Forest Products Industry

New Zealand’s pulp and paper industry has lost a pulp mill and could lose another to an energy crisis that shows little signs of abating. Source: IndustryEdge The Winstone Pulp International (WPI) pulp mill on the Central North Island will close permanently and cease manufacturing Bleached Chemi Thermo-Mechanical Pulp (BCTMP) immediately. A second pulp mill, the recycling mill owned by Oji Fibre Solutions at Penrose in the Auckland region, has been proposed for closure by the end of the year, citing energy costs as fundamental to the expected decision. The Penrose mill employs around 75 people and is the sole fibre recycling facility in New Zealand. Oji was quick to point out that its extensive collections would continue, the fibre being shipped to other Oji recycling mills, including most likely the Malaysian operation. IndustryEdge’s long experience in the pulp and paper industry reminds us no manufacturer likes closing facilities, including because of the impact on the workforce and their families and livelihoods. That means the situation is serious, so, how did it come to pass? Pulp, paper and energy At a facility level, and also at a national level, there is no escaping the fact that manufacturing the world’s paper, paperboard and fibre packaging products is energy intensive. Though energy is used throughout the process of manufacturing pulp and paper, some operations can be self-sufficient for thermal (heat) and electrical energy. These are mainly the chemical pulp mills, where one of the by-products of circular manufacturing and the recovery of chemicals, is abundant energy. Other facilities are however less self-sufficient, but still energy intensive. This is the case for the WPI mill, which uses energy to produce a ‘mechanical’ pulp and has limited thermal and even less electrical energy outputs. The situation is even more severe for Oji’s Penrose recycling mill, which has little to no capacity to recover or create energy. These facilities are essentially stand-alone energy-sinks and are far more vulnerable to energy price rises than other pulp and paper mills. Couple that with the vulnerabilities created from selling into global commodity markets where ‘the price is the price’ and we can easily see there is also no opportunity to recover higher energy costs. Especially when those costs have increased 600% over three years! Energy prices exploded in NZ – whats going on? New Zealand’s energy prices have increased a widely reported 600% over the last three years, from around NZD100/MWh to NZD700/MWh in early August. How could that possibly happen? There is no easy answer to this question, but its enough to say it’s a complex mix of too much reliance on a single source of electricity (hydro), insufficient gas to supply domestic industry and a zealous approach to create electricity markets that in their design appear to have been short on what should have been the real objective: supply sufficient electricity to meet the nation’s needs! We’ll take these in turn. Over-reliance on hydro It is important at the outset to note that the forestry and wood products industries, including the pulp and paper manufacturing sector, are among the fiercest advocates for renewable energies, whether biomass, wind, geo-thermal, chemical, solar, hydro or other. That said, we think it reasonable to say that perhaps New Zealand has been overweight hydro-electricity for a VERY long time. The chart below shows the last fifty years of New Zealand’s energy generation and the dominance and importance of hydro over all time periods. From an astounding peak of 83.7% of total electricity production in the DQ75 (that’s the oil crisis), through to a low of 45.6% in JQ08 (due to a drought), hydro has ruled in New Zealand. NZ Electricity Production by Type: MQ74 – MQ24 (Proportion) In many respects, hydro has been the cornerstone of the New Zealand economy, and has led it to be a country in which renewables have averaged more than 80% of all electricity supply, delivering 85.7% of total electricity in MQ24, for instance. The long run advantages of that difference to countries like Australia are not insignificant, but they also do not come without risks. As was evidenced in 2008 when there was an extended drought, the reliance on one energy source alone, left New Zealand’s domestic economy vulnerable. Since then, a concerted effort has been deployed to introduce new forms of electricity generation. Geothermal has expanded dramatically, as has wind, while gas by contrast, has contracted its share of total electricity supply. Changes in the energy mix focussed on more renewables because gas, coal and oil place a heavy carbon burden onto an economy which has operated without them for so long. It seems it is not the reliance on renewables that has caught New Zealand out so sharply most recently but it is in part, the reliance on hydro that has left it vulnerable and seen prices rise very sharply. Despite the current drought, hydro contributed more than 55% of New Zealand’s electricity in MQ24. Gas is in retreat The second chart shows the growth rates, over the last 40 years of the four major electricity sources. It is remarkable for some important reasons. First, because no sooner was it introduced and wind energy exploded, literally, off the chart (see the arrow). Second, because geothermal has grown four-fold in the last twenty years. Third, because hydro has consistent, seasonal ups and downs but has been relatively stable over the full period. Fourth, because gas fuelled electricity supply has halved over the last decade, compared with the average of the previous decade. NZ Electricity Production by Main Type: MQ84 – MQ24 (INDEX) Wholesale energy prices in New Zealand increased by 600% from September 2021 to August 2024, hitting NZD700/MWh in early August, albeit falling back to NZD450/MWh as this analysis was being prepared. In a balanced supply, as the renewables drop off for natural occurrences (droughts, for instance), we could anticipate a shift to gas, as peaking or replacement capacity. That cannot occur in New Zealand because it does not have sufficient gas, and […]

The Softwoods Working Group welcomes the recognition by the NSW Government in the need for a ‘step change’ in approach and better cohesion in responding to invasive weeds and pests.  Source: Timberbiz The Minns Labor Government’s commitment to addressing biosecurity threats is evident in the release of the Natural Resources Commission’s (NRC) preliminary report, ‘Reducing Risk, Securing the Future – NSW Invasive Species Management Review.’ The Group appreciates the focus on invasive species management and recognises that continued research and funding are essential to safeguarding the state’s landscapes and industries. Invasive species, including the persistent issue of blackberries, present significant challenges to the region, limiting economic growth and impacting local jobs, Gross Regional Product (GRP), and household incomes. The softwoods industry is a major contributor to the region’s prosperity, and addressing these biosecurity threats is vital to unlocking the area’s full potential. “The Softwoods Working Group and its members are absolutely dedicated in finding a solution to the Blackberry challenge as well as other invasive species and pests for our region as it affects not only the plantations, but all forms of land management activities.” Chair of the SWG Peter Crowe said. The Group is encouraged by the Minns Government’s funding allocation in this year’s budget for biosecurity, as well as the additional funds to rebuild essential research infrastructure. The Softwoods Working Group looks forward to continuing collaboration with the government, industry experts, and stakeholders during the consultation phase, and anticipates further progress on addressing the impacts of invasive species across the state. “We extend our thanks to the Minister for Agriculture, Tara Moriarty, for her commitment to combating invasive species and ensuring that biosecurity remains a top priority,” SWG executive Carlie Porteous said. Key highlights from the NRC preliminary report include: The escalating cost of invasive species, which has surged from $661.2 million in the 2000s to $1.9 billion in 2022-23. The potential for biosecurity threats to cost the state $29.7 billion annually by 2030 if immediate action is not taken. Initiatives such as the Feral Pig Program, the Good Neighbour Program, and updated pest and weed management strategies aimed at reducing the impact of invasive species. The Softwoods Working Group is committed to working alongside the NSW Government to protect the region’s environment, economy, and future prosperity. You can download the report here.

The timber and forest industry has celebrated the life of well-known career forester Peter Hopkinson, who passed away recently, aged 94. ‘Hoppy’ as he was affectionately known served for almost four decades with the NSW Forestry Commission. Source: Timberbiz Hoppy was well-known in the industry for his service to forestry on the Mid North Coast and in the Northern Rivers and Central West. Continuing the family legacy, Peter’s son Glenn Hopkinson followed in his father’s footsteps. Glenn, who has worked for Forestry Corporation for the past 28 years, said the family wished to thank Peter’s many friends, who have passed on their thoughts and well wishes. “Dad was born in Sheffield, Yorkshire and came out to Australia with a mate in 1950 as a Ten Pound Pom,” Glenn said. “He kept the original newspaper clipping that he saw in England advertising the need for manual labourers to emigrate from the UK to Australia to help the nation grow. “After working on a sheep station near Warwick, Queensland, Dad settled into a career in forestry with the NSW Forestry Commission,” he said. Peter was appointed to the position of temporary forester and after he finished his studies became a forester with the NSW Forestry Commission in 1964 where he was placed in charge of surveys at Wauchope. In 1970, Peter transferred to Oberon and then to Casino in 1972. He later returned to Wauchope in 1975 where he remained with the Commission until his retirement in 1988. Testament to the mark that Peter made in forestry, a landmark was named in his honour – Hoppys Lookout, near Yarrowitch. “Dad came across the vantage point a few years before he retired from forestry,” Glenn said. “They were putting in a road between Hastings Forest Way and Spokes Mountain Trail, which runs off Racecourse Trail about an hour and half drive from Wauchope when they discovered this spot. “It is such a scenic vista, looking back to Walcha, taking in the Macleay Valley with views right back to Kempsey. “It was virgin forest back then and Dad did the preliminary survey work constructing a trail to the area around the lookout. “His boss John Mills put forward a request to name the lookout after Dad. “The site was later transferred over to National Parks and Wildlife and the decision was made to keep the name Hoppys Lookout. “Nowadays there is a good, fixed track up there where you can walk up the hill to enjoy the view. “We took Dad back to the lookout a few years ago, which was special, and I think we might head up as a family and celebrate Dad’s life. “It was a place that Dad loved to visit, sitting and taking in the view,” Glenn said  

Trans-Tasman forestry and sawmilling company OneFortyOne has released its Annual Review for 2024 highlighting progress, resilience and continuous investment, underscoring the company’s commitment to sustainable practices and operational excellence. Source: Timberbiz “Since 2019, OneFortyOne’s Annual Review has been an opportunity to reflect on the year that was and the path forward,” OneFortyOne CEO Wendy Norris said. “Our journey towards a better tomorrow is not just a strategic priority but a core part of our identity and ambition.” Now in its 12th year of operation OneFortyOne has continued to build on its strong foundation, delivering sustainable growth and value to stakeholders. Ms Norris expressed her pride in the company’s achievements. “Our team members and partners have been the driving force behind our performance this year,” she said. “Their efforts have supported each other, our customers, and our communities, demonstrating the resilience and commitment that define OneFortyOne.” OneFortyOne’s commitment to safety remains paramount. Significant capital investments have been made at the Jubilee and Kaituna Sawmills to enhance safety measures. The company has also focused on strengthening a culture of safety leadership and care, ensuring that every individual feels safe to raise concerns and address wellbeing matters promptly. “Our primary objective is to ensure that every person comes to work and goes home safe and well every day,” Ms Norris said. “We have made substantial investments in safety and are continuously working to build positive cultural conditions that support this goal.” The company’s dedication to community is exemplified through its Pine Community Grants Program and long-term partnerships supporting diverse projects in science, education, and nature. Surveys conducted with recent grant recipients have provided valuable insights into the impact of these grants, helping organizations achieve both short-term and long-term project goals. Despite challenging market conditions, OneFortyOne remains committed to its investment program, focusing on long-term growth and sustainability. “We are here for the long term,” Ms Norris said. “I extend my gratitude to our people, our Board, contractors, partners, and customers for their exceptional dedication and support. Together, we are making a significant impact and paving the way for a better tomorrow.” Download the Annual Review here.