FEATURE SUPPLEMENT 29
www.age.co.nz Thursday, March 17, 2022
FORESTRY IN WAIRARAPA Happy thoughts and a handful of flax contentious He Waka Eke Noa consultation about how to measure and manage their own farm emissions. How on earth are farmers expected to mitigate, o˜ -set or manage on-farm water quality, erosion, methane, nitrous oxide, carbon dioxide with no exotic tree reserves to provide any income? Or o˜ -set anything in their lifetime?
It appears we have a new Minister of Indigenous Forestry. Minister Nash has perplexed and astounded both farmers and foresters around the country by announcing new “tweaks” to the Emissions Trading Scheme (ETS). This has come o˜ the back of anti-pine and farming groups attempting to stop whole farms being planted into pine trees, but unfortunately has the potential to only make it worse.
The problem with large scale indigenous forestry:
1
Indigenous cost AT LEAST ten times as much to plant. Up to $50,000 per ha. Who has that sort of money laying around?
The Minister has announced a “proposal”, which is code for a “foregone conclusion”, to remove all exotic tree species from the “Permanent” category of the ETS. Now at ÿ rst suggestion, this sounds sensible. Who wants pines that might be there forever? Certainly not the production forestry sector, that’s our job, to harvest and sell logs and timber products. We would all be out of business, and business is booming! The thing is, with pine trees, permanent is never really permanent. There is always the option to harvest and the fact that there is harvesting occurring right now in our biggest New Zealand owned so-called “Carbon farms” means that these forests were in scant danger of succumbing
2
There will be no carbon credits gained in the lifetime of the farmer. It could take 50 to 80 years for them to grow enough to measure any credits. If the plants survive at all, due to climate change predictions of increased droughts and ˛ oods.
to the “plant and walk away” slogan of anti-pine groups. Fibre in the future will be far too valuable for that. The only true “plant and walk away” is indigenous trees. The trouble is with this proposal to omit all exotics, is that it also forgets that we MIGHT remove the
opportunity to have a large crop of ÿ bre that is viable for harvest and extremely valuable for new future markets, such as biofuels. If we don’t plant the crop to start with, we’ll never know, will we? It is worst case scenario for the agricultural sector who are undergoing the
3 4
Indigenous will never be harvested. No future ÿ bre sources. For anything. This will not help the bottom line for farmer’s proÿ t. Which in turn is not helping them stay on the land.
5
Too late for our climate change goals. You can kiss them goodbye and wait
for the new range of carbon taxes that the Government will implement once we have failed. Who pays? The taxpayer of course. Can’t we have some of both? Why can’t the Government commit to planting all their own crown-owned forest estates in indigenous-only forests. Why not make a percentage of all privately owned farms compulsory for indigenous permanent planting, but not all? Why not just set a cap on exotic permanent plantings? I have a lovely garden, and its hard work to establish and bloody hard work to maintain. I would hate to think we are committing a generation of farmers to becoming native gardeners and making them pay for the sins of their ancestors who removed it in the ÿ rst place. Next month: Why pine trees do not fall over dead at any given moment, why biodiversity is nearly just as good in a pine forest as a native forest but starts 30 years earlier, and why we shouldn’t give people excuses not to plant trees. Erica Kinder CEO, Southern North Island Wood Council
30 FEATURE SUPPLEMENT
Thursday, March 17, 2022 Wairarapa Times-Age
FEATURE SUPPLEMENT 31
www.age.co.nz Thursday, March 17, 2022
FORESTRY IN WAIRARAPA Gordon Wong on the ‘natural law’ of forestry investment This year, Forest Enterprises turns 50. Founded in Masterton in 1972, Forest Enterprises is one of New Zealand’s leading forestry investment managers and remains locally owned and operated.
“The ÿ rst major brief I worked on was in 1992 – I was tasked with making forestry more a˛ ordable for retail investors. “I had the idea to harness a (then) new company structure which allowed many more investors into each forestry investment. It lowered the entry cost, and gave investors tax deductibility and limited
For the whole family, forestry was the best choice “There is no other investment we can literally see growing which o˛ ers the same ÿ nancial, environmental and social rewards”, says Gordon.
Gordon joined Forest Enterprises in 2014 as the in-house legal counsel and as a director/shareholder. It was a watershed year because the Financial Markets Conduct Act was passed. Forest Enterprises became a licensed manager and registered its investments, under the new Act.
Legal Services Director and co-owner Gordon Wong re˜ ects on his 30-year relationship with the company, for him an era of innovation, success and a sense of family. Making a mark Gordon was Forest Enterprises’ lawyer for 23 years while he was a partner in private practice.
Gordon splits his time between Greytown while working in the Masterton o˝ ce, and Wellington where he works from home one day a week.
Gordon Wong.
liability protection”, explains Gordon. “It was a great collaboration between Forest Enterprises, the statutory supervisor, and my law ÿ rm. Forty-four new forestry investments were progressively launched and sold out in quick succession. It created a huge source of legal work for me!”
“I ÿ rst invested with Forest Enterprises in 1993 when my son was born, and again later for my daughter.
Gordon (second from left) in Te Mai Forest in 2014, the year he joined Forest Enterprises. Pictured with fellow Forest Enterprises co-owners Graeme Tindall (centre), Malte Coulmann (second from right) and Bert Hughes (far right). On the far left is retired Forest Enterprises director and former owner, Steve Wilton.
Innovation and integrity “I think what has made Forest Enterprises successful – then and now – is that we have the expertise and the courage to innovate,” says Gordon. “We innovate because we want to deliver the best results for our investors. And we strive to be the market leader in forestry investment. “That’s why we developed the innovative structures to make forestry investment more accessible. We were the ÿ rst to use limited partnerships in forestry investment. We were
the ÿ rst to partner with New Zealand Carbon Farming to monetise the carbon in the investors’ forests. We were the ÿ rst forestry promoter to produce a product disclosure
statement and o˛ er ÿ nancial products under the Financial Markets Conduct Act. “Our investors look for competent management and sound judgement. They
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From the ÿ rm to the forest When Gordon ÿ rst acted for Forest Enterprises, it was a small company with six employees managing a few forestry investments. Today, it
“When they were children, I took them to the forests, so they’d see the trees growing taller like them. As young adults, they now enjoy the good harvest returns and are proud to be contributing to New Zealand’s climate change goals.”
has over $650 million of assets under management, 32 sta˛ , two o˝ ces and over 6500 individual investors.
experience and 30 years’ knowledge of the forestry industry to help grow the business.
“Being a trusted adviser as the company grew and now having a key role in its future are the aspects of my job I ÿ nd the most rewarding”, says Gordon.
“I’m not trapped in an o˝ ce thankfully. I enjoy the exhilaration of being out in the forest. Being close to nature helps me de-stress. Spending time in the forest and with our contractors also improves my legal advice, particularly around health & safety and environmental management.”
“My responsibilities have expanded considerably, drawing on my legal
Gordon is a licensed marriage celebrant, o˝ ciating primarily for close friends and family. Gordon was the wedding celebrant on two separate occasions for Forest Enterprises managers. “It was an honour to perform the nuptials instead of drafting the pre-nuptial agreements!” he jokes. “Actually, being chosen for such a special role re˜ ects the collegiality and strong relationships we all enjoy at Forest Enterprises”.
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32 FEATURE SUPPLEMENT
Thursday, March 17, 2022 Wairarapa Times-Age
FEATURE SUPPLEMENT 33
www.age.co.nz Thursday, March 17, 2022
FORESTRY IN WAIRARAPA Forestry is putting on their steel undies Just when you think you might be able to wipe the brow of an unpredictable 2021 and settle down into some form of normality, 2022 decides to have a bit of a ˜ ex and show you the fun ride’s not over yet. Last year saw export log prices swing from record highs to breakeven lows within the space of a few months and so far, 2022’s not looking much di° erent. The issues around Evergrande and the wider issues in the Chinese construction industry seem to be worrying the media more than the buyers with demand still reasonably solid in the face of continued bad news from news reels. The proof will be in the pudding in terms of demand over the next few weeks as the manufacturing sector kicks back into gear after the Chinese New Year holidays. Global supply into China remains subdued and, at present, demand appears to be outstripping supply with sales prices (CFR) increasing $US30/ m3 in the past 3 weeks. Freight has taken the fun out of any price increases with freight rates increasing at a similar rate to sales prices. Some of this is attributed to fuel as barrel prices climb out the gate. To compound issues, the EPA
in reaction to sta° illness. Port congestion is generally an issue at this time of year anyway but, as every log needs to be measured and bar coded before it’s loaded on a ship, absenteeism is likely to put a stranglehold on the NZ supply in the short-to-medium term.
Freight has taken the fun out of any price increases with freight rates increasing at a similar rate to sales prices.
introduced a host of new rules in January this year that all but prevent the use of Methyl Bromide for fumigation. Methyl Bromide is a key fumigant for cargos bound for China which is used on port to fumigate the logs that are stowed on the top deck of a vessel. Now that this is all but impossible, exporters have had to move to debarking deck-stowed logs or ÿ nding vessels that carry full under deck cargos, further increasing costs and port congestion. The e° ect of the Ukraine invasion on freight rates is yet to be fully understood. Putin’s navy conveniently lobbed a missile into the side of a Bangladeshi cargo vessel last week in the Black Sea which has put the frighteners up the
shipping industry. This, and the threat of excluding Russia from the Swift payment system, is seeing many of the vessels operating in the Atlantic now headed south to the Paciÿ c which will hopefully free up some capacity and counter some of the increased fuel costs. March at wharf gate (AWG) export prices surprised many with solid increases from several exporters but a very wide spread of around $15/ JAS between either end of the spectrum. A grade in most ports (excluding Gisborne) is in the early $140s/JAS which is $10/JAS over the 3-year average. The disparity between exporters is primarily due to the rapidly increasing freight
costs with some having been smart/lucky enough to ÿ x March rates earlier than others. It is likely that the CFR price will continue to climb over the next few months and the ability to see this in AWG prices will rely solely on how far the shipping companies can push their rates. To compound matters, the $NZ:USD has climbed $NZ0.02 over the past few days which has the net e° ect of removing $NZ5/JAS from sales prices. NZ log supply is usually peaking during March but covid will probably pull the handbrake on as it inÿ ltrates the supply chain. The biggest issue will be at the ports with marshalling companies already signalling reduced hours
Carbon has traded some solid increases in 2022 breaking through the $85/NZU mark before retreating to just under $80/NZU at close of play last week. This represents around $50k/ha or $1900/ha/yr for those who are in the averaging scheme. Sounds appealing but don’t expect to plant your hill country out this year as seedlings and labour are already spoken for. We are continually ÿ elding calls from landowners wanting to plant this year, however, we (and most other companies) are fully committed for 2022 and 2023 is ÿ lling up fast. Resilience is the key in any commodity-based business, and it looks like 2022 will test how resilient some players in the industry are in the face of rapidly changing and volatile global parameters. Having said that, this is not our ÿ rst rodeo and we’re all used to wearing steel undies, so bring it on. Marcus Musson Forest360
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Wood Councils of New Zealand Celebrate International Day of Forests The eight Wood Councils across New Zealand have joined together to hold “The Great Book Handout” in honour of International Day of Forests on 21 March 2022. This year the theme is “Forest restoration; a path to recovery and wellbeing”. A new children’s activity book has been developed by the team from “Wood is Good”, the primary school engagement programme coordinated by Wood Councils and the forest sector. This book is aimed at home schoolers or classrooms and is ÿ lled with single activities that students, (aged 5 to 8), can complete on their own, themed around forest environments, biodiversity, tree biology, maths and crafts. This is the second year for the “Wood is Good” programme, supported through funding from Te Uru Rakau – The New Zealand Forest Service and the Forest Growers Levy Trust. The pilot year, 2021, achieved
visits from the Wood is Good team to 30 primary schools across New Zealand. A loaded log truck is taken to a school for a day and visits to the truck are combined with classroom sessions that include story reading, videos showing logging and tree planting, careers and subject discussion around forestry education, along with interactive tree measurement and drone ˜ ying demonstrations. Log truck safety is an important part of this programme where students get to sit in the log truck, and realise the blind spots for the driver. These days give students a handson experience with real professional foresters, and truck drivers, where they ÿ nd out how plantation forests in New Zealand provide timber for everyday products, what jobs are out in the sector, and how an appreciation of trees can be incorporated into our everyday lives. This year primary schools are
under extreme pressure with Covid issues, and the Wood is Good team instead are developing a new resource called “Forestry in a Box”. This will contain a suite of activities, books, games and wooden kits themed around plantation forestry that will be gifted to primary school across New Zealand, teachers or home learners can lead some handson sessions for students with the pre-prepared kits. The ÿ rst resource for this kit is the NEW ZEALAND FORESTRY ACTIVITY BOOK AGED 5-8 and 6000 copies of this book have been printed ready for free giveaways to all home schoolers or primary schools. If you would like to receive free copies of these activity books for children, please contact your local Wood Council. The book can be viewed at: https://woodisgood.co.nz/ new-zealand-forestry-activitybook-juniors/
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/