NZFFA Member Blogs
Tenco is one of New Zealand’s largest exporters of forest products. We have built to this position since 1991 when the company was set up to export lumber to growing Asian export markets. Experience and reputation count; from small beginnings Tenco has become the largest independent exporter of New Zealand lumber and New Zealand’s 4th largest log exporter. Tenco has a regular shipping program of their own log vessels and in combination with these and other ships currently calls at 7 New Zealand ports (5 North Island and 2 South Island).
Tenco buys standing forests. Tenco regularly buys smaller tracts of forest to harvest immediately or immature forests to hold until harvest time. A deal with Tenco is a certain transaction. The owner and Tenco will agree on a value of the tree crop and then Tenco will pay this amount to the owner either in a lump sum amount or on rate per volume unit out-turn from the forest depending on the nature of the tree crop.
Tenco is actively interested in buying harvestable forests or trees from areas including all the North Island (except the Gisborne and East Coast districts) and Nelson & Marlborough in the South Island .
If you own a forest in this area (16 years and older) and are ready to enter into this kind of agreement Tenco is interested to develop something with you.
Please contact: Josh.Bannan@tenco.co.nz
Work: +64 7 357 5356 Mobile: +64 21 921 595 www.tenco.co.nz
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Sunday, March 28, 2021
I was shaken at the Conference by Simon Upton, who suggested that both the He Waka Eke Noa team and the CCC were thinking about having a levy on agricultural emissions that could be offset with planting trees on farms. A levy? That suggests an agricultural carbon tax independent of the ETS, allowing totally different rigour in terms of measurement, compliance, penalties and rewards. He further suggested that carbon forestry was bad, and in order to rein it in the Government might consider controlling the number of NZUs a grower could claim for each tonne of carbon stored. He offered four possible mechanisms for doing this, including (for example) one NZU per two tonnes sequestered. Good grief.
What Simon was suggesting was, in effect, different emissions treatments for different sectors. Exploring that thought, I suggest there is nothing in the ETS that we (small forest owners) can rely on: it might be fluid and subject to policies that will be adjusted as other sectors do or don’t perform to expectations. If Simon is right and the Government adopts fluid policy adjustment, there is no promise of a level playing field, equity across sectors or regulatory fairness.
What he said threw the ideas I had drafted in the CCC submission totally into disarray, as I had assumed (against gnawing doubts) that equity and fairness would be fundamental. If they’re not, anything goes. The loudest or most serious voice will get the most attention and the rest will have to suck it up, as in the Covid-19 lockdown when public health officials shut down the tourism industry. We all agreed what they did was right, but there was no equity or fairness involved.
There seem to be three possibilities. The first is, we can sit back and hope that what Simon says is nonsense.
The second is, if we don’t want to ‘suck it up’ as a result of someone else’s priorities, we might put aside equity and fairness and become the loudest voice in climate change response. I don’t know how to achieve that, but I think that to get any traction at all we’d need to unify; make sure the FOA shared this understanding and vision and were prepared to lead; gather up any other sectors who supported us; and then find those arguments that most appealed to (or least offended) Beef+Lamb and Federated Farmers, to start to make change without raising an even louder voice against us.
The third possibility is that I’m just paranoid.
An eight Bullet Point summary of why the "Jones formula" to make NZ sawmilling great again is doomed to failureDennis Neilson's blog
Wednesday, June 03, 2020
Some reasons why Minister Jones’ attempt to re-direct some or all of the ~20 million cubic metres per year of export logs to domestic sawmills to process more sawn timber and create more jobs -- is doomed to failure
- Only three sawmills of 60 in NZ (Red Stag Rotorua, CHH Kawerau and CHH Nelson), working even part-weeks, can over-supply the entire NZ market for sawn timber. This over-supply will get worse (a lot worse), as annual NZ housing starts reduce from 37,000 in 2019 to between 11,000 and 20/25,000 in the next 12 months (BNZ prediction). One other very experienced observer said today, “NZ sawn timber demand will likely halve over the next 3 years compared to 2019.” And last night it was predicted that Australian housing starts will fall from 160,000 to 110,000 per year
Other (smaller) mills producing for the NZ market only make the oversupply worse. And, once a huge expansion to one of these three sawmills mills (CHH Kawerau) is complete the oversupply situation will get even worse.
- NZ sawmills cannot export structural housing timber to Australia, as almost no NZ pine timber can meet Australian building timber stiffness standards ( MGP10 & MGP - e.g. MGP10 indicates a minimum threshold for stiffness properties of 10,000 MPa). So 70% of total Australian wood demand is out of bounds to NZ exports. As a result of changes to the Standards and European competition, NZ sawn timber exports to Australia have fallen by 75% from 2000 to 2018.
- In the last 10 years while governments in Russia, Europe and latin America have subsided the building of dozens of huge new sawmills and other mills costing $10s of billions, the undercapitalised and non-subsidised NZ sawmilling sector has languished. While being in the top quartile of global scale and efficiency in the 1980s, it has “fallen off the cliff” to be in the bottom quartile globally (with two of 60 mill as exceptions). European sawn timber shipments to Australia have increased by more than 500% from 2000 to 2018 - the biggest single “nut-crusher” of the NZ timber export industry. All this Pinus sylvestris (Scots pine) and Picea abies (Norway spruce) timber meets Australian Standards.
- NZ sawmills have not been able to find a single cubic metre of extra export sawn timber market volume in the last 18 years - in fact it has found less from 2002 (1.835 million m3) to 2019 (1.821 million m3).
And it is only going to get a whole lot harder in the face of recent huge increases in global sawmilling capacity**, and into a massively over-supplied global sawn timber markets.
** Extra new annual sawmilling timber capacity being built in Central Europe alone between 2020 and 2022 will be as much as the total NZ timber export volume. Ditto in Russia (and much more). Ditto recently/now/soon in the US South -- so much that two huge new sawmills (Klausner in NC and FL) have just gone bankrupt.
FOR THE ABSENCE OF DOUBT: For every 1.0 cubic metres of new export timber market the NZ sawmilling sector has found since 2002, it has lost another 1.01 cubic metres.
- A plethora of inefficient, high cost, over-manned, low technology mills, made worse by the incompetence of many NZ sawmill owners, managers and advisors have resulted in the failure of 55 sawmills in the last 16 years. The details can be seen here
Chinese sawmills are 15-20% more efficient than NZ sawmills by conversion from log to timber (which equates to twice the profitability than NZ sawmills); and up to five times better by conversion from log to plywood.
- For the NZ sawmilling industry to be internationally competitive, the 60 existing mills must be replaced with <10 big new automated ones, with a loss of at least 75% of existing sawmill jobs.
- NZ mills cannot increase exports of plywood or Laminated Veneer Lumber (LVL) against vicious and increasing competition from Chile, Russia and Europe. NZ exports of plywood and LVL have fallen by 70% in from 2005 to 2018 -- which forced the closure of one plywood/LVL mill in 2018 (Juken in Gisborne) and soon 70% of one LVL mill in 2020 (CHH Whangarei).
- The Minister talks about the new “wonder product” of Cross Laminated Timber (CLT). But CLT is already over-supplied in Australasia, which caused the closure of NZs only CLT mill (Nelson) in 2018.
Once the new Red Stag CLT mill is commissioned in 2021 (see below), with more new mills in Australia (and the massive expansion of CLT capacity in Europe -- by 20 times Australasia’s demand), the NZ + Australia oversupply will be savage, chronic and permanent. Trans-Tasman CLT production capacity alone in 2022 will be 3 to 7 times demand (see chart below).
Any new entrant in NZ making CLT would be instantly crushed by the competition. See below DN estimate of 3 June 2020.
Ask the NZ Wood Processing and Manufacturing Association (NZ WPMA) -- and/or any advisors/specialists/experts at MPI or Scion to analytically unravel any/all the above with their own version of “facts”. I hope they can. I sincerely hope they can.
Disclaimer: Personal views expressed in this blog are those of the writers and do not necessarily represent those of the NZ Farm Forestry Association.