FM Group Newsletter

Jimmys Creek Forest

In 1997 Glenn Moir was approached by the owners of Jimmys Creek Forest to take over the management of their trees. The owners had bought the block from Dick Carmicheal at Coringa Farm, near Motonau. The forest comprised of 2 stands;

Stand 1: 24ha of 17 year old trees that had recently had some sporadic pruning, and it was standing at over 1200 stems per hectare.

Stand 2: 86ha which had been planted in 1993. This was made up of 80ha of Radiata with 6ha of Macrocarpa spread in small pockets throughout the block.

Our first task was to thin to waste Stand 1. Due to its’ age there was a high risk of windthrow so the decision was made to thin to a final stocking of 600 stems/ha.

Over the next 10 years FML pruned and thinned the younger trees to produce a mixed clearwood and structural forest dependent on soils and shelter.

Stand 1 was harvested in 2012, producing very high volumes of quality sawlogs and roundwood for the domestic market. Since then it has been replanted and will have pruning and thinning completed this coming summer.

We commenced harvesting of Stand 2 early March this year with a local contractor (Davaar Logging), this will take almost all of 2021 to finish. This forest has been grown with a domestic market focus and is producing a full range of products from high value pruned and peeler logs with minimal amounts of export and low grade chip wood. It is carrying over 600 tonnes per hectare and is generating exceptional stumpage returns to the owners.

Access into the forest was negotiated through a neighbouring property (David Hydes) and due to the long standing relationship Mike Hodgen and Glenn had with Dave a very good agreement was reached (Although Glenn thinks Mike still owes the whiskey!!!!). This minimised environmental risk as all the wood will be extracted to the top of the forest and allowed for a winter harvest.

FML looks forward to the next rotation with the Jimmys Creek Forest partnership.

Pankhurst Sawmill

Southland’s Boutique Sawmill – A look into what they are up to today.

Owners Rodney and Amanda Lonneker took over the business in 2015 from the Pankhurst family who started the mill back in 1982 with the Black and Hopcroft families. Rodney started at the mill in 2003 as a timber hand, Amanda has managed the office since they took over.

The sawmill is located just out of Riverton, inland a little, on the way to Colac Bay. The mill employs 30 staff and Rodney is proud to say that they have a very low staff turnover, the over 65’s work a 4-day week. It is clear to see that Rodney and Amanda regard their staff with great value. Timber deliveries are made using their own freight truck and all saw blades are sharpened on site by their own Saw Doctor. They have a large range of machining profile blades in stock or will design a blade if they don’t have it to meet customers varied end product demand. Rodney is a well-qualified Sawmiller with apprenticeships in Sawmilling, Timber Yarding, Timber Grading and Timber Machining along with Advanced Technical Plant Operations and Business Management papers, he is also a training assessor for Competenz. Amanda is an accountant – so it’s a highly qualified partnership. Rodney has had an interesting past and spends time guest speaking at various functions with any income from these functions being donated back to charities. A truly family run business, the Lonneker teenagers assisted with the mill workload during lockdown when contact bubbles restricted the number of staff on site.

Pankhurst Sawmill were finalists in the Southland Business Excellence Awards in the Health & Safety and New & Emerging Business categories – nominated by Worksafe and ACC.

Approximately 55% of the mill’s production is from Macrocarpa Logs, 40% from Pinus Radiata and 5% from Oregon. Rodney is exploring the possibility of increasing the Oregon portion, as Macrocarpa long term supply is uncertain. The mill’s annual production is 8,000t Macrocarpa, 6,800t Pine and 1,000t Oregon. Pankhurst Sawmill are the pioneers of Macrocarpa sawmilling and produce more Macrocarpa product than any other mill in New Zealand.

The mill supplies a large variety of products to Tiwai Aluminium Smelter, Blue Sky Meats, Alliance, most of the major building merchants including ITM, Mitre 10, Placemakers and Carters, along with hundreds of builders/farmers/landscapers and the general public. With the uncertainty of Tiwai’s future they have started a post and rail fence product line to increase their customer base.

A recent near disastrous fire took out the Breast Bench Saw and the hydraulic and electrical systems for the entire mill. A local passing at 6:30 in the morning saw black smoke billowing out of the mill, called the fire brigade and the quick response stopped the fire engulfing the entire mill. That was 5 months ago – a new more efficient Breast Bench, hydraulic and electrical system have been installed. The new Breast Bench starting up just days ago, on a slow and steady start-up to allow fine tuning. Since the fire, the mill has been operating with just the Head-rig and a Mahoe portable mill that has been set up permanently at the mill. With reduced production they were still able to meet their orders with stock on site and a determination to make it work, Rodney does not like saying no to a customer. Next on the list is to makeover the Head-rig with laser sensors and upgraded motors to increase electrical efficiency.

Rodney’s thoughts on timber consumption in New Zealand into the future are positive. With the reduction in availability of timber products and fixings, customers recently have been less concerned about the cost of a product and more concerned about the supply. Export demand for New Zealand logs is a concern though, highlighted by recent exporting of Macrocarpa, diversification of product lines, being flexible with log source and species, and keeping in touch with customer demand will help Pankhurst remain successful.

FML in Southland is a regular supplier of Logs to Pankhurst – a valuable part of the Southland’s domestic sales.

Log Market Update – July 2021

Looks like the China log market has peaked in late June, and is now starting a slow slide back from its unsustainable peak of $195 USD for A grade. While this is a record sales price since 1993 log price boom, in NZD it has been somewhat tempered by the high ocean freight (now mid $60’s USD and high- mid 70c exchange rate against the USD).

Had we had the $28 Ocean Freight and the 52.5c NZD /USD rate of 1993 we would have had A grade at $290 at wharf around the country rather than the $155-$170 mark for a brief period of time that it was.

Environmental restrictions on production, tightening of credit from banks for construction projects and high commodity prices holding back real estate development, even electricity shortages in some regions have also contributed to the low demand. In addition, the Taicang port authorities (the largest softwood log and lumber ports in the Yangtze Delta) announced last month the closure of the Taicang fumigation facility (for fumigating Canada/Alaska/Russia logs) with restrictions on log processing in the area will be introduced in an attempt at replacing log imports with lumber businesses. This has caused widespread turmoil for log traders in the region and a significant drop in wholesale log prices. Imported lumber prices have also been falling this month, with lumber inventories remaining low reflecting the poor demand. Softwood log inventory levels have risen sharply from 4.2m m3 last month to 5.2m m3 this week due to the weaker demand and continued high arrival volumes, in particular from Europe where volumes have surged in recent months, despite softening pricing. CFR prices in July are steady for now but under pressure because of the low demand.

Freight rates have increased again from last month, around +/-US$65/JASm3 for a NZ NI 2:1. This is due to a high congestion/delays in NZ ports and rise in bulk fuel costs. Also combined with big delays in discharge ports in China.

While export logs prices are still better than our 3 year average, we still see a positive outlook for summer. It is normal for demand in export markets to drop over summer months in the Northern hemisphere.

Our local demand for logs remains strong with mills we have been supplying for the last 25 years, and this will remain so as NZ works through a building boom around the country. The only issue will be increasing costs of building due to limited supply, or more likely production.

As wood for energy discussions and demands also become an option preferred to coal, and carbon increasing to $48 today, the future for NZ forests looks bright and also for harvesting on a long term basis.

While the recent correction in export pricing is more of a reminder of price sustainability, it is difficult in the current environment to see what the new normal is, and where we may be in 12 months time!