Vida Nössemark is investing in a continuous drying kiln from Valutec. This will increase the annual drying capacity at the sawmill by 70,000 cubic meters (29,700 MBF).
Nössemark, in the province of Värmland, Sweden, produces planed structural lumber with a good deal being exported to Asia. Today, the sawmill produces 150,000 cubic meters (63,600 MBF) but has plans to eventually expand to 250,000 cubic meters (106,000 MBF). Investing in a continuous drying kiln from Valutec will increase the drying capacity by 70,000 cubic meters (29,700 MBF), while the quality of the wood will also increase.
The continuous drying kiln is of FB type and has heat recovery. It will be used exclusively to dry 2.45 metre spruce planks to a moisture content of 18 per cent.
The kiln comes with Valutec’s new Valmatics 4.0 control system. This is the only control system that combines adaptive control simulator technology and enables optimisation of capacity, quality and energy consumption at the same time. The delivery also includes a switch to Valmatics 4.0 on two existing compartment kilns from another supplier.
Installation of the kiln and replacement of the control systems will commence in January 2020 and the facility is expected to be operational in April next year.
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In January-May, log imports to China from Russia declined 26.2% y-o-y to 3.6 million m3 with import value dropped 27.2% to $439.8 million, according to China Customs data. U.S. log exports to China fell 39.5% to 1.6 million m3, export value decreased 44.6% to $338.4 million. Share of Russia in Chinese log imports slid 4.97 pp to 14.3% and share of U.S dropped 4.16 pp to 6.5%.
From January through May, log imports to China from New Zealand expanded 15.4% to 7.4 million m3 with import value surged 13.2% to $1.04 billion. Australian log exports to China jumped 29.9% to 2.5 million m3, while average price declined 18.5% to $109 per m3. Log exports from Germany to China soared 243.0% to 959.0 thousand m3, average price fell 39.8% to $153 per m3.
Total Chinese log imports slid 0.59% to 24.9 million m3, while average price decreased 12.1% to $169 per m3.
Henrik Nieminen, currently the Deputy CEO of Tornator Oyj, has been appointed as the new CEO. He has been working for Tornator since it was founded in 2002.
The Board of Directors and the current CEO, Sixten Sunabacka, have mutually agreed that he will step down from his current position. The change has the full backing of Sunabacka, who will continue to work for Tornator as Senior Adviser until the end of 2019.
Tornator is the leading company in Europe specialised in responsible forestry with own forests in Finland, Estonia and Romania.
Mark the dates into your diary – if you’re a local sawmiller. Two years ago – over two weeks – the WoodTECH conference series run by the Forest Industry Engineering Association (FIEA) achieved a record turnout of sawmilling companies.
They were drawn from throughout Australia and New Zealand. Over 400 delegates from all major sawmilling companies in the region in addition to leading technology providers from throughout Australasia, North America and Europe converged on Melbourne, Australia and Rotorua, New Zealand.
Two years later, in September 2019, WoodTECH 2019 will again be attracting scanning, sawing, saw and mill maintenance technology specialists, innovators and leading practitioners from around the world into Australasia. The two-day independent programme will again provide New Zealand and Australian sawmills with a unique opportunity to learn about the very latest in technologies and operating practices from around the globe.
“This will be achieved through a series of tailored presentations, practical workshops and on-site exhibitions that have been set up with the industry”, says FIEA Director, Brent Apthorp. “It’s expected again to be the largest gathering of sawmilling expertise yet seen in this part of the world”.
Practical workshops set up for local sawmills
“What makes the 2019 event stand out is the series of workshops that have been set up for local mills” says Mr. Apthorp. “Following on from the success of the 2017 event, a series of practical troubleshooting workshops have been designed for a much wider cross section of sawmill production and operational staff. They’re going to provide a unique insight into how sawmills can extract the best performance out of their saws, machine centers and sawing operations”.
Workshops of between 60-90 minutes are being given on; primary breakdown and machine alignment and maintenance techniques to improve machine reliability, real-time quality control, condition monitoring, saw and guide alignment and trouble-shooting saw guides. In addition to the workshops, presentations throughout the two days in each country have also been geared towards sawmill production staff.
A series of presentations on technology advancements with robotics and automation in the saw shop, some of the new equipment and operating practices drawn from throughout Europe, North America and Australasia together with tips and tools from respected saw doctors will be of real benefit to those working in the saw-shop.
On sawing machine centers, new non-contact, real-time saw temperature monitoring systems will be outlined by leading tech providers out of North America. Saw performance monitoring systems can accurately measure, in real time, the performance of the saw when in the cut for both circular and band saws. This provides real-time feedback of saw performance data to the user which can be used within the mill to evaluate the effect of varying sawing parameters.
“Based on feedback from the major sawmilling event in 2017 and more recent discussions with local mills, we’ve rejigged the two-yearly tech update in both countries. The change in focus is to encourage sawmill teams – management, mill production, saw-doctors and maintenance staff – to take advantage of the line-up of world class international specialists being brought into the region” says Mr. Apthorp. “This will ensure that teams can collectively put the practical learnings into practice once back on site”.
Registrations to both events in the series are now open and can be accessed via the event website, www.woodtech.events. Details of the programmes for both countries likewise can be viewed on line. The series runs in Rotorua, New Zealand on 11-12 September and then again in Melbourne, Australia on 17-18 September 2019
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From January through April, UK pellet imports surged 32.4% to 2.7 million tones, import value jumped 35.8% to €436.0 million, according to Eurostat. Imports to UK from U.S. expanded 10.0% to 1.5 million tones, imports from Canada increased 23.3% to 509.5 thousand tones, imports from Latvia jumped 342.6% to 331.9 thousand tones and that from Estonia soared 554.3% to 102.2 thousand tones. Total pellet imports to UK expanded 32.4% to 2.7 million tones, with import value rocketed 35.8% to €435.0 million.
Denmark’s pellet imports fell 33.6% to 1.1 million tones, average price of pellets exported to Denmark jumped 13.5% to €154 per ton. Italy decreased 22.9% pellet imports to 414,6 thousand tones with import value declined 26.0% to €82.0 million.
In first four months 2019, pellet exports from U.S., the biggest supplier of pellets to EU, slid 2.99% y-o-y to 2.0 million tones with export value was up 2.3% to €330.8 million. Canada’s pellet exports to EU declined 11.7% to 527.6 thousand tones with export value dropped 7.36% to €80.9 million. Pellet exports from Russia surged 22.7% to 487.6 thousand tones, export value jumped 35.8% to €73.3 million.
Total pellet imports to EU slid 3.38% to 5.4 million tones, average price for pellets imported to EU dropped 7.59% to €166 per ton
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The new customer service centers supporting John Deere’s forest machinery business will open in 2020 in Perth, Scotland; Ockelbo, Sweden; and Laukaa, Finland. The investments will improve the geographical scope of our customer service and the efficiency of customer service.
Construction work on the approx. 9000 m² plot in Perth, Scotland, has already started. The new customer service center will also serve the road construction machinery customers of Wirtgen, a company fully owned by John Deere. The new 1300+ m2 building will house a four-bay machine repair shop, a wash station, a spare parts and accessories store, a spare parts warehouse, a conference room and social facilities for employees. The plot will also have a cold storage and space for new and used machines. This is a growth investment, so customer service will also remain at the current facility in Carlisle, England.
The new customer service center in Ockelbo, Sweden, will replace the previous facility in Alfta. Construction of the new 1250 m² facility will start in June 2019 and will be completed in early 2020. Moving the location to Ockelbo will help the new center to provide service to customers beyond the Alfta area in Sweden. The center will have a four-bay machine repair shop, a wash station, a spare parts and accessories store, a spare parts warehouse, and a conference room and social facilities for employees. The approx. 13,000 m² plot will also have a cold storage and space for new and used machines.
The plot in Laukaa, Finland, is 10,000 m2, and the customer service center will exceed 1,100 m2. All functions from the current Suolahti site will be moved to Laukaa. The center will also have a four-bay machine repair shop, a wash station, a spare parts and accessories store, a spare parts warehouse, and a conference room and social facilities for employees. There will also be a cold storage and space for new and used machines. Construction of the center has started with the earthmoving work, and the actual construction will begin in autumn 2019.
“The central locations of the new customer service centers and the modern facilities will enable more comprehensive and efficient spare parts, maintenance and training services for our customers. Occupational safety, ergonomics and wellbeing for our own employees have been a priority in the planning of the investments. A better customer experience and higher customer satisfaction will also be visible in our machine sales in these regions,” notes Janne Märkälä, General Manager, Europe Sales Operations.
John Deere Forestry Oy
Tel. +358 400 466 476
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Global trade of wood pellets jumped more than 21% year-over-year in 2018 when a new record of 22.3 million tons was shipped, according to the North American Wood Fiber Review. The five major pellet exporting countries (the US, Canada, Vietnam, Latvia, and Russia) have remained the top exporters for over five years. They accounted for about 69% of the world’s export volume in 2018.
Following the “big five” in 2018 were Estonia, Austria, Malaysia, Denmark and Germany, in descending order. Pellet production in the US South continued at record pace in, driven by a European move away from fossil fuels and towards renewable energy. From the 1Q/18 to the 4Q/18, exports from the region were up almost 50%, further manifesting US’s role as the world’s largest producer and exporter of wood pellets, reports the NAWFR. The United States ships practically all its pellets to three countries: the United Kingdom, Belgium and Denmark. Only a small share of the pellet production in the US is consumed domestically.
Demand for imported pellets in Japan and South Korea continued a three-year growth trend in the 4Q/18 when import volumes reached new record highs of 339,000 tons and 993,000 tons, respectively. In 2018, the total annual import volume for the two countries was just over 4.5 million tons, more than doubling in just two years. With the increased trade, prices for pellets landed in both Japan and South Korea have moved upward over the past three years.
In the 4Q/18, the price for pellets imported to Japan averaged $182/ton, up almost six percent from the 4Q/17. Pellet import prices to South Korea, which were nominally lower than those in Japan, rose almost 25 percent during the same period. The lower average cost for South Korea can be explained by that country’s reliance on pellets from low-cost countries in nearby Vietnam and Malaysia. This is unlike Japan, whose major pellet supplier is British Columbia, a more expensive producer of high-quality FSC and SFI certified pellets.
Source: Wood Resources International LLC, www.WoodPrices.com
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released the ABARES National Wood Processing Survey: 2016–17 report on Thursday 13 June 2019. Although maybe already out of date (it does though provide broad trends over a ten-year period), key findings from the survey include;
ABARES estimates that a total of 299 mills (excluding value-add only) operated in 2016–17, comprising 182 hardwood sawmills, 58 softwood sawmills, 23 wood-based panel mills, 19 post and pole mills and 17 cypress pine sawmills.
The number of sawmills in Australia has decreased significantly since 2006–07, with hardwood sawmills decreasing by 64 per cent and softwood and cypress pine sawmills by 31 per cent. The volume of hardwood and softwood sawlogs harvested for domestic processing has also decreased by 38 per cent and 2 per cent, respectively, over the same period. However, the decline in mill numbers has slowed since 2012–13 and total sawlog processing volumes have increased.
In 2016–17, a total of 10.63 million cubic metres of sawlogs was processed in Australian sawmills, which comprised 1.91 million cubic metres of hardwood sawlogs, 8.58 million cubic metres of softwood sawlogs and 147,000 cubic metres of cypress pine sawlogs.
A total of 4.71 million cubic metres of sawnwood was produced in 2016–17, comprising 742,000 cubic metres of hardwood sawnwood, 3.91 million cubic metres of softwood sawnwood and 57,000 cubic metres of cypress pine sawnwood. In 2016–17 an estimated 280,000 cubic metres of posts and poles and 1.79 million cubic metres of wood-based panels was produced.
An estimated AU$2.48 billion of revenue was generated in 2016–17 from the sale of sawnwood processed in Australia, comprising AU$930 million from hardwood sawnwood sales and AU$1.55 billion from softwood sawnwood sales.
ABARES estimates that Australia’s sawmills and post and pole mills employed 8,029 people in 2016–17, of which around 89 per cent were full-time workers (including managers and owners). Males accounted for around 90 per cent of the workforce. Wood-based panel mills employed a total of 2,390 people in 2016–17.
Key to the early stages of the project is the construction of a new electrical substation for the town of Tarpeena. This is expected to improve the reliability of electricity supply for the township with all new hardware, modern design features and more reliable components.
The mill upgrade, to be completed in 2021, will increase both the volume of renewable plantation pine logs that can be processed and the yield per log. This will transform the mill into a workplace of the future, with high tech machinery improving accuracy, safety and job security. Timberlink is committed to training and upskilling our staff to run the new machinery and there will be no job losses as a result of the upgrade.
Around 20% of Australia’s softwood timber is imported, and to ensure Timberlink remains internationally competitive, the business is expanding and investing in new technologies to improve efficiency and create more structural timber for the domestic market. The investment includes a completely new saw line, the installation of a new stacker and edger, coupled with addition of a contraflow kiln and a new batch kiln for drying timber. A new drying shed will also be built as part of the project.
The Timberlink Tarpeena mill supports 680 direct and indirect jobs in the area whilst contributing over AU$180m to the local economy. This generational investment will create 200 jobs in the construction phase and secure the 210 permanent full-time jobs at the mill for the next generation. The AU$90m Tarpeena upgrade project will source the best technology from around Australia and the globe to ensure that Timberlink remains an essential supplier to the construction industry in Australia, whilst securing jobs and futures for many families in the Mt Gambier region.
Based in Perth, Cate will focus on providing after-sales technical and operational support to Tigercat’s growing customer base in Western Australia.
He previously worked for New Zealand Tigercat dealer, AB Equipment, as a field service technician and has a strong background in engine reconditioning. Cate has a variety of practical experience with the Tigercat product-line and has completed Tigercat training related to skidders, harvesters, track carriers and forwarders.
“Nick brings excellent hands-on technical skills to the Tigercat team with experience that will help us support and grow Tigercat’s customer base in Western Australia. Nick is a valuable addition to the support team and we are very happy to have him onboard,” says Glen Marley, Tigercat district manager for Australia and New Zealand.
After recently visiting the Tigercat factory Nick appreciates how Tigercat cares for its employees and how the company takes that same care all the way to its customers in the field. Nick explains why he is excited to work for Tigercat stating, “Tigercat is one of the superior brands in the forestry world. The company is always trying to improve, and takes customer ideas seriously.”
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At SkogsNolia 2019, Komatsu Forest launched an upgraded product range, with the majority of the machines new 2020 models. The machines are equipped with a brand-new engine installation conforming to the latest emission legislation. The new, future-proof control system, MaxiXT, was also launched.
Alongside these, the company presented a number of quality improvements and new functions to simplify day-to-day tasks for machine operators and to increase profitability. These include the new MaxiVision service, which takes production planning to a whole new level.
All 2020 harvester models have been upgraded, from the agile Komatsu 901 thinning harvester through the bestselling eight-wheel Komatsu 931XC to the stately Komatsu 951. Among the forwarders, the three largest – the Komatsu 855, 875 and 895 models – have been upgraded.
One standout feature is the brand-new engine installation, which conforms to the latest emission legislation (Stage V). It also offers many other benefits, such as an all-new AdBlue system, a new exhaust system and hydraulic tappets. Despite the new, larger engine installation, the machine boasts the same slim design with good all-round visibility and views – right down to the wheels.
Another new announcement is the MaxiXT control system, the machine’s nervous system, controlling everything from the engine to the crane and the head. In connection with this, the Automatic Central Lubrication option is now integrated with MaxiXT, making it easy to monitor from the cab. What’s more, on harvesters the grease tank has been doubled in size, meaning less refilling for the operator. MaxiXT brings with it improved anti-theft measures as the operator must log in to the system to start the machine, or else use a remote key with a unique operator ID.
Yet another added feature is the ability to record signal sequences to send to support, for simpler and speedier troubleshooting.
As for the forwarders, they have been upgraded in a number of areas. Smaller but important details, such as better wear plates on the front blade, longer wiper blades on the side windows and less reflection from the gate. A much-requested new forwarder feature is the SpeedShift option – a smart solution that enables the operator to use the machine’s full speed range without having to stop to change gear. This makes travelling to the landing faster and, as the collapsible steering wheel has been replaced with a handy mini steering wheel, driving there is also more straightforward.
Another new addition is the Overspeed Protection option, protecting key transmission components from over-revving.
On the harvesters, offroad manoeuvrability has been improved in several areas. Parts of the rear axle have been redesigned, providing higher ground clearance and making it easier to tackle steep ditches and other obstacles in challenging terrain. On top of this, both the tractive force and the power steering have been refined, improving offroad manoeuvrability and increasing productivity. Harvester operators will also notice a large number of additional storage spaces, as well as practical finesses such as a portable lamp to better facilitate servicing.
Moving on to the heads, there is the new Komatsu C164, which is a perfect match for the Komatsu 951. This head is based on the same technology as the C124 and C144 models, with the stem held up by the feed rollers and the delimbing knives used primarily for delimbing. The head has four powered feed rollers and the Constant Cut function, ensuring an even cutting speed throughout the cutting cycle.
In addition to the new machine features, a brand-new service – MaxiVision – was launched as part of MaxiFleet. MaxiVision helps the operator to visualise the current state and conditions of the forest. Different map views provide the operator with data about ground conditions and the rest of the team’s production, enabling them to plan their work as efficiently as possible and with minimal forest impact. Since the service is cloud-based, updates occur in real time and any changes are immediately seen on-screen in the cab.
The 2020 models were launched in conjunction with SkogsNolia in mid-June.
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Komatsu Forest launches MaxiVision, a new digital tool that helps the forest machine operator to visualise the state and conditions of the forest.
Different map views provide the operator with data about ground conditions and the rest of the team’s production, making it possible to plan the work as efficiently as possible and with minimal forest impact. Since everything is cloud-based, updates occur in real time and any changes are immediately seen onscreen in the cab.
With MaxiVision, the operator can combine maps of the area with the latest data on ground conditions into a single image and, at the same time, see both the own production data and that of the colleagues – all updated in real time. The work overview is a great tool for planning production and enables the operator to make well-founded decisions. MaxiVision also allows for effective collaboration between harvesters and forwarders as each team member can see what their colleagues are doing.
The MaxiVision service not only offers team members a good overview of each other’s work, but also helps to facilitate communication between operators. By sending messages to each other or marking particular areas on the map collaboration can be improved and the outcome likewise. This unmatched integration between harvester and forwarder provides an optimised workflow and increased productivity.
Komatsu Forest is one of the world’s leading manufacturers of forest machines. The company sells its products all over the world and is wholly owned by the Japanese company Komatsu Ltd.
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Western Forest Products Inc. is the latest lumber producer to announce temporary production curtailments to deal with challenging market conditions.The Vancouver-based company says it will reduce output at three of its sawmills to align volumes with customer demand.
The Duke Point facility will be affected for two weeks and its Saltair sawmill for one week in June. Operating levels at its Chemainus sawmill will be reduced to 80 hours per week from 120 hours per week. The curtailment is expected to reduce production by about 15 million board feet.
Western has an annual lumber capacity in excess of 1.1 billion board feet at facilities in British Columbia and Washington State. West Fraser Timber Co. Ltd., Interfor, Canfor and Tolko have previously announced similar curtailments.
“The challenge of weak markets is compounded by the disproportionate impacts of softwood lumber duties on high-value products, including Western Red Cedar,” said Western president and CEO Don Demens.
On Monday, Canfor announced it will be curtailing operations at all British Columbia sawmills, except WynnWood. According to the company, the majority of mills will be curtailed for two weeks with extended curtailments of four weeks at Houston and Plateau, and six weeks at Mackenzie. Norbord Inc. also announced on Tuesday its intention to indefinitely curtail production in 100 Mile House, British Columbia in August, 2019
Photo: Western president and CEO Don Demens.
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The Robotic Scaling Machines (RSM) give a faster, safer and more accurate measure of logs on the trucks and trailers than the manual process. Tauranga-based agritech company Robotics Plus designed and built the automatic logging truck scaler using materials from several local suppliers.
Robotics Plus co-founder Steve Saunders said he and his staff worked with ISO, which came up with the concept in 2017, and came up with a final prototype in just 12 months.
“This is a technology company working with a well-established local company looking into the future to actually solve these sorts of problems. I think we need a lot more of that in New Zealand,” Saunders said. The technology was now being rolled out across the country, starting with two scalers at the Port of Napier, then Gisborne and at Marsden Pt next year.
ISO Limited’s chief executive, Paul Cameron, said the technology offers huge health and safety benefits to staff. “The robotic scaler measuring process eliminates exposure to hazards and moves those people into a safer environment,” he said.
Cameron said the existing manual system used throughout the world requires people to hand scan the logs by climbing between trucks and trailers, taking up to 40 minutes. The robotic arm passes over the logs taking between three and four-and-a-half minutes, he said.
The automated process improves productivity not only for ISO but for the entire supply chain through to the port, and has created new skilled jobs, Cameron said. More than 200 trucks are processed through the site each day, so the machine offered a huge cost and productivity saving, as well as being far safer for staff, he said.
Cameron, who would not be drawn on the cost of developing the new technology, said the benefits to the industry “far outweighed” the costs.
Local suppliers, who contributed to the development of the RSM, were RFT Engineering (structural steel); Festo Linear (guides and controllers; SICK NZ (safety systems, distance sensors); FLIR (imaging cameras); Mulcahy NZ (laser cutting); and Gamman Engineering (precision machining).
Last month Robotics Plus snapped up two awards at the 2019 NZ Hi-Tech Awards, winning the Callaghan Innovation Hi-Tech Maori Company of the Year Award as well as the NZTE Most Innovative Hi-Tech Solution for the Agritech Sector Award.
To check out a video of the new automatic log scaling, click here.
Source: nzherald, Photo: Andrew Warner
The investment will improve and expand the Joensuu factory’s assembly and test drive facilities as well as increase the component manufacturing capacity. The total amount of the investment is about 15 million euros. “This expansion will help us to better meet demand during strong economic cycles. The new space will also increase occupational safety and employee satisfaction,” says Factory Manager Janne Haapasalo. After the expansion, John Deere Forestry Oy’s production/logistics facilities will cover a total of 3.2 hectares.
GreenPark business park expanding
John Deere Forestry Oy has sold a plot east of the current GreenPark to the City of Joensuu. Joensuun Yrityskiinteistöt Oy will use the plot to build a new facility that will be used by John Deere Forestry Oy. The value of the investment is about 5 million euros. The new facility will be completed in June 2020. The GreenPark expansion will centralize the Joensuu factory’s logistics functions and further improve the logistical efficiency.
“Strong collaboration with the City of Joensuu and Joensuun Yrityskiinteistöt Oy, which manages GreenPark, as well as the shared desire to develop business in the region is of primary importance to us. The critical subcontractors operating in the immediate vicinity of the factory have a proven record of boosting the efficiency of our operations,” notes Haapasalo.
John Deere Forestry Oy
Committed to providing the forestry industry with powerful and reliable equipment solutions, John Deere is rolling out upgrades to its FR22B and FR24B Felling Heads. Compatible with select M-Series Tracked Feller Bunchers, the updated FR22B and FR24B models have been redesigned to increase durability and extend the life of the wrist and head.
“The forestry industry is challenging and pushes equipment to the limit to get the job done, making it important for manufacturers to provide reliable solutions designed for logging applications,” said Jim O’Halloran, product marketing manager, John Deere Construction & Forestry. “Our new FR22B and FR24B Felling Heads provide just that – a reliable felling solution designed with the operator’s needs in mind.”
The new felling heads feature improved flow capability, increased hydraulic hose size and routing, and updated ring gear and frame welds, all resulting in increased durability.
To learn more about the FR22B or FR24B Felling Heads, as well as the full line of John Deere Forestry Equipment, visit your local John Deere Forestry dealer or www.JohnDeere.com.
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Damien has worked with the Tigercat product since it first arrived in Australia in 2000, first with former Tigercat dealer Forest Centre, and then as a field service mechanic, service manager and branch operations manager for Australia’s current Tigercat dealer Onetrak.
“I am very pleased to have Damien join the support team for Australia. He knows the Tigercat product inside and out, is an extremely skilled and competent individual, and an excellent addition to the team,” explains Glen Marley, Tigercat district manager for Australia and New Zealand.
Damien has strong technical knowledge of the Tigercat product through his completion of various technical courses related to harvesters, forwarders, track carriers, drive-to-tree feller bunchers, skidders, harvesting attachments, and the Tigercat FPT engine.
“I have worked with the Tigercat product for many years now and I believe the company is the leading manufacturer of forestry equipment in the market,” says Damien. “I value the level of customer support Tigercat provides and I am excited to be a part of this great team.” Damien will be providing field support for Tigercat’s growing customer base predominantly across the regions of southeastern Australia and Queensland.
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Xu Xuebing began importing U.S. wood products into Shanghai two years ago, anticipating sizable profits reselling to Chinese furniture manufacturers. Then the China-U.S. trade war started. Since Beijing began to impose retaliatory tariffs on U.S. goods last year, Xu has halted imports, his profits have plummeted, and he may soon need to raise his prices just to survive—which could kill off sales for good.
Xu, who is 42 and owns Shanghai-based company Sam Wood, doesn’t mince words over who’s to blame. “Trump is so bossy and irrational, it forces us to fight back,” he said. “Even though [China’s tariffs] do harm to our economy, we strongly support Uncle Xi and China’s tough stance in the trade negotiations,” he added, using the government-encouraged term of endearment for President Xi Jinping.
The world’s two largest economies have levied tit-for-tat tariffs on hundreds of billions of dollars worth of each other’s imports since President Donald Trump launched the trade battle last year, seeking to pressure Beijing to change trade policies he calls unfair. But the impact on small- to medium-sized Chinese businesses caught in the crossfire typically gets little attention, partly because China’s Communist government suppresses bad news.
Xu, who also exports clothing to Russia and meat to Mongolia, began in March 2017 to import black walnut wood from the U.S. states of Wisconsin, Missouri and Iowa. But after the tariff slugfest broke out last year, Xu’s bottom line was ravaged by duties of 20 percent that China slapped on the rough-cut woods that he had originally imported. So, he switched to semi-finished woods, which had been hit by tariffs of only five-percent.
The trade turmoil has also driven China’s currency down, making Xu’s imports even more expensive. Overall, his import costs are up 20 percent so far this year. “Our sales target for 2018 was 50 million yuan ($7.25 million), but we only brought in 13 million yuan,” Xu said. “The trade war has had a huge and direct impact on our business.”
“That keeps me up at night,” Premier John Horgan admitted to me in an interview this week in his office. The Council of Forest Industries (COFI) has publicly stated that between eight and 10 mills could close this summer, costing thousands of jobs and devastating small communities across the province. This looming disaster is the result of a confluence of factors.
In recent years, the province incentivized companies to ramp up production and revamp mills to clear forest ravaged by the devastating pine beetle infestation. That work is pretty much done now, with the amount of timber that companies are allowed to cut annually reduced along with it. The market in the United States, meantime, which had helped B.C. companies reap record returns last year, has fallen dramatically.
Forest fires the last couple of years have diminished the amount of merchantable timber by 2 million hectares, according to the Premier. And this summer blazes in the Interior and north are expected to be the same or worse than 2017 and 2018. Some climate experts predict this is the new normal. Meanwhile, a government plan to protect caribou herds would also severely restrict logging, and stumpage rates charged by the province are scheduled to increase on July 1.
Mr. Horgan doesn’t deny that there could be closings and tough times ahead, but he doesn’t believe government is in any way to blame. “I don’t feel any ownership for the crisis in the forest industry nor should I,” he said.
While the looming problems are partly the result of factors outside anyone’s control – forest fires – Mr. Horgan and others believe the industry must bear some responsibility for the situation. For years now, forest companies have been shipping two-by-fours out the door and getting the best price possible for them. That was being done, however, against the advice of many who saw writing on the wall and believed the industry needed to be transitioning from a volume-based model to one favouring value instead.
“Some companies have taken decisions recently that are going to be devastating for some communities and we need to be prepared for that,” Mr. Horgan said. “There is no magic solution to overcut and under supply of fibre. We need to find ways to take the fibre we have and do more with it. On the coast, we’ve been exporting logs at an unprecedented rate”. More >>.
For further coverage of the projected downturn click here.
Check out this link for a list of mills that have either closed or have cut back on their production.
Current MD John Sergeant will remain in an executive capacity and will continue as a director while Mr Lamb takes overall responsibility for the next phase in the Company’s transition to profitable and sustainable operations.
KIPT chair Paul McKenzie said Mr Sergeant had piloted the growth of the Company from a sub-scale timberland owner, with a mixed collection of stranded assets, to a sustainable producer of quality timber, poised to deliver a significant infrastructure project.
“During that time, KIPT’s market capitalisation has grown from AU$3 million to about AU$120 million. We thank John for his stewardship of the Company and we are glad that he will continue to assist in the next stages of the company’s development.”
He said Mr Lamb was one of the most respected forestry professionals in Australia, “with a history of deploying institutional capital to create value for forest owners, and with a genuine commitment to the role that forestry can play in building resilient and prosperous regional communities”.
“He is the right person, at the right time and we are proud to have him as the new leader of the business.” Mr Lamb was Director of Operations and Portfolio Manager for New Forests Asset Management from 2005 until 2017, with responsibility for AU$2.5 billion in timberland and related agricultural and industrial assets, including the blue gums on Kangaroo Island later bought by KIPT.
Mr Sergeant would continue to be involved in the current development approval process, enabling Mr Lamb to focus on the company’s medium to long term growth.
Keith Lamb, left, and John Sergeant at the MacGIll Plantation.