The Wood Processors & Manufacturers Association of New Zealand continues to lobby the government for more a more favourable trading environment as processors such as Juken New Zealand eye drastic measures in the face of subsidised foreign competition reports Rebecca Howard Business Desk Scoop NZ.

This week Juken NZ, a unit of Japan’s WoodOne Ltd, put forward a plan to halve the Gisborne wood-processing mill workforce as it struggles in a highly competitive market, and as overseas buyers are buying a record volume of logs.

WPMA chief executive Jon Tanner said any closure or diminution of a wood processing company is a great loss to the regions.

While Juken is facing some specific challenges in the Japanese 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,” said Juken general manager Dave Hilliard.

Other wood exporting countries such as Canada and Russia support their local industries while Chinese wood manufacturers benefit from subsidies, creating an uneven playing field for New Zealand processors, according to the WPMA, which would like to see the government take a complaint to the World Trade Organisation.

Tanner said Juken is not alone: “We are certainly getting a consistent message from our membership that they are being squeezed and squeezed hard. It’s getting harder.”

Against that backdrop “we are maintaining the line with the ministers that we do need to create a fairer playing field for manufacturers in New Zealand and that means tackling international subsidies that are paid to our competitors,” he said.

According to Tanner, “we are seeing rising prices in raw materials going offshore and we believe, and have written to senior ministers, that is being underpinned by WTO-prohibited subsidies overseas.”

So far, Regional Economic Development Minister Shane Jones has been supportive, Tanner said. “The consistent message he has given us before and after the election is that he will not see local businesses suffer because of these conditions,” he said.

Tanner underscored that New Zealand has the opportunity to “push for change,” in particular as it signs up to the renamed Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which includes major log exporter Canada. “Under that, we really have to push strongly to make it a fairer world for New Zealand manufacturers,” he said.

He lauded the new government’s efforts so far, in particular plans to bring forestry cutting rights into the Overseas Investment screening regime.

“They are simply trying to take steps to level that playing field internationally,” he said.

A Treasury spokesman confirmed Treasury has taken the approach of targeted consultation on bringing forestry cutting rights under the OIO and is seeking submissions.

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Forestry and wood processing company, Juken New Zealand has begun consulting employees at its Gisborne wood-processing mill about potential changes to the products made there in order to return the plant to profitability and secure its long-term future.

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 (veneer), mainly for the Japanese housing market.

At the same time, the company is also making changes to what it makes at its Wairarapa mill, increasing production of its ‘J-frame’ framing for the New Zealand housing and construction market and decreasing the specialist products made for the Japanese building market. These changes won’t result in job losses for any of Juken’s 222 permanent staff in Wairarapa.

General Manager of Juken, Dave Hilliard and other senior staff have been meeting local workers this afternoon to discuss the proposed changes and the reasons for them. He says there’s been a significant drop in demand from Juken’s main export market in Japan for Plywood and structural LVL building products in the past few years, which has seen these parts of Juken’s New Zealand processing business operating at a loss.

“The Japanese housing market has been in decline and future demand for these products is not expected to improve because of the ageing population in Japan.”

Hilliard says 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.

“All of our people have worked hard over the last five years to stay competitive, including increasing our New Zealand and Australian sales to reduce our reliance on the Japanese market, invested in a form-ply plant, reduced costs and hours of operation.”

Hilliard said despite these efforts, the mills current Plywood and LVL production capability and product mix doesn’t match the volume and price required by customers – which has led to increasing losses from Ply and LVL production.

“Significant investment would be required to increase to a scale to compete internationally. At this time, there’s just not the log or manufacturing volume of appropriate quality and price to justify that investment.”

The proposals presented to staff today would see the mills return to profitability to keep high-value wood processing jobs and investment in Gisborne and Wairarapa by refocusing on value-add products where there’s strong customer demand and Juken has a competitive advantage, including its premium sawn clearwood products.

“One of Juken’s advantages is that we process timber from our own forests on the East Coast and the Wairarapa. We’re one of the few forestry companies in New Zealand who grow and process our own timber”.

In Gisborne, we’ve invested to move from unpruned logs suited to Plywood and SLVL (veneer) products to a greater proportion of pruned logs suited to higher value clearwood products used for high-end residential and commercial interior cabinetry, furniture, solid doors and feature walls.”

“We’ve also increased our investment in kilns for the Gisborne and Wairarapa mills so we can increase production from the sawline producing these clearwood products.”

“We’re refocusing on producing high-quality solid wood products from both mills.”

“The solid wood saw milling and finishing lines in Gisborne would remain with increased investment over time to allow the mill to process all of Juken’s unique pruned logs from its forests.”

“This investment will likely initially be in log handling and sawmilling, but could expand to include production processes that use the sawmilled lumber products.”

He said if the decision is made to go ahead with the changes in Gisborne the mill would stop producing Plywood and LVL products and reduce the manufacture of SLVL (veneer). Around 100 full time positions would remain at the Mill.

“We are consulting with staff and will be working closely with them as we work through this proposal”.

“The proposed changes in Gisborne, if implemented, will be difficult for our people, particularly as they come in the New Year. We’ll be working with Government agencies and Gisborne iwi, civic, community and business leaders, over alternative employment opportunities for our people should the changes go ahead,” said Dave Hilliard.

Hilliard said the proposed changes would have no impact on Juken’s forestry operations.

“We are committed to the future of the forest and wood processing industry and to developing our high-value timber processing and innovation business”.

“But, as an exporting manufacturer we have to ensure that our wood processing business is focussed on producing the right high value products to meet changing customer demand”.

The company advised staff that the consultation period in Gisborne would run for two weeks. After that it would consider feedback on the proposed changes before making any final decisions on the future structure and output of that mill.

The media contact for Juken is Trish Sherson on 021 570 803 or e-mail trish@shersonwillis.com

About Juken New Zealand Limited

• Juken has over 30,000 hectares of sustainably managed and certified plantation forests in East Coast and Wairarapa.
• It has four wood processing mills to produce advanced and innovative wood products timber products from its Radiata Pine forests in Kaitaia, Gisborne and Wairarapa for local and export markets.
• The company employees around 1000 people across its forestry and processing businesses in New Zealand.
• Juken makes a wide range of engineered wood (LVL, Plywood, Panels) and solid wood products for structural and non-structural building uses including external, internal appearance and non-appearance finishes.
• The company is owned by parent company WoodOne Ltd, a major international housing materials and componentry company, which has invested over $NZ700 million into its forest and processing operations in New Zealand in the past 20 years.
• Juken New Zealand was established as a subsidiary of WoodOne by its founder Toshio Nakamoto in 1990.
• Toshio Nakamoto was awarded the New Zealand Order of Merit in June 2005 for services to New Zealand –Japanese Relations.
• WoodOne remains family owned by the Nakamoto family and Mr Nakamoto’s son, Yousho is now the Chairman and Director of Juken New Zealand.

Ilim Group is the largest pulp and paper organization in Russia. Ilim Group’s upper management team made the long trip to Canada in December to get a closer look at the Tigercat manufacturing plants in Ontario.

Headquartered in St. Petersburg, Ilim Group is the largest pulp and paper organization in Russia. Its mills account for more than 75% of the total pulp production in the country and the company’s harvesting operation is currently running twelve Tigercat machines – three 870C track feller bunchers, three skidders, two H855C harvesters with 575 harvesting heads and four T250D track loaders.

The upper management team made the long trip to Canada to get a closer look at the Tigercat manufacturing plants in Ontario. After touring the Tigercat facilities, the group flew to northern Alberta to visit the logging operations of Joe Martushev, whose ancestors settled in Canada after emigrating from Russia a couple of generations ago.

The field visit gave the Ilim representatives a unique opportunity to speak with Canadian-based loggers in their native language and to get first hand feedback on the equipment. It was also helpful in that the Alberta conditions and operations are quite similar to Russia.

Fiskarheden decided to implement a comprehensive investment plan, starting with a Microtec CT Log system for their sawmill in Transtrand, Sweden. The company’s main goal is to increase the value of each log and to reduce waste. This will enable Fiskarheden to utilize the potential of the highly valuable raw material coming from well-managed forests in the most efficient way.

To get an overview of the entire sawmill, Fiskarheden will use Microtec’s scanning technology not only in the sawmill itself, but also in the green sorter and the dry sorting mill. A Goldeneye 900 board quality scanner will be implemented in the existing dry sorting mill.

“Using Microtec technology and especially the internal information of the logs will allow us to improve our partnership with the forest owners as well as creating the best possible products for our customers,” states Magnus Larsson, Vice-CEO of Fiskarheden.

The development plan for Fiskarheden sawmill foresees a scanner solution out of one hand, as well as a further investment and development in the sawmilling process.

The installation starts in July 2018. At the log yard, the CT Log will be installed and started up. At the same time, a new wane scanning system will be installed in the green sorter. In the second half of 2018, the newest version of the Goldeneye 900 board quality scanner will be implemented in the dry sorting mill.

Fiskarheden is one of the biggest sawmills in Sweden. It has saw capacity of 330,000m3 per annum.

Log imports through Xiamen Port, China, totalled 1.905 million cubic metres valued at $46 million in 2017, up 10% in volume and 11% in value compared to 2016, as ITTO reported.

The imported logs were from 37 countries with New Zealand, Australia, the USA and Estonia topping the list in terms of volumes. Imports from New Zealand totaled 962,000 cubic metres valued at $130 million and accounted for over 50% of the total volume and total value of imports through Xiamen Port.

The volume and value of imported logs from Estonia rose 103% and 138% respectively in 2017. According to the statistics, imported goods from Estonia through Xiamen port were valued at $9.42 million of which 98% were logs.

The species of imported logs through Xiamen port are radiata pine, spruce, scots pine, ponderosa pine and loblolly pine but over 70% of the logs imported were radiata pine.

Roseburg Forest Products is pleased to announce that Tony Ramm has been promoted to General Manager of Plywood, effective Feb. 1. Tate Muir will replace him as Plant Manager at Roseburg’s Riddle Plywood plant. Ramm was named Riddle Plywood plant manager in May 2014. He joined Roseburg from Weyerhaeuser, where he held increasingly responsible positions for 10 years. He also worked for Boise Cascade for 11 years. Tate Muir has worked for Roseburg for the past 21 years, since graduating from Oregon State University with a degree in exercise and sports science. During college, he worked summers with Roseburg, and took a job at Dillard Particleboard upon his graduation. He soon transferred to a quality assurance role at Dillard Plywood, where he worked for 15 years in roles including QA supervisor and LEAN champion. He has served as Riddle Plywood’s manufacturing superintendent since June 2013, overseeing all manufacturing processes at the plant.

Ramm holds a bachelor’s degree in computer information systems from Saint Leo University in Florida, and he earned a white belt in LEAN Six Sigma. During his time leading Riddle Plywood, the plant earned the APA’s prestigious Safety Improvement Award, for the greatest improvement in reported safety incidents from 2014 to 2016.

As general manager for plywood operations, Ramm will be responsible for managing Roseburg’s plywood facilities in Dillard, Riddle and Coquille, Ore. He will report to Bob Jewell, Director of Solid Wood Manufacturing.

Canada’s lumber production rose 6.3% from September to 5 991.0 thousand cubic metres of lumber in October. Production was 1.2% higher than in October 2016, reports Statistics Canada.

Sawmills shipped 5 884.0 thousand cubic metres of lumber in October, up 1.1% from September and 0.3% higher than in October 2016.

Following the successes of 2017, recycling equipment specialists, Terex Ecotec are quick off the mark in 2018 with the appointment of McHale Plant Sales as exclusive distribution partner for Ireland, North and South. The company will also be an authorised service provider for the products, as the Ecotec brand continues its global expansion.

McHale Plant Sales is one of Ireland’s leading plant and machinery distributors with a strong presence in constructions, civil works, quarrying, forestry and agriculture sectors and a customer base that includes many leading firms active in the environmental recycling and waste management activities. With a history that dates back to its establishment in 1952, McHale Plant Sales operates on an all-island basis from headquarters in Birdhill, near Limerick City in Ireland’s mid west region, and from a sales and technical support centre situated on the east coast of Ireland at Rathcoole, near Dublin City.

Commenting on their recent appointment Tim Shanahan, Managing Director said, “Honoured to be appointed to represent Terex Ecotec products in Ireland, North and South, we in McHale Plant Sales look forward to applying the full weight of our organisation to the task of building on the excellent position that the Terex Ecotec range currently holds within the marketplace”.

“In addition to our work in sales and marketing, a major focus of our effort will be to communicate to customers the technical, service and parts support that we are geared to provide within sectors of industry that are expected to grow even more significantly in the years ahead” he said.

Conor Hegarty, International Sales Director for Terex Ecotec commented “We are delighted to welcome McHale Plant Sales to our growing distribution network, who are uniquely positioned to provide localised coverage in our home market. This is a great opportunity for us to work with this highly experienced business, to expand and strengthen our foothold in Ireland.  We are committed to delivering high quality products, offering superior customer support and only partner with the best distributors who have the ability to react quickly to customer requirements.”

“The opportunity and potential that exists within the buoyant Irish market excites us and we are confident that McHale Plant Sales are well placed to capitalise on this, having already successfully placed a TDS 820 Slow Speed Shredder into the largest independent waste management operation in Northern Ireland, River Ridge in recent weeks. Operating across multi-sites River Ridge offers a broad range of collection, treatment and diversion from landfill solutions to many of NI’s local authorities, public bodies and private operations” he added.

Terex Ecotec has achieved significant growth and development and today offer a world class, full mobile product portfolio of chipping, shredding, screening and composting equipment. Additionally, a range of waste handlers efficiently load material into the Ecotec equipment to maximise throughput capabilities.

Irish customers can buy with confidence – Local Service, Local Parts and Local Experts.

To learn more about Terex Ecotec’s full line of environmental equipment visit www.terex.com/ecotec

We are proud to be named to Fortune’s World’s Most Admired Companies® 2018 list. This year, Caterpillar is ranked number 43. Caterpillar has appeared in the Top 50 All-Stars list for 17 consecutive years.

“We welcome this recognition as one of the world’s most admired companies,” said CEO Jim Umpleby. “This honor belongs to our people, the dedicated Caterpillar employees who help our customers build a better world.”

To determine the Top 50 All-Stars, Korn Ferry Hay Group asked the respondents to select the 10 companies they admired most. Unlike with the industry rankings, respondents could pick any company in any industry while selecting their top 10 companies. We’re honored to have been included in many respondents’ top 10 lists.

Visit fortune.com to see the full list of the World’s Most Admired Companies.

Steady and strong competition from foreign buyers for New Zealand logs is forcing raw material prices up for local timber processors. The New Zealand Timber Industry Federation says that log prices have already risen by 25% to the local market over the past five years and sawmills are preparing for further predicted log cost increases over the first half of 2018.

Logs are a sawmill’s biggest single cost so the financial impact is significant. Local sawn timber prices have not kept pace with the recent log cost increases. Timber prices have risen by just 7% in the last five years.

Log volumes and prices for export and domestic markets are now reaching the highest levels ever recorded in a market that appears to be stable and not speculative. Log supply to local sawmills is competing with the strong export markets, especially China, as that market continues to grow.

New Zealand exporters have spent decades pushing Radiata Pine as a species and product. Overseas buyers now understand and appreciate the many potential uses of Radiata Pine. This is fuelling the demand and making Radiata Pine a preferred species in many cases.

The latest survey conducted by Scion (http://www.scionresearch.com)) “New Zealand Log Price Outlook – November 2017” released 1 January 2018, predicts that log prices will rise in February and continue to increase until May before levelling out.

The New Zealand Timber Industry Federation says that timber prices will increase as sawmills look to secure sufficient log supply to keep mills running and to recover the increased log costs. Buyers of finished timber products anticipate future price increases.

Source: NZTIF