wood Council (EWC) is also celebrating their eighth annual awards programme. It runs in Gisborne on Friday 19 May and typically, around 500 guests turn up each year at the Showgrounds Event Centre. Nominations also close for this awards programme on Friday 31 March 2017.

2017 Award Details and the EWC Nomination Form can be found on the EWC website .

For both regions, 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 major industry awards, the top performers and to profile the real contribution that forestry and those working within the industry are making to the economic and social well-being of each region. For both regions – start to work NOW on those award nomination forms to meet the cutoff of Friday 31 March.

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47% of jobs to disappear in the next 25 years

The Trump campaign ran on bringing jobs back to American shores, although mechanization has been the biggest reason for manufacturing jobs’ disappearance. Similar losses have led to populist movements in several other countries. But instead of a pro-job growth future, economists across the board predict further losses as AI, robotics, and other technologies continue to be ushered in. What is up for debate is how quickly this is likely to occur.

Now, an expert at the Wharton School of Business at the University of Pennsylvania is ringing the alarm bells. According to Art Bilger, venture capitalist and board member at the business school, all the developed nations on earth will see job loss rates of up to 47% within the next 25 years, according to a recent Oxford study. “No government is prepared,” The Economist reports. These include blue and white collar jobs. So far, the loss has been restricted to the blue collar variety, particularly in manufacturing.

To combat “structural unemployment” and the terrible blow it is bound to deal the American people, Bilger has formed a nonprofit called Working Nation, whose mission it is to warn the public and to help make plans to safeguard them from this worrisome trend. Not only is the entire concept of employment about to change in a dramatic fashion, the trend is irreversible. The venture capitalist called on corporations, academia, government, and nonprofits to cooperate in modernizing our workforce.

To be clear, mechanization has always cost us jobs. The mechanical loom for instance put weavers out of business. But it’s also created jobs. Mechanics had to keep the machines going, machinists had to make parts for them, and workers had to attend to them, and so on. A lot of times those in one profession could pivot to another. At the beginning of the 20th century for instance, automobiles were putting blacksmiths out of business. Who needed horseshoes anymore? But they soon became mechanics. And who was better suited?

Not so with this new trend. Unemployment today is significant in most developed nations and it’s only going to get worse. By 2034, just a few decades, mid-level jobs will be by and large obsolete. So far, the benefits have only gone to the ultra-wealthy, the top 1%. This coming technological revolution is set to wipe out what looks to be the entire middle class. Not only will computers be able to perform tasks more cheaply than people, they’ll be more efficient too.

Accountants, doctors, lawyers, teachers, bureaucrats, and financial analysts beware: your jobs are not safe. According to The Economist, computers will be able to analyze and compare reams of data to make financial decisions or medical ones. There will be less of a chance of fraud or misdiagnosis, and the process will be more efficient. Not only are these folks in trouble, such a trend is likely to freeze salaries for those who remain employed, while income gaps only increase in size. You can imagine what this will do to politics and social stability.

Mechanization and computerization cannot cease. You can’t put the genie back in the bottle. And everyone must have it, eventually. The mindset is this: other countries would use such technology to gain a competitive advantage and therefore we must adopt it. Eventually, new tech startups and other business might absorb those who have been displaced. But the pace is sure to move far too slowly to avoid a major catastrophe. More >>.


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70,000 ha forest plantations affected by Chilean fires

Forest fires which broke out in central Chile in mid-January destroyed a total of 556,000 ha forest and grassland by the end of the month. Of this figure, 70,000 ha of forest plantations were affected. This was reported by Spanish news agency EFE on 1 February on the basis of a report by the chairman of Corporación Chilena de la Madera (CORMA), Fernando Raga.

According to Raga, the damage for plantation growers which ensues amounts to a value of US$350m. This amount does not include damage in subsequent areas of the timber processing industry, for example due to fire damage at affected production locations or as a consequence of production stoppages caused by an insufficient supply of raw materials.

In the regions chiefly affected - Maule and Bio Bio - the largest plantation growers include Empresas CMPC, Celulosa Arauco y Constitutión as well as Maderas y Sinteticos (Masisa). According to CMPC, up to 3 February the forest fires affected a total of 19,583 ha, representing some 4% of all the company’s plantations. The fires continued to spread rapidly at the end of January, with the area affected increasing within two days from 12.750 ha to 18.788 ha. By 2 February the spread of the fires was then significantly reduced to approximately 200 ha/day and on 3 February no further increase in the affected area was recorded. The actual extent of losses cannot yet be quantified according to CMPC.


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Forest Harvesting Optimisation project commences

The Australian Industry and Skills Committee (AISC) have approved work to begin on a project to support optimisation of log production. This project will be reviewing and updating occupational skills standards and units of competency, from the FWP Forest and Wood Products Training Package, in line with current forest harvesting optimisation processes and technologies.

The project can be viewed on the Skills Impact website, where there is the opportunity to register your interest to keep up-to-date on project activities. There is also the opportunity to register your interest in becoming a part of the Technical Advisory Committee for the project. Visit the project webpage.

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NZ$20M “promised” for Gisborne timber processing

It must be election year in New Zealand. The Labour party is planning to roll out in the lead up to the election, a total of NZ$200 million in commitments targeting regional development investment. The target of their second major announcement is NZ$20 million, if they get elected, to support the East Coast region's timber processing sector, possibly by helping fund a prefabricated housing plant.

The announcement, by party leader Andrew Little at Gisborne's Prime Sawmill last week, would only be fully spent if matched dollar-for-dollar by local government or private sector funds. For Gisborne, Andrew Little pledged that “a Labour-led government will provide a stimulus package up to NZ$20 million to enable the construction of a timber prefabrication plant and associated infrastructure in Gisborne".

The Taxpayers' Union’s Executive Director, Jordan Williams, went on to describe the announcement as, “pork barrel politics at its worst. No disciplined economic analysis, no business plan, just a bunch of politicians seeking a photo opportunity and headline. This is a Little version of Think Big. Fine politically, but economically terrifying.”

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Paradigm shift in forest safety no surprise to some

The leading professional group for loggers in New Zealand says big improvements in forest safety are no surprise – they’ve been focused on change for 3 years. Forest Industry Contractors Association (FICA) president Ross Davis says new technology and culture change have had a real impact in forest workplaces.

Davis says, “Many of our member contractors have been working closely with safety coaches and innovative engineers in the forest. Real changes in safety are now clear with people communicating better in our crews. Also, mechanised harvesters are making steep slope harvesting much safer.”

Davis says the change in the forest contracting industry has been in collaboration with both forest owners and brokers whose leaders understand the intent of our new health and safety laws. He cautioned though that there are still safety challenges in smaller forests because:

• Not enough of the single crew logging contractors are being guided by the landowners they are harvesting forests for.
• There are a lot of new small forests coming to the market for harvest in the next 8-10 years where the people are not even aware of their legal risks or responsibilities.
• The launch of an industry-wide contractor certification system will be voluntary in its initial stages. Some smaller operators may not think they need it but the opposite is true – they will benefit the most from its two audits designed to quantify people’s business practices are both lawful and safety-focused.

“Our membership is the most well-informed group about safety practices but the message that safety is paramount needs to be heard by farm foresters and the smaller contractors who are going to be operating on their forest land,” says Davis.

Source: Forest Industry Contractors Association

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Soaring U.S. lumber markets

The U.S. lumber markets are already seeing some major price volatility, where W-SPF lumber prices soared by a whopping 25% (US$78/Mbf) in the three-week period between January 27 and February 17, 2017 and up US$83/Mbf over the previous five-week period.

This three-week price increase in U.S. lumber prices is one of the largest short-term gains over the past 20 years. This is mirroring a similar scenario back in early 2001 when countervailing duties (CVD) on Canadian lumber shipments into the U.S. moved into their 90-day retroactive period in mid-May 2001 and the anti-dumping duties (ADD) followed later. The initial combined duties of 32.3% were both in effect in November, 2001.

The largest U.S. lumber price spike ever, based on price changes in consecutive weeks, was in 2001 – before the implementation of the last U.S. duties – when lumber prices spiked higher by US$165/Mbf over a 7-week period. This was followed by two major price collapses over the next six months: one over five weeks for a drop of US$111/Mbf; and a second over 9 weeks for US$122/Mbf.


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B.C. putting $150 million into tree planting

B.C. Premier Christy Clark announced a $150 million investment in silviculture last week in Prince George. She added that it was part of the government's 10-year commitment to put $800 million into forest replanting efforts.

"The new forests will reduce greenhouse gas emissions like carbon dioxide, and we are also going to seek innovative solutions to help us meet our climate goals at the same time," said Clark, speaking at the J.D. Little Forest Centre owned by Canfor. "But let's never forget that the most basic solution is Mother Nature's solution, and that is sequestering carbon in our forests. Planting more trees is good for fighting climate change...I think of that as $800-million invested in climate change”.

“But also, just as importantly, it's $800-million invested in working people in British Columbia to make sure they have a job to go to every day and money to look after the people they love. In that time, these programs are going to create 20,000 jobs - most of them in rural and northern communities - and it will represent a reduction in 11.7 megatonnes of greehouse gasses."

The province's Minister of Forests, Steve Thomson, said that reforestation programs had been ongoing with the harvesting programs. Part of the predicament the industry faced in the first place was the need to rush large harvests of dead trees killed by the mountain pine beetle, and now that that rush is over, there had to be a contraction of the harvesting and milling operations across the large affected regions.

"Since 2005, we've invested over $445 million in reforestation through Forests For Tomorrow," said Thomson. "Today's funding will build on those efforts and ensure our children can enjoy the environmental and economic benefits we enjoy from our forests."

Several forest industry stakeholders applauded the announcement made in Prince George on Friday. One such comment was by John Betts, executive director of the Western Forestry Contractors' Association who said, "This firm funding is good news for the forestry contracting sector, in that it will create meaningful and ongoing employment for our members. This investment creates certainty for the small business owners that comprise our sector and, of course, this investment is also good news for our forests - especially those in the interior that have been damaged by the mountain pine beetle."

Source: Prince George Citizen

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New clear-grain radiata pine decking launched

Wood manufacturer Kebony has announced the North American launch of the next generation Kebony Clear, a complete line of clear-grain decking and cladding products for both residential, public and commercial applications. “Kebony Clear is made from sustainable Pinus Radiata and was developed expressly for outdoor installations that require a clear, premium-looking finish,” Kebony USA Sales Manager Andy Hehl said. “It’s a look that works very well for sustainable, modern decks, facades and landscape architecture projects.”

As with all Kebony woods, Kebony Clear is treated with a bio-based liquid that, after it is cured, provides a combination of outstanding durability and dimensional stability. The patented process results in wood cell walls that are about 50 percent thicker and provide a hardness that rivals the best tropical hardwoods. The company's global headquarters is based in Oslo, Norway, with its production facility in Skien, South of Oslo. The Kebony USA team is located in St. Clair, Michigan.

Source: Kebony Products

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$40M-long-term maintenance agreement awarded

Maintenir Limited has been awarded the trade services maintenance contract for the Kinleith and Tasman Pulp and Paper Mills located near Tokoroa and Kawerau and operated by Oji Fibre Solutions. Maintenir will provide the majority of the mechanical, electrical, instrumentation and stores services across the two main manufacturing sites, under a $40m plus long-term maintenance agreement from April 2017.

This contract is a big win for the newest New Zealand industrial trade services and project management firm. The company will expand from its base in Northland, and its major customer Refinery New Zealand to the central North Island. Maintenir was founded by four long-standing, successful businesses, who share the largest combined engineering workforce in the North Island. It’s a joint venture company providing engineering maintenance and project solutions for heavy industry organisations.

Source: Maintenir Ltd

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Buy and Sell

... and one to end the week on ... the toothbrush salesman

A guy worked for a toothbrush company for 30 years, driving a delivery truck.

One day he’d had enough and stormed into his bosses’ office and said:

“Boss, I’m tired of driving a truck and seeing all these young salesmen come in here and make the real money. I want to be a salesman.”

So his boss says: “No offense Bill, but that’s a pretty severe speech impediment you have, do you really think you can be a good salesman?”

And Bill says: “I don’t care, I’ve been working here 30 years and I deserve a chance.”

So the boss says, “well, alright, Jim called in sick today, so you can take his sales route. Load up a truck with toothbrushes and see what you can do” knowing that Bill wouldn’t sell many toothbrushes.

Bill came back 3 hours later and said “OK, I sold all those, load up the truck again” to which the boss replied “you mean you sold a whole truckload of toothbrushes in one day, that’s never happened in the history of this company, how on earth did you do that?”

So Bill said “It was easy. I went to the shopping mall, and set up the display booth. And I made a big sign that said “free snacks” and put out a few bowls with chips and dip. People would come up, grab a chip, get some dip, take a bite, and then say “Oh My God this tastes like s***!!”

And then I’d say, “It is!! Wanna buy a toothbrush?”

And on that note, have a great weekend. Cheers.

Brent Apthorp
Editor, Friday Offcuts
Distinction Dunedin Hotel
6 Liverpool Street, Dunedin 9016, New Zealand
PO Box 904, Dunedin 9054, New Zealand
Tel: +64 (03) 470 1902, Mob: +64 21 227 5177, Fax: +64 (03) 470 1906
Web page:

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