Forestry in Wairarapa_Sept

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Thursday, September 22, 2022 Wairarapa Times-Age

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www.age.co.nz Thursday, September 22, 2022

FORESTRY IN WAIRARAPA Forestry Transformation Plan could be ‘game changer’ for New Zealand economy and for combating climate change The Industry Transformation Plan (ITP) was launched in Christchurch last month by the Forestry Minister Stuart Nash and is open for consultation by MPI currently. This has the potential to provide a di˜ erent vision for forestry in New Zealand and can drive change at a local level with forests and wood processing.

Products and markets Goals for transformation in the forestry & wood processing sector

Carbon emissions reduce

The goals in this plan are interconnected and linked to our vision for a transformed sector that generates more value for New Zealand, is a key pillar of our regional communities, and underpins New Zealand’s low-emissions economy.

TONNES BY 2030TONNES BY 2050

54M

Planting of alternative species Improve resilience, expand range of manufactured products, and enhance wider environmental beneÿ ts.

20%

of planting are alternative tree species by 2030

Value of imported wood products

Value of exported wood products

New Zealand imports some wood products to supplement those produced locally, to support a range of specialty needs and industries.

Forestry and Wood Processing is New Zealand’s 4TH largest export earner.

Manufactured wood products INCREASE WOODY BIOMASS supply increased woody biomass recovered from forest ˛ oor and harvesting residues, bio energy managed forests and pulp logs.

Domestic wood processing

CARBON SEQUESTRATION Production forests sequester carbon and produce long lived wood products.

Signiÿ cant scaling up of capacity.

Additional

THE VISION:

Increase capacity of sawmills by 2030.

3.5M m3 of wood processed per year

KEEP MORE LOGS FOR PROCESSING IN NEW ZEALAND 60% of our logs are currently exported. With industry transformation, more logs will be kept in New Zealand for onshore processing.

THE SOUTHERN NORTH ISLAND WOOD COUNCIL SCHOLARSHIP OF $8000 IS NOW ACCEPTING APPLICATIONS

$1.5B

25%

The forestry and wood processing sector generates more value for New Zealand, is a key pillar of our regional communities, and underpins New Zealand’s low-emissions economy.

6.9M

Forestry is a vital tool to combat climate change through materials substitution and the ITP sets out ambitious targets for exporting more ÿ nished wooden products, increased wood construction in New Zealand and a huge transformation from oil and coal fuels, and materials, to instead using wood-based sources.

Most of New Zealand’s imported wood products are manufactured for use in the home.

ANYONE CAN APPLY. ARE YOU:

$3.9B

• Enrolling in full time forestry tertiary study - or

Logs

• Planning on enrolling for 2023?

New Zealand currently exports over 60% of harvested wood as unprocessed logs (22M m3)

• An employee within the industry who aspires to further training; to improve their skills, knowledge and value to the employer

$2.8B

Wood products Value-added wood products provide signiÿ cant export earnings for New Zealand.

Use of wood in NZ’s construction sector

Wood is increasingly used as construction material – replacing concrete and steel (e.g., multi-storey buildings, mainframes, and roof structures).

23%

Forecast increase in wood for construction

For more information visit https://growmeforestry.co.nz/#scholarships or contact Erica Kinder E sniwoodcouncil@gmail.com P 027 329 0498 0273 290 498

sniwoodcouncil@gmail.com growmeforestry.co.nz

/www.sniwoodcouncil.co.nz

APPLICATIONS CLOSE OCTOBER 2022

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Thursday, September 22, 2022 Wairarapa Times-Age

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www.age.co.nz Thursday, September 22, 2022

FORESTRY IN WAIRARAPA People working in the sector The sector has increased the number of jobs between 2012 and 2019, providing employment to over 40 thousand people.

Log Market Update -

Light is shining bright for log exports Marcus Musson. Director Forest360

Last month I made the comment that there was some light at the end of the tunnel in terms of increased export log prices and that light started shining very brightly and the tunnel got much shorter in September as export prices rose around $NZ10/m3 across the board.

Total people working in the sector

40,835

6.8% increase (2012–19) People working in wood processing/commercialisation

79%

32,260 people

The lift in export prices has absolutely zero to do with increased demand in China, it is purely a re˜ ection of reduced shipping costs and foreign exchange. There has been a push

by some exporters to increase the CFR (sales price in China in $US) price up for September deliveries but this has been met with a ÿ rm and resounding ‘are you serious?’ by the market. And to be fair there isn’t much basis for a price lift as in-market log inventories are only marginally down on August and demand has ˜ atlined.

NZ has just come out of the wettest winter with the highest fuel prices in memory and log prices that are well below the

three-year average resulting in a reasonable drop in log supply.

We were hoping that this would result in a sharp reduction in Chinese log inventories and trigger an increase in demand and hence price, but it looks like those hopes are ˜ ushed well past the S bend now.

The outlook for the Chinese construction sector is about as rosy as Rotorua’s motel strip with house sales down around 30% on this time last year and stalled projects country

People working in forestry

21%

8,575 people

8.1% increase (2012–19) Our forest sector already directly employs more than 40,000 people in New Zealand with this number increasing as new technology and markets for our wood products become available. As forests continue to grow in our regions, more jobs and sectors servicing forestry spring up.

$180 $160 $140 $120 $100 $80 $60

Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22

2.4% increase (2012–19)

A Grade sales price $NZ/JAS AWG

Export A Grade At Wharf Gate Price ($NZ/JAS)

McCarthy Transport provide innovative distribution solutions to New Zealand's forestry industry.

For over 70 years we have proudly supported our community and provided the very best of service to our valuable clients.

Our people and customers are number one.

06 370 0085 Masterton@mccarthytransport.co.nz www.mccarthytransport.co.nz

Period

wide. There’s much talk of government stimulus to boost the construction sector but this is likely going to be in the form of assistance to complete half built projects rather than start new ones.

What this does highlight is our dependency on exports, primarily to China, in supporting our industry at the current level of production. Exports are a very important part of our supply chain as our available harvest level is well beyond our domestic processing capacity, by a number of magnitudes, and the lower grade logs that are exported are not economically viable to be processed in NZ – yet.

The word ‘Bioeconomy’ sounds very ˜ ash and is becoming the new buzzword in the industry – for good reason. The increase in technology and the drive to utilize harvesting residues has seen a large increase in the conversion of coal and gas ÿ red industrial boilers to wood ÿ bre. The problem we have is that there are not enough harvest residues available to feed the demand for fuel ÿ bre

nationwide. This is where export logs come into play as, with the cost of coal and gas skyrocketing due to increased carbon o˛ set costs, the viability to throw the lower grade (and value) export logs down the chipper is becoming more likely which will directly reduce our export log dependency and supply.

Now that summer is around the corner and the export prices are on the rise, there will be an inevitable increase in NZ log supply. The Chinese construction season isn’t at all likely to kicko˛ which will probably see Chinese log inventories increase and the lift in export prices over faster than David Parkers GST increase on Kiwisaver fees. It’s unlikely that shipping rates will increase as most global commodities are slowing, the $NZ:$US exchange rate has more downward than upward pressure but most signiÿ cant component is the downward pressure on the CFR price from supply increases.

John Sexton retires as Forest Enterprises’ Board Chair Local Independent Director, John Sexton has retired as Board Chair of Mastertonbased forestry investment manager, Forest Enterprises Limited.

John joined the company’s Board of Directors in 2008.

“I want to acknowledge John’s signiÿ cant contribution to the governance of the company during his 14-year tenure”, says Graeme Tindall, Forest Enterprises’ Managed Investments Director.

“The owners are grateful to John for his wisdom and guidance”, adds Graeme. The continuity he has provided during recent shareholder changes has also been really appreciated.”

Forest Enterprises celebrated its 50th anniversary in May. The company remains locally owned and operated, by six of its senior managers; ÿ ve are based in the Wairarapa and another in Gisborne.

Forest Enterprises has appointed Yogesh Mody as the new Independent Director from 1 September.

“Yogesh brings an exceptional background in ÿ nancial markets regulation, managed funds, risk management and business development”, says Graeme.

Forest Enterprises has a long association with Yogesh dating back 30 years. Yogesh was a senior executive until 2015 at Trustees Executors

Limited, the Supervisor for Forest Enterprises’ investments.

“I’d like to congratulate Yogesh on his appointment,’ says John.

“I have enjoyed my association with Forest Enterprises.

Forestry is a relevant and rewarding investment. I am pleased Forest Enterprises has continued to make forestry accessible to investors and wish them the best for the future.”

Graeme, who celebrated 25 years with Forest Enterprises this year, takes over the role of Board Chair from 1 September.

The Southern North Island Wood Council provides a collective voice for the forestry sector in Taranaki, Whanganui, Manawatu, Wairarapa, Tararua and Wellington. Members have a common interest in ensuring the long-term success of the sector. Membership is open to any company or individual with an interest in the local wood industry.

Erica Kinder, SNI Wood Council CEO, can be contacted for more information. sniwoodcouncil@gmail.com

0273 290 498

sniwoodcouncil.co.nz/

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