Friday Offcuts 17 January 2020
The burnt terrain at this stage dwarfs any other recent fires in Australia. For some perspective on the scale of the fires, the area affected is more than twice that ravaged by last year’s fires in Brazil, California and Indonesia combined. In addition to the significant losses already incurred to life, property and to rural communities, the impacts on our own industry (timber supply, harvesting, wood transport and processing) are also going to be significant and long lasting. Large areas of plantation forest in key forestry regions in NSW, Victoria and South Australia have all been hit hard. Aside from personal losses, the downstream consequences to forestry and wood products businesses for years to come are going to be significant.
Reports last suggested that up to 40 per cent of state forest allocated to VicForests for harvesting in East Gippsland has been destroyed in the fires, which at that stage had burnt through 1.2 million hectares of Victoria. Significant areas of East Gippsland’s native hardwood logging allocations (see story this week) have been destroyed by the bushfires. A recent report also suggests that around 47,000ha of state and privately-owned softwood plantations have been impacted in NSW (about one-fifth of total softwood plantations administered by FCNSW). Forestry Corporation estimated about 32,000 ha or 30% of forestry pine plantations around Tumut had also recently been lost to fire. As the fires are contained and extinguished, the true impact on our industry is going to become that much clearer.
Looking ahead, for the upcoming year we’re looking forward to working with you all again. The plan is to continue to bring you the very latest in news and insights into innovative new technologies that we think may assist you in your own business or operation. We’ll also be providing you with regular updates on industry announcements, upcoming events, jobs, tenders and equipment that have been posted by the industry during the week.
Remember, this weekly newsletter together with the monthly industry specific newsletters that we’re producing, harvesttech.news, woodtech.news and foresttech.news are yours to use. Aside from advertising that you send through, any contributions, leads, stories, media releases, links to events or activities within your own company, results from recent trials or contacts that you wish to supply are of course welcomed. And on that note, enjoy this first issue of 2020.
This week we have for you:
Bushfires severe blow to Victoria’s timber industryThe recent fires are a fresh blow Victoria’s timber industry, coming just weeks after the state Labor government announced the end of all native forest logging within 10 years. Sawmills in the east of the state, which had already been struggling to secure enough logs to keep their machines running, said the government’s move would put thousands of workers out of their jobs and put the future of Victoria’s timber towns in doubt.
VicForests said it could not confirm numbers but that it had lost a significant amount of its logging coupes in the area, and would be unable to assess the damage while the fires were still burning. “The East Gippsland fires have had a significant impact on VicForests’ coupes,” a spokesman said. “While the fires are ongoing, we are unable to fully assess the impact. Our current focus is on fully supporting the efforts to manage the bushfires, deploying all available VicForests staff and contractors to the region.”
Construction Forestry Mining and Energy National Secretary Michael O’Connor said the destruction of East Gippsland forest in the blazes put the state government’s transition plan into doubt. “Clearly there’s been significant damage to the resources in East Gippsland and the union will be very concerned about the consequences for employment and the viability of some mills,” Mr O’Connor said. “There will certainly be concerns for the viability of the already flawed transitions plan.”
The industry’s national lobby group, the Australian Forest Products Association, said that some of the plantation trees currently burning, those used for building products, would take 30 years to regrow. “So, when the fires are finally contained, it will be like a slow-motion train crash as the full downstream consequences are felt,” the association's chief executive Ross Hampton said.
“Large areas of our plantation forest estate in key forestry regions in NSW, Victoria and South Australia are on fire and the downstream consequences for rural communities will be severe.”
A spokesman for Victorian Agriculture Minister Jaclyn Symes said the government was aware of significant loss of logging coupes in East Gippsland but that its immediate focus was on “extinguishing the fires and protecting life”. The Victorian timber industry group VAFI said the full extent of the damage could not yet be assessed.
RMS announces sale of Australian forest assetsResource Management Service, LLC (RMS) has announced that it has successfully completed the sale of its Tasmanian hardwood plantations to investment funds advised by Global Forest Partners LP (GFP) of Lebanon, New Hampshire.
The transaction included total productive area of 21,000 hectares on 36,500 hectares of freehold land. The assets consist of two operating units spread across the northwest, northeast and southern regions of Tasmania, and were acquired by RMS from receivers in 2014 and 2015 with a strategy of generating near-term cash yields and long-term asset appreciation for the firm's institutional investment clients.
Funds “Our decision to monetize these assets on behalf of our clients was driven by our assessment that market conditions were attractive for a sale. We expected the market would fully value the significant work RMS has undertaken to restructure and improve the portfolio of assets”, said Craig Blair, President and CEO of RMS.
The plantations are largely stocked with Eucalyptus nitens and are located in close proximity to processing plants and ports. The output from the plantations can be sold as hardwood logs for solid wood processing and as hardwood chips. The timber grown on the properties is sold into Asian export markets, which has a strong appetite for hardwood timber products. According to Blair, selling the two Australian estates together enhanced the overall value of the offering by providing a competitive level of scale in the Tasmanian hardwood industry.
"We are pleased to have taken these plantations through a value-enhancing investment cycle for our investors," said Blair. “Australia is an attractive destination for sophisticated institutional investors, like our clients, because it offers excellent global diversification for their forest portfolios.
The country has a robust and growing forest industry and its primary timber cultivation regions, including Tasmania, provide outstanding access to high-growth global markets. For all of these reasons, we expect to be active participants in the region's forest investment and ownership community in the years ahead."
500 billion trees by 2060 – using drones• UK company Dendra plans to plant 500 billion trees by 2060 – using AI and drones.
• The drones can plant 120 seedpods per minute.
• The WWF estimates we’re losing 27 football fields of forest every minute due to deforestation.
A drone can plant two trees per second, according to UK tech company Dendra, which is aiming to “re-green” the planet. Dendra estimates it would take just 400 teams of two drone operators, with 10 drones per team, to plant 10 billion trees each year – and at a much lower cost than the traditional method of planting by hand. The target is to plant 500 billion trees by 2060, in often hard-to-reach places.
Susan Graham, CEO of Dendra Systems, says, “The challenge that we’re tackling is a complex one and working with a team of passionate engineers, plant scientists, drone operators, we came up with this idea to use automation and digital intelligence to plant billions of trees.”
So, how does it work? First, the replanting areas are identified using a combination of satellite images and drone-collected data. Specialized planting drones take to the skies loaded with seedpods containing a germinated seed and nutrients.
Once in position, the drones use pressurized air to fire the seeds into the ground – at 120 pods per minute. The seedpods penetrate the earth and start to grow once activated by water. Dendra estimates its technology – combining speed and accuracy – would enable governments to restore forests 150 times faster than planting by hand, and up to 10 times cheaper. Graham says it represents a new "step-change" in how we think about global ecosystem restoration.
“We need to use technology to scale up our restoration efforts, and the scale we’re talking about is tens of billions of trees every year. We’ll be able to see the ecosystems that we’ve restored from space. “There’s a saying that goes that the best time to plant a tree was 20 years ago, and the second-best time is today,” says Graham. “We have this opportunity now, and we need to act today.”
Reforming New Zealand’s ETS: Proposed settingsThe NZ Government has announced it is consulting on proposals for New Zealand Emissions Trading Scheme (NZ ETS) settings, including unit supply and price controls, which will be set through regulations in mid-2020. This is intended to align the NZ ETS with New Zealand's emissions reduction targets. The consultation document and information about how to provide feedback on the Government's proposals are available on the Ministry for the Environment website.
The deadline for submissions is 28 February 2020 at 5pm.
Source: Ministry for the Environment
Sudden closure of NZ sawmillThis week’s sudden announcement of the closure of Pacific Pine Industries Ltd, a timber processing and sawmill in Putaruru, New Zealand has left its 60 plus employees reeling. Staff were called in from their annual leave on Monday to a meeting where they were informed that the company was entering voluntary administration. Locks were being changed at the site as the meeting was taking place, and not a day’s more work is available for the many long-serving employees at the sawmill, FIRST Union said today.
A FIRST Union Organiser attended the meeting where one worker, who wished to remain anonymous, said: "Our whole community will suffer without these jobs. One colleague has just bought a house, and no one here is in a position where we can go without our income. We have kids and families to take care of."
FIRST Union is calling on the government to meet with industry stakeholders to intervene and coordinate the supply industry, from forest to construction, to ensure that sawmills are able to survive and provide the wood that is needed in our country.
"This is becoming a pattern," said Robert Reid, FIRST Union President. "It was just November last year that Claymark went into receivership. It highly counterintuitive that, at a time where we have lots of wood and the need for an unprecedented number of homes, our sawmills are closing down."
FIRST Union are working with the receiver and the Ministry of Social Development to ensure that the workers are supported at this difficult time.
Europe expanding presence in Chinese log marketChina is increasing importation of logs from New Zealand and Europe, while diminishing imports from North America and Russia. As a region, Europe is now the second largest supplier of softwood logs to China behind New Zealand, reports the WRQ.
Europe has rapidly become a major supplier of softwood logs to China, while Russia and North America have lost market shares in 2019, reports the Wood Resource Quarterly. New Zealand continues to expand its market share in China, supplying 39% of the total import volume in the 3Q/19, up from 32% five years earlier. Russia and North America suffered the largest declines in the Chinese market share from 2015 to 2019, with Russia’s share falling from 28% to 12%, and North America from 21% to 13% during the same period.
In the 3Q/19, log imports from Russia were at their lowest levels in almost 20 years. The only other major change in the Chinese market over the past few years has been an increase in pine log shipments from Uruguay.
These have increased from just a few thousand cubic meters in 2016 to almost 2.5 million m3 last year, making Uruguay the fifth largest log supplier to China in 2018. Startlingly, shipments from Uruguay to China fell to less than 200,000 m3 in the 3Q/19, when prices for logs plummeted to the point where it no longer made financial sense for Uruguayan exporters to ship logs.
Interestingly, a number of countries in Europe, although some still small suppliers, have begun to expand their presence in the Chinese market over the past 12 months, reports the WRQ. This can be attributed to an oversupply of logs in their domestic markets. In the 3Q/19, the European supply of softwood logs totalled over two million m3.
Supplying countries included Germany, Czech, Poland and France (in descending order), all countries impacted by storms and insects in 2018 and 2019. The European share of imported softwood logs has increased from just three percent in the 3Q/18 to as much as 20% in the 3Q/19.
Source: Wood Resources International, www.WoodPrices.com
Primary processors working together creates efficiencyEstablishing wood processors close to forestry allows wood processing and forestry residues to be used as an energy source, with any surplus able to be used by other nearby industries. Other primary processing (such dairy and meat processing) could also benefit from this strategy, and there is potential for a shared energy plant to service multiple factories.
This strategy of clustering industries around an energy source and utilising production waste streams is called industrial symbiosis. Applied in regional New Zealand it could create jobs, increase GDP and reduce greenhouse gas emissions.
Researchers have mapped New Zealand’s forestry, energy resources and fossil energy-using industries to identify regions where clusters of wood processing operations could be co-located with meat and dairy processing, for example. Gisborne, Hawkes Bay, Northland and Southland/Clutha are well suited to industrial symbiosis. Each is forecast to have a long-term supply of surplus logs, forestry and other woody waste to contribute.
If each of these clusters were established, the increase in onshore processing would provide an additional ~1000 jobs in each region, add a total of NZ$2 billion to New Zealand’s bottom line and reduce carbon dioxide emissions by 67,000 tonnes a year by replacing fossil fuels with biomass.
Data produced by this project has now been supplied to the Ministry of Business, Innovation and Employment and the Energy Efficiency and Conservation Authority for their continued analysis. New opportunities for wood processing clusters in these regions were identified using the WoodScape model and predictions of future log availability to calculate the best return on capital investment.
Gisborne, Hawkes Bay, Northland and Southland/Clutha regions have unique future wood processing options and the flow on opportunities to co-locate with other industries differ between regions.
Industrial symbiosis in Gisborne would be focused on standalone wood-processing powered by forestry and processing residues. In Ngāwha, Northland, the availability of geothermal energy frees up residues for secondary manufacturing. In Hawkes Bay and Southland, residues from wood processing clusters could be used to replace coal or gas used by other nearby industries.
Further opportunities for full industrial symbiosis have been identified around the Marsden Point oil refinery and Golden Bay Cement/Portland Cement in Northland. There is also potential to fuel industrial heat with biomass in the central North Island, Blenheim, Tasman/Nelson, Hokitika, Greymouth and Canterbury.
The new wood processes with the highest return on capital investment include sawmills, Optimised Engineering Lumber (OEL™), plywood, oriented strand board, cross-laminated timber and remanufactured timber. Where geothermal heat is available the range of options expands and includes bio-chemical recovery and manufacture of solid biofuels from wood processing residues that might otherwise have been used to provide process or drying heat.
Wood Energy Industrial Symbiosis.
Sawmilling simulation training tool availableLike the harvesting simulator that is being used throughout Australasia for training and encouraging younger students to look at forestry as a future career option, a French company, Mimbus, has developed a sawmilling simulation tool. It appears training simulation tools can be offered for the headrig and canter machine centres.
As detailed on their website, being a sawmill operator requires a range of skills and expertise that’s hard to acquire without slowing down production, or risking damage to the equipment. To face this training issue, MIMBUS developed WOOD-ED FACTORY. Details of the company and training simulation tools can be found on the company’s website.
10,000 ha new planting through One Billion TreesFigures have been released by Te Uru Rakau (Forestry New Zealand) that show 228 grant applications were received for funding under the Government’s One Billion Trees Programme in 2019, a total of NZ$42.55 million being allocated across 42 projects.
Te Uru Rakau acting deputy director-general Sam Keenan said NZ$22.2 million of that had been approved across 10,758.4 hectares of new planting. "To date approximately 17,056,165 trees comprised of 9,785,067 native and 7,271,098 exotic trees have been funded."
Mr Keenan said a key aspect of many of the billion trees project was "reliable science", with NZ $499,321 of funding going to AUT’s Living Laboratories Project for research about integrating native canopy tree species such as rimu within agricultural landscapes. Another NZ $376,850 had gone to Manaaki Whenua — Landcare Research to build understanding about how New Zealanders perceive forestry.
Tane’s Tree Trust has received NZ $165,863 to devise ways of upscaling cost-effective planting and native forest reversion, while New Zealand Plant Producers Inc received NZ$100,000 to develop industry standards around the risk of spreading pests and pathogens through plant product systems.
A further NZ$39,500 was allocated to the New Zealand Nursery Practice Guidelines Project, which allows experienced nurserymen and scientists to share their expertise. One Billion Trees Programme grants and partnership funding of NZ$800,000 has also been allocated to the Waikato Regional Council to expand its riparian restoration project programme, which is working to improve the region’s water quality by integrating trees into farm settings.
The Tararua District Council received NZ$145,000 for its decision-support tool that gives landowners information about planting options on farms, and to strategically plan future forestry in the area. An additional NZ$95,000 went towards laying the foundations for Rotary’s 100 Forests of Peace and Remembrance Project.
Source: Te Uru Rakau
AUSTimber2020 rescheduled to NovemberAnother casualty of the recent bush fires in Australia is the four-yearly forestry show, AusTimber 2020 that was scheduled for early April. It’s now being postponed to later in the year. The response and recovery efforts to the bushfire crisis are significant and many people and businesses from our timber industry have been directly affected or are working tirelessly to support communities and regions across Australia.
The Australian Forest Contractor Association’s General Manager Stacey Gardiner said “the bushfire crisis will have a lasting impact on our industry and should be the focus over the coming months, as a result we have decided to reschedule AUSTimber2020 until November.”
Ms Gardiner added “AUSTimber is hosted in the central part of the Gippsland region and while we have been fortunate to remain safe, our concentrated support and thoughts continue to be with the communities and areas within our region and across Australia who have suffered loss and are continuing their bushfire fighting efforts.”
AUSTimber Site Manager, Mr Travis Healey said “Our focus is like many in our industry, we are sending our work crews and equipment where they are needed to support communities impacted by the devastating bushfires” Mr Healey, added “We were assisting the firefighting efforts in Queensland and now all of our crews are in north east and south west of Victoria.”
The decision to reschedule AUSTimber2020 required careful consideration of the impact on commitments already in place for the show, including to regional tourism businesses. However, ultimately the AFCA Board and the Planning Committee concluded that rescheduling would enable our timber industry to continue supporting bushfire response, recovery and salvage efforts in the coming months.
AUSTimber Coordinator, Ms Dionne Olsen said “AUSTimber is the largest timber industry show in the southern hemisphere and we have already commenced planning to facilitate a seamless transition to the future show in November.” Ms Olsen added “All tickets which have already been purchased will be honoured in November and the program remains unchanged for the new dates.”
“We also want to recognise and thank our supporters, exhibitors and partners for their positive and proactive response to the decision to reschedule the show” said Ms Olsen. Ms Olsen added “It is their commitment to the success of the show in November that means our communities will still have the opportunity to benefit from over 10,000 national and international attendees visiting Gippsland.”
Australian R&D on the world stageThe latest episode of the Forest and Wood Products Australia (FWPA) WoodChat podcast was launched in mid-December. It focuses on the exciting takeaways of FWPA and other Australian representatives who were amongst the 2,500 scientists from 92 countries at the International Union of Forest Research Organizations (IUFRO) World Congress.
Listeners will hear directly from attendees who travelled to Brazil for the congress in October. Conversations cover key themes including deforestation and climate change, as well as the willingness amongst attendees to collaborate on a global scale for the benefit of forests everywhere.
Hosts Sam and Georgia spoke to Jodie Mason, Forest Research Manager at FWPA, who was in attendance at this year’s congress, alongside many Australian researchers who presented details of their projects to delegates, many of which were co-funded by FWPA. “It was great to see our home-grown researchers networking in this way, promoting Australian projects, and updating themselves with international best practice. It was apparent that Australian researchers are well-regarded and well-networked in the global arena,” Ms Mason said.
Sharing some of her key takeaways from the event, Ms Mason noted that research on the impact and mitigation of climate risk was of high priority, both for supporting ecosystem function and commercial forestry. “The climate adaptation measures presented were assisted migration of natural forest species, and boosting the drought tolerance of plantation species through various measures,” she explained.
Continuing on the topic of the climate, Ms Mason said silvicultural practices to improve site conditions were another major area of focus. These included trials of stump removal to increase moisture retention, and tree spacing when it comes to planting. In addition, Ms Mason highlighted the soil microbiome as another interesting theme. This area of study looks at how complex microbial activity in soils interacts with tree roots, prompting the transfer of carbon and nutrients from soil to tree, and also between multiple trees.
“Research in this field has great potential applications for nurseries, plantations, natural forests and in laboratories where plantlets are grown, with increased productivity and healthier and more resilient forests being the ultimate goal.”
In the episode, the hosts also interview Professor Rodney Keenan, from the University of Melbourne’s school of Ecosystem and Forest Sciences, who attended the event for the seventh time. They discuss how the congress has evolved over the years, key insights on forest restoration and the need for sustainable intensification to meet future demand for timber.
Dr Angus Carnegie, Principal Research Scientist at the NSW Department of Primary Industries’ Science & Research Division, also discusses his presentation of research on the impact of myrtle rust in Australia, as well as new collaborations on invasive pest research with key international experts, which were made possible by his attendance at the congress.
Every four-to-five years, the IUFRO World Congress provides unique opportunities to share evidence-based knowledge across disciplines and continents, to discuss the state of the world’s forests, the challenges and consequences, as well as possible solutions.
You can listen to WoodChat on SoundCloud and Apple Podcasts
Ginseng, NZ’s next potential $1 billion export industryGinseng, New Zealand’s next potential $1 billion export industry has roots in ancient China and is especially suited to New Zealand commercial pine forest plantations. Attached, we’ve included a few details highlighting some of the potential that wild simulated ginseng has growing under our radiata pine forests.
• Ginseng is a Traditional Chinese Medicine, that promises a range of health benefits. It has been used for more than 5000 years.
• Wild ginseng grown in China and Korea attracts premium prices due to scarcity, a wild (knotted) appearance and high levels of active ingredients - ginsenosides.
• The global supply of wild ginseng has decreased as the plant nears extinction in the wild. It is chronically over-harvested and is prone to poaching.
• Farmed ginseng is grown in shade houses but is a visibly inferior product with little of the desired wild type characteristics and low concentrations of active ingredients.
• Simulated Wild Ginseng is grown under a forest canopy with little or no human input – it is almost identical to premium quality wild ginseng.
• Demand for ginseng is expected to increase in China as that country places greater emphasis on traditional Chinese medicines and the herb is classed as a food - traditionally, it has been classified as a medicine).
In New Zealand:
• KiwSeng’s ginseng grows at the same latitude south as wild ginseng grows in the Northern China and North Korea. Because KiwiSeng’s ginseng is grown naturally over 15 years with no chemical inputs and little human intervention, it can be classified as wild grown ginseng.
• New Zealand wild grown ginseng is grown under a forest canopy. Managed pine forests aged from 10 to 28 years of age proving to be an ideal environment.
• Asian ginseng (Panax ginseng) seeds from Mt Changbai China and North American ginseng grow extremely well under radiata pine forests in the Central North Island.
• Ginseng thrives in locations with cold winters, dry summers, volcanic soils and a forest canopy providing 80% shade. The NZ growing environment also has high UV index sunlight and clean water.
• Wild grown ginseng plants are typically harvested by hand at a minimum of 15 years or age.
• Whole roots must be carefully dug from the soil with extreme care taken not to damage any root tips.
• KiwiSeng is the largest producer of wild grown ginseng in New Zealand with 80% of the national production.
• The first plants were planted in the early 2000’s.
• Massey University research has shown the ginsenoside content of KiwiSeng’s Panax ginseng is 100% higher than the average of the same ginseng grown in China and Korea.
• KiwiSeng sells a range of products, including fresh ginseng whole roots, dried whole roots, capsules, liquid extracts, manuka honey and deer-infused products, alcoholic drinks as well as seeds and plants for other growers.
• Products are sold mainly in Hong Kong, New Zealand and Australia.
• KiwiSeng’s ginseng is certified organic for export to several countries.
• At a minimum of $2,000 per kg, wild-grown New Zealand ginseng is one of the most valuable crops that can be grown in New Zealand. Revenues over $400,000 per hectare are possible. Inputs are around $80,000 per hectare.
• High quality wild-grown ginseng (15+ years old) from New Zealand can fetch prices per kg many times higher and greater revenue per hectare.
• Revenue from ginseng growing in planted forest can be substantially higher than from the trees themselves.
• Wild-grown ginseng is very complementary to traditional forestry operations and can be grown after the tree crop is thinned and before tree harvest age.
• Forest landowners should at least consider ginseng as an understory crop in their forestry plantations. This becomes an extremely attractive option under carbon forestry.
See more at www.kiwiseng.nz
Review of Fire and Emergency New Zealand fundingThe Government is reviewing the way Fire and Emergency New Zealand (FENZ) is funded. This review is being carried out by the Department of Internal Affairs, and the consultation document is currently available in the link below.
The current funding system uses an insurance-based approach, that being a levy charged on the value of the land/property. DIA is currently assessing options to instead levy this on (1) the value of property, or (2) the value of property and use. As a result, this may result in added costs for forest owners.
Submissions close 5 February 2020.
Source: Forest Owners Association
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... and one to end the week on ... Dad at the mall
Now this is one I can relate to.
And on that note, enjoy your weekend. Cheers.
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