All posts by Jo English

Setra

Setra reports 3Q operating profit of SEK 54 million ($6 million)

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Wood products company Setra is reporting an operating profit of SEK 287 million ($31.9 million) for the period January–September 2018. Net sales totalled SEK 3,325 million ($369.4 million). Operating profit for the 3Q amounted to SEK 54 million ($6 million), with net sales of SEK 966 million ($107.3 million).

“We’re reporting an operating profit for the first three quarters of SEK 287 million ($31.9 million), which is an improvement of SEK 180 million ($20 million) on the previous year. USA and Europe have been extremely strong markets.

The building trade in Sweden has been subdued because of the hot summer, although industrial construction remains strong. We have seen some uncertainty in some markets during the third quarter, with the Chinese market in particular afflicted by a drop in deliveries and falling prices. This is seen as a temporary setback, however, as consumption is fundamentally strong. Deliveries to Egypt have also fallen, primarily due to a shortage of USD. However, other markets have been able to compensate,” explains Hannele Arvonen, President and CEO at Setra.

Cash flow from operating activities for the period January–September amounted to SEK 318 million ($35.3 million). The Group’s financial position is strong. The Group’s financial net debt amounted to SEK -120 million ($13.3 million) at the end of the period, which corresponds to a net debt/equity ratio of -8%.

Setra is one of Sweden’s largest wood products companies.

Photo: Hannele Arvonen, President and CEO at Setra.

solutions

John Deere: New technology solutions at your fingertips

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John Deere’s Forestry Division has released new streamlined software solutions for loggers designed to enhance machine connectivity and communication. Available for John Deere wheeled-cut-to-length equipment, the revolutionary TimberMatic Maps and TimberManager software is another way John Deere is continuing to help customers optimize machines, increasing productivity.
“Understanding that our customers need access to real-time data to help increase production and accurately manage their business, we developed a streamlined, integrated solution: TimberMatic Maps for operations on-board the machines and TimberManager as an Off-Board, management solution,” said Matt Flood ForestSight product manager, John Deere. “In today’s challenging applications and environments, loggers need the right tools to maximize their visibility to machines, jobsites and their businesses to increase profitability.”

The TimberMatic Maps system is used in G-Series Harvesters and Forwarders, utilizing a mobile network to share real-time production information between harvester and the forwarder, as well back to managers in the office. Managers can access the data using TimberManager, a web-based solution for a PC, tablet or mobile phone, allowing loggers to follow progress of the work site. Combined, the software provides complete visibility to the operation from land harvested to the machines at work, streamlining communication and increasing efficiency when shift planning.

The data shared is collected by the sensors on the harvester, while the location of the production is collected through the GPS technology. Information is automatically transmitted to the TimberMatic Maps and TimberManager systems, providing real- time updates to operators and managers both on and off the jobsite.

One of the key benefits of TimberMatic Maps and TimberManager is the ability to plan work that needs to get done in a day. The map provides the precise location, volume and species of timber with the network of logging routes, allowing operators to efficiently work. As timber is transported, the operator can mark the map to indicate it has occurred, providing an exact volume count of the timber taken to the storage area. This helps the manager track the volume of timber at the storage area, simplifying planning for trailer transports and the onward transportation of timber.

Additionally, the map allows all operators to add markings, pointing out other challenging terrain factors such as an area with soft ground, making it easier to plan routes. The real-time updates provide on demand visibility to the entire crew.

To learn more about the John Deere #TimberManager and #TimberMatic Maps software solution, please visit www.JohnDeere.com.

 

plantation harvests

China: Wood products trade update

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China’s first half 2018 wood products trade

Data from China Customs shows that in the first half of 2018 the value of China’s wood products trade totalled US$80.97 billion, up 9% from the same period of 2017 but this was a slower growth than in the first half of 2017.

Of the total, the value of exports in the first half rose 6% to US$39.1 billion. China’s traders accelerated their wood product exports to beat the introduction of tariffs by the US.

The value of imports of wood products rose 13% to US$41.9 billion in the first half of 2017, down 9% year on year. Overall the pace of China’s wood products imports was slower in the first half of 2018.

China: Main Wood Product Imports

Logs: In the first half of 2018 the volume of China’s log imports totalled 30.32 million cubic metres valued at US$5.8 billion, a year on year increase of 17% and 28% respectively.

Sawnwood: In the first half of 2018 the volume of China’s sawnwood imports totalled 18.15 million cubic metres valued at US$5.2 billion, a year on year increase of 0.1% and 9% respectively.

Wood pulp: In the first half of 2018 the volume of China’s wood pulp imports totalled 12.35 million tonnes valued at US$9.8 billion, a year on year increase of 2% and 33% respectively.

Source: ITTO TTM Report

Global timber

Global timber and wood products market update

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GLobal Timber – Exports of softwood lumber from Russia, Germany and the Nordic countries have increased due to high demand for wood in Asia and Europe in early 2018, while Canadian exports fell to the lowest levels in five years, reports the Wood Resource Quarterly.

Global Softwood Lumber Trade
Worldwide trade of lumber inched up again in early 2018, hinting that this may be another record year. Six of the ten largest lumber-exporting countries in the world have increased their shipments in 2018, with exports from Russia, Germany, Ukraine and Austria increasing the most year-over-year.

The biggest decline in exports y-o-y has been from Canada, with shipments in 2018 on pace to be the lowest in five years. Canadian shipments to China and the US during the 1H/18 were down 19% and 6% respectively, as compared to the same period in 2017.

Lumber markets – North America
Lumber prices in the US have been on a roller coaster ride the past year, with sharp increases during the 2H/17 and early 2018 followed by plunging prices during the summer months of 2018. The dramatic price fluctuations are mostly a reflection of changes in the strength of the US housing market.

US lumber production was up 5.5% in the first four months of 2018 as compared to the same period in 2017. The biggest increase came in the US West (+10%), while the rise in the US South was more modest (+2.1%). Canadian lumber production was down 1.2% for the first four months, with British Columbia’s sawmills running 4.3% below last year’s production levels.

Lumber markets – Northern Europe
From 2016 to 2017, lumber exports from Finland increased 8.7%. However, export volumes were 3.5% lower in the first four months of 2018 than in the same period in 2017. So far this year, Saudi Arabia (-49%), China (-25%) and the United Kingdom (-6.7%) have seen the biggest declines in volumes shipped.

The annual export volume of softwood lumber from Sweden in 2017 was 13 million m3, practically unchanged from 2016, and the pattern held true in early 2018 (year-over-year). The biggest changes in exports from 2017 and 2018 have been declines in shipments to Egypt and Japan and increased exports to European customers.

Lumber markets – China
Russia supplied China with record volumes of softwood lumber in the 2Q/18, while imports from the US and Europe were down from the 1Q/18. Lumber producers in Siberia and Russia Far East have continuously increased their market share of total lumber imports to China over the past few years, increasing from about 36% in 2011 to 56% in 2018. The rise in shipments of softwood lumber from Russia to China in the past seven years has come at the expense of log exports. Import prices for lumber plateaued in the 2Q/18 after steadily increasing since early 2016.

Lumber market – Japan
Softwood lumber import volumes to Japan were up 6.7% q-o-q, reaching almost 1.6 million m3 in the 2Q/18. This was the second highest quarterly import volume in four years. During the 1H/18 there have been only minor changes in the sourcing of lumber. Prices (in Yen terms) for both domestic and imported softwood lumber have remained practically unchanged in Japan in 2018, but with the weakening domestic currency, costs for lumber in US dollar terms have fallen.

This is a brief excerpt from the newly released market report Wood Resource Quarterly. To read the full 56-page quarterly report, please visit www.WoodPrices.com to initiate an annual subscription. 

Climate

Poland pushing forest agenda as climate host

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Poland will ask all nations to agree on forests’ central role in the fight to curb climate change when they host UN talks later this year, a leaked document has revealed.
In a draft statement intended to be adopted by all governments at this year’s major climate conference, host country Poland emphasised the “essential role of carbon sinks in mitigating climate change” and called on states to ensure “that global forest carbon stocks are maintained and further enhanced by 2050”.

The draft has been circulated to governments ahead of the meeting in Katowice in December. It calls on scientists from the UN climate science panel to “explore and quantify” the role of forests in storing carbon in “achieving a balance” with greenhouse gas pollution.

The declaration ends with the statement: “Finally [we] affirm that there is no future without tackling climate change, but there is no future without forests either.” Scientists and NGOs interviewed by Climate Home News welcomed the declaration, but warned against using forests as a get-out-of-jail-free card for continued pollution.

“I could only support bringing forests in the picture,” director of the Birmingham Institute of Forest Research Michael Tausz said. “However, in the context of COP24, managing forests to take up CO2 does not release [governments] from the duty of curbing emissions, particularly from land-use change, of course.”

In particular, environmentalists are nervous Poland will focus on offsetting carbon emissions through forests, rather than curbing its polluting coal sector. In 2015, nearly 81% of the country’s electricity came from coal.

“Yes the climate is important and forests are important – but to tackle climate change we both need to keep trees standing and reduce fossil-fuel emissions,” said Hannah Mowat, a campaigner specialising in the relationship between climate change and forests from the Dutch NGO Fern.

Poland has some of the largest forest expanses in Europe and has lobbied the EU to give greater prominence to forest carbon in its climate policies. But the country was recently found to have violated EU law by logging the Unesco-protected Białowieża forest.

In 2014, the New York Declaration on Forests committed to globally halve forest loss by 2020. That goal is still far out of reach, however. By comparison to the period between 2001 and 2013, the pace at which trees disappeared between 2014 and 2017 rose by 42%.

Source: Climate Home News

Vera

Volvo’s self-driving Vera concept

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Much is said about the emergence of autonomous cars on our streets, but enclosed areas like ports, factories and corporate campuses may well be where they are put to work first. With this in mind, Volvo has just announced a new electric vehicle concept built to tow loads around these kinds of environments all on their lonesome, so much so it hasn’t even bothered with a cabin.
“We can see a boom in e-commerce, as well as overall global consumption and it shows no signs of slowing down,” says Mikael Karlsson, Volvo’s Vice President Autonomous Solutions. “The industry needs to find new ways to meet the increased demand on transport in an efficient and sustainable way. Therefore, new solutions need to be developed to complement what’s available today.”

The Volvo Vera concept is designed to lighten the load around ports, factories, logistics centres and anywhere else where goods are moved on the regular. The vehicle is more electric sled than electric car, removing the driver’s cabin altogether (similar to Einride’s T-log), while retaining the ability to latch standard load carriers and trailers onto the back.

Powered by the same drivetrain and battery packs as Volvo’s electric trucks, the Vera is built to carry out repetitive, short-distance trips with large, heavy loads.

The idea is that fleets of Veras would work together by connecting to a control centre over the cloud, which would optimize traffic flow to keep things operating smoothly and waits to a minimum. To that end, this central node would monitor the battery levels of the vehicles, along with their position, the content of their loads and service requirements.

Volvo doesn’t outline any production plans for the Vera, but does say that in the “near future” it will work with selected customers to develop the concept further and the potential for the concept to expand into other types of applications in the future.

You can see the Vera at work in the video below.

https://www.youtube.com/watch?v=2Gc1zz5bl8I

Industry

Russian forestry industry on the move

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Russia is one of the world’s dominant log and lumber producers and exporters. Due to its immense land mass, roughly half of which is forested, Russia accounts for nearly 20% of the world’s standing forest resource — nearly 82 billion m3 out of a global standing stock of roughly 434 billion m3. With this tremendous resource, Russia ranks as one of the world’s major players in the global trade of timber and wood products. Specifically:

  • Russia harvested 157.6 million m3 in 2017, representing a 14.4% share of global softwood timber (log) production after having passed Canada in 2014 as the second-leading producer (behind the U.S.); – Russia is the third-largest softwood lumber producer (37.8 million m3), representing 11.1% of worldwide production; – Russia ranks second in log exports at 11.9 million m3 (14% global market share, ranking behind New Zealand); and – Russia is the second-largest lumber exporter with 28 million m3 (22% global market share, ranking behind Canada).
  • The Russian forestry and sawmilling industry has become a much greater competitive force in log and lumber export markets since the late-2014 devaluation of the ruble. In recent times, the country’s industry has undergone a rapid change and is now seen to be remaking itself into an influential worldwide competitor. Today, with global markets becoming increasingly competitive, it’s more important than ever to truly understand the changing competitiveness and strategy of the Russian industry and its exporters — particularly given its expanding role in the ever-significant Chinese market.
  • The cost-competitiveness of the Russian industry was once considered bleak. This was back in 2012–14, when high costs, constrained road and rail infrastructure, and prevailing poor forest logistics were responsible for an inability to access economic timber. With many Russian forests comprising a mixture of hardwood and softwood (particularly in Siberia), the lack of markets for low-grade hardwoods (particularly aspen/poplar) hampered the economics of processing mixed stands and led to escalating logging and road costs. The outlook was also dimmed by the lack of new investments in sawmilling during the early 2010s.

In late 2014, however, the weakening of Russia’s currency significantly brightened the picture for investing in the forest products sector, ultimately leading to peak earnings in 2015 and early 2016 when the ruble’s devaluation was most extreme. The subsequent strengthening of the ruble, however, worked in combination with increased log prices to create a state of inflation in 2016 and 2017 that eroded Russian exporters’ competitiveness. Nevertheless, the considerable investments made by many companies to lower logging and sawmilling costs were able to improve the sector’s overall financial and export market position. The good news for Russian producers today is that the ruble began to weaken again early this year; in mid-September, as we write this report, it is approaching 68–69 to the U.S. dollar.

Its improved competitive position in international markets has enabled Russia’s wood products industry to expand, as evidenced by 11% growth in the index of industrial activity for woodworking in the second quarter of 2018; in June alone, it grew by 15% (more than any other processing industry in the country). The importance of export markets cannot be overstated, and is especially evident when one considers that this strong growth is in sharp contrast to a decline in the rate of housing construction within Russia in 2017 (down 0.7%, according to the Ministry of Construction, and down 2.1%, according to Rosstat) and a reduction in furniture output.

In other good news for the Russian industry, prices for commodities and exchange goods on world markets recently reached their highest peak of the last ten years, with the price of Russian spruce sawn timber from the Northwest achieving a level of $285/m3 (#1–4 SF 30×125/150, Shanghai port) at the end of 2017. By comparison, prices for Finnish spruce sawn timber (#1–5 sawfalling grade) in China reached $295/m3.

Source: Russ Taylor, Managing Director, FEA Holdings – Canada Inc, Excerpted and summarized from China’s Import Demand for Softwood Logs and Lumber to 2023 • The Changing Supply Chain in China with a Focus on Russia’s Industry/Export Potential

 

satellite

NZ / Australia – Continuous forest monitoring using daily satellite imagery

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In the recent years there has been a marked uptake of remote sensing technologies. Drones and LiDAR have acquired a high profile. These indisputably have a place provided they are cost-effective, deliver consistent results, and add value. Not to go unnoticed, though is the increased availability of satellite imagery and technological advances that allow repeat assessment of forests at low cost. The main catalysts have been the launching of more satellites and the development of cloud-based processing engines. Between them, they can provide near real-time monitoring.

New satellites with the capacity to record and monitor vegetation change are now launched monthly. The so-called temporal resolution has progressed to daily revisits. By monitoring a given location repeatedly, it is then possible to detect subtle changes in vegetation vigour and identify underlying trends.

Any such initiatives do, though come to involve massive data sets. Downloading and storing these for local processing can lead to unworkable delays. A dramatic step forward has come with the availability of cloud computing systems. These allow the petabytes of historical and recently acquired images to remain in the cloud. If the data remains lodged there, it overcomes any need to individually review, download, or process and analyse satellite imagery as was the norm until recently.

Indufor’s resource monitoring team has developed a Continuous Plantation Monitoring System (CPMS). This can access both free and commercial satellites (such as Planet) to provide timely and accurate information. It has a ready capacity to assess large areas. CPMS assists forest planners in more efficiently deploying field activities, whether their purpose is to grow, harvest or quantify tree crops.

Dr Pete Watt is Head of Indufor’s resource monitoring team. He observes that within the company’s activities the CPMS outputs save time and resources by allowing targeted field inspections. These are designed to quickly validate harvest areas and pinpoint areas of un-mapped change, disease or crop failure.

“For example, before going to the field, we run our Canopy Index (CI) model over the satellite image to check for any unusual deviations from expected benchmark values.” Examples might include areas affected by foliar diseases, or, as shown in the illustration, pockets of wind damage.

Algorithms have been developed to provide automated monitoring of such planned operations as harvesting, roading and plantation thinning. These events can be tracked by comparing images acquired at different points in time. The detection algorithm identifies the change and groups all similar pixels to produce a change layer that can be loaded into a GIS. The outputs include a summary of the area harvested to date.

The inclusion of daily imagery such as from Planet’s constellation of around 200 satellites makes the process of month-end area reconciliations a much less onerous task. The advances in the capture and processing of satellite imagery have removed barriers that have previously discouraged its operational use. CPMS captures the dynamic attributes of forests – the very characteristics that make them so valuable to us.

Indufor Asia Pacific (Pete Watt and Chaplin Chan) will be presenting at the upcoming ForestTECH 2018 series being run for forest resource managers, remote sensing specialists and inventory foresters in November. It runs in Rotorua on 14-15 November and then again in Melbourne, Australia on 20-21 November.

In addition to the technology update from Indufor, presentations from the Interpine Group, Swift Geospatial and Pan Pac Forest Products are being given on the collection, processing and the practical operational use by forestry companies of data being collected from satellites as part of the November series. Full details on the programmes and technology series can be found on the event website, www.foresttech.events.

Source: Indufor

land

Komatsu Forest buys land

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Komatsu Forest has an intention to invest in land at Klockarbäcken in Umeå, Sweden, to further expand their operations. The land area is in an existing industrial and commercial area.

Komatsu Forest manufactures forest machines that are sold worldwide. The company, which is wholly owned by the Japanese company Komatsu LTD, has its manufacturing and head office in Umeå.

There are many signs of growth in forestry and Komatsu Forest sees a strong demand globally. The company also says that forestry is an industry for the future, where it is likely to see a variety of new, innovative and climate-smart materials made from wood.

“The investment we make here is primarily about ensuring long-term growth here in Umeå”, Martin Ärlestig, Factory Manager, Komatsu Forest concludes.

Contact
Annelie Persson
General Manager Marketing & Information
+46 90 70 97 32
annelie.persson@komatsuforest.com