Sumitomo Forestry NZ, the local unit of the Japanese timber conglomerate, posted a record profit last year after buying the timber plantations of US forestry investor Hancock in 2016 to secure more supply for its wood processing plant
A new forestry service was launched in Rotorua on Friday, honouring a coalition commitment between New Zealand First and Labour to support regional development. Forestry Minister Shane Jones said the launch of Te Uru Rakau was the first step in re-establishing a forestry service in New Zealand.
"This Government has been clear about its commitment to New Zealand’s forestry sector and the One Billion Trees planting programme.
Apr 05, 2018 - Te Hiku Iwi opposes bringing forestry rights into the Overseas Investment screening regime, arguing they will have a material impact on the value of their land and compromise their ability to attract overseas partners
Mar 07, 2018 - The government is adding forestry rights to the Overseas Investment Act screening regime ahead of this week's signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in Chile, preserving its right to legislate on the issue
Feb 12, 2018 - Forestry and wood processing company, Juken New Zealand has today confirmed it is going ahead with changes to the products made at its East Coast Mill in Gisborne to return the plant to profitability and secure its long-term future.
The company told staff on January 23 that it was considering stopping production of Plywood and Laminated Veneer Lumber (LVL) products and reducing the manufacture of Structural Laminated Veneer Lumber (SLVL) at its East Coast Mill because those parts of the business had been operating at significant losses for a number of years. The Mill will continue to make high-value solid wood products used for high-end residential and commercial interior cabinetry, furniture, solid doors and feature walls and, overtime, this side of the business will expand.
Juken General Manager, Dave Hilliard said that the final number of roles to go at the Mill as a result of the changes wouldn’t be known for another two weeks. “Now that we have made the decision to go ahead with these changes, we will be working through a process to confirm exactly which roles and how many will go as result,” said Hilliard.
“This is a tough time for our people and their families. We’re a major wood-processing and forestry employer in Gisborne so a decision like this that cuts local jobs is difficult. But for local companies like us, it’s even more critical for the future of our communities that we consolidate into a sustainable business. We can only do this by making high-value products where we have a competitive advantage, so that we can keep growing job opportunities here into the future.”
“There are around 100 roles impacted by the changes, but we anticipate that the final number of redundancies will be less than this, as a number of staff have applied to take voluntary severance and we also have some roles in our sawmilling side of the business that we’ll look to redeploy people into.”
“All staff have redundancy pay provisions in their contracts. Part of the extra assistance we’ll be putting in place is to give a minimum of six weeks pay and four weeks notice for those who have been here for less than a year.”
The company has spent the past two weeks consulting staff and Unions about the changes, which follow a decline in demand from Japan, the mills’ main Plywood market. The company’s Plywood is also increasingly unable to compete in the domestic and international markets against product out of large-scale wood processing plants from the likes of China and South America.
Dave Hilliard said the consultation sought alternative proposals to mothballing the Plywood production line and reducing the production of SLVL (veneer) products.
“We’ve carefully considered the feedback received, including a suggestion to start producing plywood for ‘affordable housing’ in New Zealand. However, given the age of the machinery and the investment required to upgrade it to produce different plywood products these proposals don’t give us a viable solution to the issues we’re facing. The proposal asked for the decision to be delayed. However, we can’t continue sustaining these losses. Delaying the decision does not change the fact that the machinery cannot economically make product suitable for the low-cost housing market.”
“We have started work onsite with staff, unions, WINZ, Ministry for Social Development, local MPs, iwi, community and business representatives to support our people through this difficult process and to make sure they are supported into new jobs or re-training if their roles go. We are also working with a number of local employers, including Far East Sawmills who have come forward to offer our people new jobs.”
We’d like to thank them all for their hard work and support. We are also engaging with the Government on how we are investing to get the most value for the local industry out of our forestry resource through the manufacture of high-value products and how we are adapting to keep local processing and manufacturing competitive in the international market place.
The Juken mill at Matawhero opened in 1994 and employs around 200 full time employees. The mill processes Radiata Pine from the company’s East Coast forests to produce a range of solid wood and engineered wood products like Plywood, LVL (Laminated Veneer Lumber) and SLVL (Structural Laminated Veneer lumber), mainly for the Japanese housing market.
DEc 13, 2017 - Forestry Minister Shane Jones has today welcomed the separation of portfolios within the Ministry of Primary Industries, saying it marks a new era for forestry in New Zealand. The Ministry for Primary Industries (MPI) will reorganise its functions to create a stronger focus on core responsibilities.
Four new, separately branded portfolio-based branches will be established within MPI – Fisheries New Zealand, Forestry New Zealand, Biosecurity New Zealand and New Zealand Food Safety.
Mr Jones says the refocusing of the ministry’s functions will put greater emphasis on forestry, in line with the Government’s dedication to the sector.
“This Government has made a commitment to focus on regional economic development and the planting of 1 billion trees to support and grow a sustainable forestry sector,” Mr Jones says.
“The planting programme will also increase employment opportunities in the regions and help meet our climate change targets,” Mr Jones says.
“New Zealand Forestry will have leading role in meeting our 1 billion tree commitment, as well as in training people, finding land for afforestation and working closely with the sector.
“We have a highly motivated forestry sector in New Zealand and I’m looking forward to seeing what we can achieve in partnership over the coming years,” Mr Jones says.
Nov 29, 2017 - Forestry Minister Shane Jones says overseas investment in forestry that brings genuine benefits to New Zealand’s economy and its environment will be welcomed by the Government.
Mr Jones says he is pleased with the inclusion of a Forestry Directive in the new Ministerial Directive Letter issued to the Overseas Investment Office, which sets out the Government’s policy approach to overseas investment in sensitive New Zealand assets.
“The inclusion of a specific directive for forestry recognises the importance of forestry to the New Zealand economy and regional communities,” Mr Jones says.
“As part of the coalition agreement, this Government has committed to an ambitious tree planting programme that will require a partnership between the Crown and the sector itself. High-quality overseas investment can certainly help us achieve this goal.
“Forestry, and the processing of forest products, are significant sources of employment in our regions and we want to build on that to get more people into a sustainable workforce.
“I’ve heard first-hand from the industry the value of good overseas investment and the Forestry Directive recognises there is a role for overseas investors to play. However, we want to encourage value-added wood processing to generate jobs and other benefits for our regions.
“The new directive for forestry directs the Overseas Investment Office to place high importance on increased processing of primary products and the advancement of the Government’s policies when assessing applications for consent.
“It also emphasises that Ministers expect the Overseas Investment Office to impose conditions on consent where appropriate – for example, a requirement for the overseas investor to enter into a supply arrangement with a local processor,” Mr Jones says.
The letter recognises that conditions imposed on forest land may need to be for longer periods given the often long-term nature of these investments.
“Forestry has an important role to play in many of the Government’s priority areas – enhancing regional development, improving water quality, reducing carbon emissions and creating jobs – and I’m looking forward to seeing the sector prosper in the coming years,” Mr Jones says.
Nov 24, 2017 - New Zealand structural log prices rose to the highest level in 24 years and A-grade export logs hit a record as local mills compete with the export market to secure supply for the domestic construction market amid strong demand from China.
The price for structural S1 logs increased to $130 a tonne this month, from $128 a tonne last month, marking the highest level since 1993, according to AgriHQ's monthly survey of exporters, forest owners and saw millers. Export log prices lifted between $2-to-$5 a tonne for the majority of grades, with the price for A-Grade logs touching $128 a tonne, up from $127 a tonne last month and the highest level since AgriHQ began collecting the data in 2008.
New Zealand is experiencing strong demand for its logs from China, which has clamped down on the harvesting of its own forests and reduced tariffs on imported logs to meet demand in its local market. AgriHQ said Chinese demand for softwood logs remains strong, lifting back to record levels in the latest data for September with Chinese imports of New Zealand logs currently tracking 10 percent ahead of last year.
"Those trading in the domestic log market are continuing to receiver near-record returns and there's nothing to signal that this situation will change anytime soon," said AgriHQ analyst Reece Brick. "Looking forward, all prospects will be determined by the direction the export log market takes."
Brick said wharf gate values climbed through October and early November and will likely hold high until the Chinese New Year period. Also known as the 'spring festival', the Chinese New Year falls on Feb. 16 next year, and the festival will last until March 2, about 15 days in total. As an official public holiday, Chinese people can get seven days' absence from work, from Feb. 15 to 21.
"Beyond that point, it's still a wait-and-see situation," Brick said.
He noted the latest situation and outlook report released by the Ministry of Primary Industries continues to shed a positive light on forestry's prospects over the next two years.
"They predict strong Chinese interest in logs over the short-medium term, underpinned by its ban of commercial logging of natural forests, falling Russian log supplies, and a 2 percent reduction on its imported log tax."
Brick said "the only proper negative" when it comes to the export market is shipping rates, which are rising faster than log values. However, this was being masked by a weaker New Zealand dollar, he said.
"There is still a level of uncertainty as to whether shipping rates have reached their peak or have a little more upswing to come," Brick said.
Still, he said "in terms of market fundamentals it is all still quite positive."