Friday Offcuts 6 April 2018
In short, China’s supply chain is changing to meet the country’s growing demand for wood products. The Chinese Government has in place a long-term strategy to ensure that the country’s wood demands continue to be met. They’re delaying harvesting in order to expand their own domestic plantations. Right now, they’re meeting and paying global market prices for our wood, the idea being that in future, as wood resources become scarcer and/or more expensive, they’ve then got the ability to switch to their own domestic plantations. In line with this strategy, Chinese state-owned companies appear to be focused on developing their global supply chains. Further strategic investments are also expected to be made in overseas timberlands and primary processing plants to meet the country’s immediate appetite for wood. Further details are contained in the story below.
In this week’s issue we take a look at the future of mobility in forestry. Randall Cameron, Managing Director Australia with the company Mobile Mentor has long been a mobility evangelist in this part of the world. He’s well known to our own industry having worked alongside major forestry companies in both Australia and New Zealand making the switch from paper based collection of field data to digital. He’s spoken at a number of recent FIEA technology events (and will be presenting at the upcoming WoodFlow 2018 series ( www.woodflow.events ) on the rollout of electronic log docketing across a number of major forestry businesses across Australasia). In the article in this week’s issue Randall explores the mobile technology trends being seen within our own industry.
Finally, for those working with larger machines in our industry, we’ve included a story this week that may well resonate with a number of you. If your expensive new machine breaks down, gone are the days of repairing it yourself or taking it down to the local mechanic or engineering shop. The intellectual property rights to make the repairs isn’t with you the owner – but with the dealer. In Nebraska, local farmers have been putting pressure on the legislators and a “fair repair" law is being proposed that’s aimed at allowing farmers to repair their own tractors. If successful, the Right to Repair Act is going to make it mandatory for companies to disclose their diagnostic software and sell parts. Enjoy this week’s read.
This week we have for you:
5 mobile technology trends in the forestry industryThe Paperless Forest
The forestry industry has been the top user of mobile technology in Finland for many years. That is a big deal when you consider that Finland is a global leader in mobile technology (thanks to Nokia and others), and a global leader in forestry (Stora Enso and others). So, what can we learn and adapt from Finland to forestry operations in other countries?
How is Finland Using Mobile Technology?
Firstly, it is revealing to know that all information moves wirelessly in Finnish forests.
The chain starts from a GPS-aided definition of the logging area and of any nature protection sites that must be preserved. The information travels via satellite to the digital maps of the forest company that has bought the wood since the buyer is responsible for harvesting and haulage to the sawmill in Finland.
Before harvesting, this map is transmitted wirelessly to the harvester’s computer. The same goes for the instructions on the harvesting volumes and the lengths to which the logs of each timber species and grades should be cut. These instructions are based on the orders from the sawmills.
The information on the volumes of different timber grades harvested is transmitted to the forest company wirelessly. Then the information about where to collect the wood from and where to deliver it is sent to the computer of the truck, along with an optimised driving route.
The harvesting and transport of wood is usually carried out by small, specialized enterprises working as subcontractors for the forest company. Their information systems are connected to that of the forest company, which closes the loop from sawmill to harvester to haulage contractor.
Now we need to keep in mind that cellular networks cover 100% of the population and a very high percentage of its landmass in Finland. This is partly due to their early start with mobile networks in the 1980s but more importantly to the 450 MHz frequency, which is better at penetrating forests and buildings that the 900 MHz or 1800MHz used elsewhere.
It takes 23 years for a pine tree to grow from seedling to a mature tree. In the context of mobile technology, that is about 10 product lifecycles. During that time, you will probably receive 10,000 updates to all the software and apps on your mobile devices.
However, some things might not change such as the lack of mobile coverage in a forest. if we accept that as a constraint we have to live with, how will the next round of innovations in mobile technology benefit the forestry industry?
Here are 5 areas where we believe forestry operations will benefit from mobile technology in the foreseeable future.
1. Capture Everything
RFID tags are becoming more cost effective and so powerful that we can visualise a scenario where every log is stamped with an active RFID by the head of the harvesting machine. Each log could be individually recorded as it is loaded on the truck and delivered to the mill by having an RFID reader on the lifting arm of the truck. Forest inventory could be assessed by scanning a wood pile with an RFID reader to get the exact log count.
Weighbridges could also be equipped with RFID readers to record the weight, log count and serial numbers of the load which is then sent to the mill even before the truck arrives. Everyone benefits from more automation, more transparency and more accuracy through the entire supply chain.
2. Image Recognition
If you use Google Photos you will appreciate the power of artificial intelligence in image recognition. Ask Google Photos to search for “trees” and you will be amazed at how quickly you will see every photo you have ever taken of a tree. But it’s not just about image recognition, several apps can perform image analysis and distinguish Pinus Radiata from Douglas Fir with incredible accuracy. When we harness the power of mobile technology into forestry, we should be able to use apps with image recognition, augmented reality and machine learning to perform tasks like identifying species, log grades and weight.
Source: Mobile Mentor
AKD finalises Yarram sawmill purchaseAssociated Kiln Driers Softwoods (AKD) officially took ownership of the Yarram Sawmill after finalising the purchase with Carter Holt Harvey (CHH) Woodproducts earlier in March. Regular operations of the mill resumed on Monday 25th March, with all 60 existing employees offered ongoing employment.
The Yarram Sawmill processes approximately 150,000 cubic meters of saw-log into a range of timber products from its location in Gippsland, Victoria. AKD Softwoods CEO Shane Vicary believes Yarram is the perfect fit for the AKD Group.
“The Yarram business just like the Caboolture business purchased earlier in March, is a very well-run operation, with a fantastic team, and excellent plant” Mr. Vicary said. “We see this as a perfect fit for AKD, and will complement our existing operations in Victoria”.
“This exciting acquisition in eastern Victoria provides us with new customers and a greater range of products to offer our existing customers. AKD has a long-term commitment and belief in the Australian Forest Products Industry, and this is clearly shown in our acquisitions of the Caboolture and Yarram operations, as well as our brand new Sawmill in Colac”.
China's changing supply chainThe log and lumber supply chain to China and Chinese wood markets overall are entering a whole new phase. This is especially evidenced by the dramatic reduction in China’s domestic timber harvest and the Chinese government’s crackdown on polluting mills in a mandated policy to improve air and water quality. What this means is that traditional Chinese industries are being closed or curtailed, slowing demand for logs and expanding the demand for lumber. In response, China’s supply chain is morphing and adapting in a variety of ways to meet the country’s growing demand for wood products.
It appears the Chinese government has a long-term strategy to ensure that the country’s wood demand continues to be met. Of particular note is the One Belt/One Road initiative, aimed at developing extensive transportation links to key supplying countries around the world. By developing such a supply chain, China is better able to access those countries’ “cheap” raw materials (i.e., inexpensive relative to the high levels to which global log and wood products prices are headed).
The strategy of the Chinese government may be a simple one: delay harvesting its own timber in favour of expanding domestic plantations. The goal would be to increase its own internal timber supply for use later when it is truly needed (and by which time global supply will have become even more expensive). In short, China is opting to pay global market prices now to purchase its raw materials, transporting its purchases home via its increasingly well-developed and efficient supply chain to the rest of the world. In future, as these raw materials become scarce and/or more expensive, the country will have placed itself in a strong position to make the switch to utilizing its domestic plantations and other internal resources.
With these goals in mind, Chinese state-owned companies appear to be focused on developing their global supply chain as a means to become highly positioned in offshore countries in the short-term and for the future. Therefore, despite paying higher open-market raw material prices, this highly strategic plan will lead to more efficient logistics. It will also encourage increased offshore production for export to China.
Also, with this objective in mind, further strategic investments are likely to be made in overseas timberlands and some primary processing plants to supply China via the One Belt/One Road initiative. At the same time, China’s pace and volume of purchases, which will encompass a wide variety of raw materials, will be strategically timed around pricing developments, i.e., the Chinese government will invest what it needs, when it best serves the country, in order to meet its aggressive long-term supply objectives.
With returns on investment considered less important than having a diversified and accessible forest resource in the future, most of China’s domestic forest plantations feature a mix of eucalyptus, poplar, Chinese fir and masson pine. It will take 20 years to grow coniferous plantations, so any future incremental supplies from these sources will not be ready until 2035 (excluding any new coniferous plantations already established), dictating a need for rising volumes of imported softwood logs and lumber for an indefinite period of time.
Of further interest are the considerable developments taking place at the major land ports at China’s northern border with Russia. Team members from both FEA Canada and FEA USA have visited these regions as part of the field investigations for a new, upcoming multi-client report — China’s Import Demand for Softwood Logs and Lumber to 2022 (subtitled The Changing Supply Chain in China with a Focus on Russia’s Industry/Export Potential). It has become clear that things are very dynamic in both northern China and Russia.
First, it has been reported that Chinese banks have up to RMB300 billion (US$50 billion) available to spend on forestry and mill investments in Russia (RMB20 billion, equivalent to US$3 billion, have been spent thus far). Second, there are more block trains being organized from Russian and/or northern Chinese land ports to transport lumber to strategic destinations within China. Third, log and lumber production in Russia (by both Russian and Chinese sawmills) is expanding.
Other key dynamic include Chinese companies increasing their access to Russian timber by paying for open-market logs (i.e., they can pay more because their sawmilling costs are lower than those of many Russian mills), and Chinese sawmills in Russia increasing their output and sending green lumber to processing plants in northern China — thereby bypassing the Russian log export tax — for extensive value-added processing. These developments have enabled a wider reach of Russian higher-valued lumber or components that can be shipped further in China and are already beginning to cause some displacement of European and radiata furniture grades in southeastern China (with more expected).
Source: Russ Taylor, Managing Director and Jane Guo, China Office Manager, FEA Holdings – Canada Inc
First national certified forestry contractor’s approvedThree Nelson men are leading the way to improving safety in forestry. Mechanised Cable Harvesting (MCH) – run by Nelson locals Ross Wood, Hamish Matthews and Nathan Taylor - is the first in New Zealand to become a certified forestry contractor.
Set up just over four years ago, the company uses machinery to harvest the trees, which Taylor said was much safer than harvesting using chainsaws. "Putting a guy in the cab of a machine is a lot safer than putting him in a hard-hat." Currently, its crew of nine men work for Tasman Pine Forests. But the company is setting up a second crew that will work for Nelson Forests.
National Safety Director of the Forest Industry Safety Council Fiona Ewing said that MCH's certification meant it now had an industry-wide stamp of approval for its safety practices. Most contractors have to comply with safety standards set by forest owners and managers and pass safety audits. But until now there was no single certification system that applied across the industry.
Taylor said becoming the first Safetree Certified Contractor was a great thing. "What I like about this scheme is that it goes beyond the paperwork. It includes an on-site audit that looks at things like whether you've got a good crew culture. That's important because your culture affects what happens on the ground every day - whether people take ownership and look after each other. It's really important in making a good workplace."
Taylor said the certification process wasn't onerous and took less than a day and a half of his time. "If you run a good operation you should be proactively doing all these things anyway." Nationally, more than 100 contractors have begun the certification process. About 130 workers have also been certified under the Safetree Professional Forest Worker scheme, established in 2016. Both schemes were set up by FISC, in partnership with the industry. FISC also runs the Safetree.nz website, which provided safety information to those working in forestry.
"This is big step for forestry and is a sign of the industry's growing professionalism ... certification will help lift safety standards - which is good for contractors, for workers and for forest owners and managers."
Photo: National Safety Director of the Forest Industry Safety Council (FISC) Fiona Ewing (left) and Nathan Taylor (second from right) with the Mechanised Cable Harvesting crew . Source & Photo: Stuff
Optimising radiata pine stand densityOptimising radiata pine stand density could increase the net value of New Zealand’s plantation estate by NZ$1.7 billion.
The Scion research team including Dr Mike Watt, Mark Kimberley, Jonathan Dash, Duncan Harrison, Dr Juan Monge and Les Dowling, used the productivity indices Site Index (SI) and 300 Index (I300) to develop a model that predicts the optimum final crop stand density (Sopt) for a standard structural grade regime. Using this model, the team was able to develop productivity maps, or surfaces of Sopt covering the whole country.
The average predicted Sopt for growing structural grade logs across New Zealand was found to be 614 stems per hectare. As the current final stand density for structural grade regimes averages around 500 stems per hectare there is definite scope for increasing the volume of high-value log products.
Most recently, the researchers have run a series of simulations to check the accuracy of the model’s Sopt predictions, and to look at the potential economic gains of optimising stand density.
Net value per hectare, internal rate of return (IRR) and net present value (NPV) were all found to increase linearly as stand density approached Sopt; beyond Sopt values increased very slowly or plateaued. Increasing stand density to Sopt will result in gains in gross and net value of around $5,200 and $2,320 per hectare and a 0.44% increase in IRR. The potential gains for the entire plantation estate are $3.8 billion (gross) and $1.7 billion (net), which, when discounted, are equal to $349 million and $156 million in 2017.
Forest owners and managers can use the developed model with input parameters that reflect their specific situation to plan targeted operations to optimise stand density and maximise the value of their crop.
For further information on this paper contact Dr Mike Watt at; firstname.lastname@example.org
Source: Scion Connections
Unmanned vehicles getting bigger and biggerWhen most people think of drones – even commercial ones – they picture a quadcopter, or maybe a long endurance fixed wing. But at the larger end of the market, there are new developments in a totally different model of unmanned aircraft: an industrial sized, gasoline powered vertical take-off and landing (VTOL) craft.
California-based UAVOS recently demonstrated their SURVEYOR-H at UMEX in Abu Dhabi, which they call the “tractor modification” of a VTOL drone. Like a tractor – or a tank – the goal of the vehicle isn’t designed for long flight endurance or sleek speed. At a take-off weight of 87 kg, the company says that the design is geared towards durability, extended operation life, ease of use, and serviceability.
Gasoline-powered, it has a flight range of about 250 miles, with a practical ceiling of 6800 ft. It flies for about 5 hours with a relatively small payload of 5 kg. It’s big. It’s reliable. It’s safe and relatively easy to handle. But what’s a huge industrial drone with a relatively light payload capacity used for?
Quite a number of things, evidently. “For the new helicopter, a target payload with a 4K day camera, thermal camera and laser rangefinder is designed,” says the company. “Weight of the gyro-stabilized suspension is 3.6 kg. Its gimbal includes a computer for processing video on board, capturing and tracking targets, recording data and automatic guidance.”
Vadim Tarasov, UAVOS investor and board member says: “The technical architecture of the new VTOL was designed by taking into account the experience of commercial use of helicopters with different target payloads. The new UAV embodies a whole range of design features that enhance the strength and operational survivability of the machine. So, the construction of the unmanned vehicle was strengthened. The helicopter has a completely aluminium framework without the presence of hobby components.”
New fees-free forestry apprenticeships offer flexibilityNew apprenticeship programmes will give New Zealand forestry workers the flexibility they need to succeed – and apprentices could qualify for two years of funding under the government’s new “fees free” scheme. New Zealand Industry training organisation Competenz has launched two forest harvesting apprenticeships – one in manual operations and one in mechanised operations.
They have been designed with extensive input from Forest Industry Contractors Association (FICA) members, logging contractors and forestry managers, and to ensure they are modern and practical. Competenz chief executive Fiona Kingsford says: “We surveyed FICA members in November 2016 to gauge feedback on the need for apprenticeships, and the ideal programme content and duration. The survey confirmed that yes, the industry wanted an apprenticeship programme, the ideal duration was two to three years, and a mix of skill sets across operations and levels were required.”
With mechanisation increasing, a specific apprenticeship has been developed that ensures apprentices gain key entry-level skills and knowledge before advancing to operation of mechanised processors and harvesters. It also allows for people completing the basic machine operations programme through a provider to start an apprenticeship when they are employed.
Kingsford says forest harvesting apprenticeships offered in the past have been challenging to finish on time given the unique work environment. “Apprentices change roles within crews or move between crews a lot which means their roles and responsibilities change. We found a lot of them were having to pull out half-way through their training because they couldn’t complete their qualifications. But these new programmes are flexible and our industry partners agree they are fit for purpose.”
On-the-job training without the fees
The government has made it more affordable for employers to train people on-the-job with two years fees-free industry training through Competenz. This means the costs usually paid by employers, apprentices and trainees in the first two years will now be free for some people. Apprentices can check their eligibility at www.feesfree.govt.nz before signing a training agreement.
The policy came into effect on 1 January 2018 and Competenz is already signing up people who qualify for funding. To find out more about forest harvesting apprenticeships, call the Competenz Customer Services team on 0800 526 1800.
OneFortyOne drops SA Tarpeena millOneFortyOne has confirmed that it will not be undertaking any further investigation into a proposed greenfields particleboard mill at Tarpeena, South Australia. The decision not to proceed to the next stage follows two years of extensive work into the feasibility of such an investment.
The feasibility study concluded that while the mill may have made a positive contribution economically, the significant industry changes including strong domestic market growth and two local acquisitions over the last two years have significantly changed market conditions.
OFO will focus on its immediate opportunities, including investing in and bringing together the activities of its mill and forestry businesses. OFO will review any new opportunities for investment that may emerge.
Source: OneFortyOne Plantations Pty Ltd
Trillion-dollar fund for fighting US wildfiresA deal in the recent U.S. federal spending bill to fund wildfire fighting has drawn praise but also some concern over a provision relaxing rules on cutting trees in national forests. The US$1.3-trillion bill signed by President Donald Trump set up a contingency account for wildfire fighting funded with up to US$2 billion a year for a decade.
Previously, the escalating costs of fighting worsening wildfires, especially in the western United States, has seen federal officials take money from budgets for other activities like maintaining campgrounds and trails.
“This will end the fire borrowing that we have seen that has prevented us from doing the kind of fuel reduction that we would like to see to protect our communities,” said Washington Senator Maria Cantwell. “And it will help us better manage the stewardship contracts and release the funds that should be going to recreation management within our forest,” she said.
A wide range of groups praised the so-called “fire funding fix” that became an increasingly pressing topic after last year’s devastating wildfire season – which hit California particularly hard – cost over US$2 billion.
“The great bipartisan work on a fire funding fix shows what can happen when diverse constituents – from landowners to industry to conservationists – and a diverse coalition in Congress work together toward a common cause,” said Tom Martin, who heads the American Forest Foundation, in a statement.
The foundation is part of a coalition of over 100 recreation, timber, conservation, indigenous and hunting groups that pushed for the dedicated firefighting money. But conservationists are concerned that the bill streamlines approval for local authorities and private landowners to fell trees on public land parcels smaller than 3,000 acres.
The relaxed regulation, known as a “categorical exclusion”, was welcomed by those on the frontlines of wildfire country. “I’m in favour of the categorical exclusion as it pertains to improving defensible space and lessening the threat from forest fires hitting populated areas,” said Bob Roper, the retired Ventura County, California fire chief. However, Roper told the Thomson Reuters Foundation it would take “a period of years” for the money to reach those on the ground and start making a difference.
Source: Thomson Reuters Foundation
B.C. (re) launches forestry safety campaignWorkSafeBC has released a new three-year plan to help employers reduce serious injuries in the forestry sector. The 2018-2020 Forestry High-Risk Strategy is a renewed three-year strategy for prevention activities in harvesting and related operations.
“The intent of the forestry high-risk strategy is to implement focused and effective inspections in those areas of the timber harvesting sector that have the most risk to workers,” said Dan Strand, Director of Prevention Field Services for WorkSafeBC. “Our goal with the high-risk strategies is simple — to reduce the number of serious injuries.”
Identified high-risk work activities typically fall into five areas of timber harvesting:
- Manual tree falling
- Log transportation
- Cable yarding
- Mechanized harvesting
In addition to the five main areas, emergency-response planning has also been identified as a critical target area for the forestry high-risk strategy. Due to the continuing high injury rate in hand falling, a dedicated inspection team will focus on employers with high injury rates and/or poor compliance rates.
WorkSafeBC’s high-risk strategies identify and target industries and employers with a high risk of serious workplace injury and a significant contribution to the serious-injury rate. High-risk strategies include four industry sectors: construction, forestry, health care and manufacturing.
More information about the forestry high-risk strategy, including 2018 deliverables and timelines, is available at worksafebc.com.
- The serious injury rate in the forestry sector is much higher than the average in other sectors. In 2016, the serious injury rate in forestry was 1.2 per 100 person-years of employment, compared to 0.3 across all sectors in B.C.
- In 2016, there were 13 fatal workplace incidents involving forestry workers (based on the classification units that comprise the forestry high-risk strategy).
Machinery repairs – so, just who owns the machine?This one may well resonate with some of our readers. The days of home tractor repair are coming to an end with machinery technology and tightening intellectual property restrictions meaning farmers are forced to pay big bucks to fix their machinery. When Nebraska farmer Tom Schwarz bought a tractor he did not realise he would be bound to his John Deere dealer who holds onto intellectual property rights to fix it.
"When you paid the money for a tractor, you didn't actually buy the tractor … because all of the intellectual property is still theirs," Mr Schwartz told tech journalist Jason Koebler in a recent documentary.
"You just buy the right to use it … for life." Farmers and independent machinery repairers across the United States are now campaigning for the right to fix their own machinery. Mr Schwartz had always bought second-hand parts to keep his machinery going, but is now forced to call a dealer because of its software.
"We will put components on tractors. As farmers we don't like to spend a lot of money so we buy used components if we can," he said. It used to be we'd mount them ourselves and we'd utilise the tractor from that point on.
"Now we can't get the component and the tractor to talk to each other. So, you literally have to bring Deere out to do all this or your tractor is not going to operate." In Nebraska, a "fair repair" law is being proposed to allow farmers to repair their own tractor. If successful, the Right to Repair Act would make it mandatory for companies to disclose their diagnostic software and sell parts.
Journalist Jason Koebler told the ABC that farmers are using software downloaded from Ukraine to avoid the onerous restrictions. "Farmers are hacking their own tractors. In places like Ukraine and Eastern Europe the software is sold to farmers without the encryption they have in other countries like the United States," he said.
"So what people in Ukraine are doing is uploading these versions of the software for free online, and people in Nebraska are pirating it and hacking their tractors with it. "They're essentially able to have access to the same technology the John Deere dealerships have in order to fix their things."
The risk for these farmers is that they will break their warranty. Mr Koebler said the fair repair issue extends beyond machinery companies, with firms like Apple and Microsoft taking interest in the Nebraska case. "It's also your iPhone. Apple doesn't sell parts to your iPhone," he said.
Source: ABC Rural
The story of Abodo heat treated timberAbodo’s thermally modified timbers stand the test of time, they are beautiful, durable and sustainable. Even better, they’re safe for people and the environment. That’s the message being put forward by a Kiwi-based company to their customers. Interested in the thermal modification process and the Abodo Timber Story? Check out the video below.
Daiken cleared to acquire Dongwha's operationNew Zealand’s Commerce Commission has granted clearance for Daiken New Zealand to acquire 100% of the shares in Dongwha New Zealand Limited. Daiken, which manufactures and supplies MDF from a plant it operates in North Canterbury, sought clearance to acquire Dongwha, which manufactures and supplies MDF from a plant it operates in Southland.
In making its decision, the Commission considered competition issues in the national market for the manufacture and supply of raw MDF panels. Deputy Chair Sue Begg said the Commission is satisfied that the merger would not substantially lessen competition in the relevant market.
“We were satisfied on the evidence before us that the market is currently delivering competitive outcomes and that the proposed acquisition is not likely to substantially change that situation,” Ms Begg said. A public version of the written reasons for the decision will be available on the Clearances Register in the near future.
Daiken is the New Zealand subsidiary of Daiken Corporation, a Japanese company specialising in the manufacture and supply of wood-based construction materials. In New Zealand, Daiken manufactures and supplies medium density fibreboard (MDF) from a plant it operates in North Canterbury.
Dongwha is 80% owned by Dongwha International Co., Limited (a company incorporated in Hong Kong) and 20% owned by Laminex Group (N.Z.) Limited. In New Zealand, Dongwha manufactures and supplies MDF from a plant it operates in Southland. Its minority shareholder, Laminex (which is part of Fletcher Building Products Limited), purchases MDF from Dongwha for its own wood products business in New Zealand. Laminex also on-sells some of the MDF it purchases from Dongwha to other parties.
New Forests grows investment in eucalyptus plantationsInvestment firm New Forests has announced an additional equity investment in its first Asian forestry investment, a eucalyptus plantation business in Sabah, Malaysia. At a ceremony in Kota Kinabalu, the new investment into Acacia Forest Industries Sdn Bhd (AFI) from New Forests’ Tropical Asia Forest Fund (TAFF) was welcomed by the Sabah Forestry Development Authority (SAFODA), which is a joint venture partner in the plantation business.
The additional investment comes nearly five years after TAFF’s initial investment in the Hijauan Group. The group’s subsidiary company Hijauan Bengkoka Plantations Sdn Bhd (HBP) is a joint shareholder of operating plantation company AFI alongside SAFODA, a Sabah State government agency involved in reforestation development. The additional investment will be made by TAFF via its majority ownership of the Hijauan Group. New Forests, on behalf of TAFF, has worked together with SAFODA to enable this further equity investment to continue to execute on AFI’s strategic plans for improving plantation quality and transitioning the company to a higher value sawlog production model.
Paul Speed, Director of Investments and Operations for New Forests in Asia and Chairman of HBP noted, “Since our initial investment in the Hijauan Group, we have worked towards improving the quality of the AFI plantations and ensuring AFI’s position as a leading plantation company in Sabah. We have already implemented significant capital investments, such as construction of a new state-of-the-art nursery, refurbishing facilities and housing, and supporting local water infrastructure projects. The further equity investment by TAFF over the next five years will ensure that strategic initiatives like these can continue to be implemented through the AFI business.”
AFI is headquartered in Kota Kinabalu with plantations located on the Bengkoka Peninsula of northern Sabah. Since 2015, AFI has switched from planting primarily Acacia mangium to Eucalyptus pellita, a crop that offers additional market versatility and better resilience to locally prevalent tree diseases. The new seedling nursery opened in January 2018 with a production capacity of 2.5 million seedlings per annum.
To meet New Forests’ environmental and social investment requirements, AFI has run a multi-year social engagement program culminating in a participatory mapping exercise that completed in 2016. AFI has since developed a new social forestry strategy based on the outcomes of engagement and the need to address land tenure and support local livelihood opportunities. With the additional investment from TAFF, AFI will continue to focus on re-establishment of its commercial plantations while also piloting new models for outgrower forestry in the Bengkoka Peninsula.
New Forests’ TAFF is a USD 170 million fund that launched in 2012 as the first forestry fund dedicated to sustainable forestry in Southeast Asia. The fund has since taken equity positions in three forestry businesses in Malaysia, Indonesia, and Laos. These investments encompass more than 150,000 hectares of land with the target of managing and establishing more than 60,000 hectares of certified plantation forests.
Source: New Forests Pty Ltd
Buy and Sell
... and one to end the week on ... did you know
1. A Strawberry isn't a Berry but a Banana is.
Must be time to send a few more of those jokes - end of week stories - through to us huh? And on that note, enjoy your weekend. Cheers.
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