Wood Will Be The Norm in Mid-Rise in 2030

Transcription

1 Wood Will Be The Norm in Mid-Rise in 2030 Here s The Pathway Marty Verry Group CEO Red Stag Timber - Investments

2 Today: 1. Quantify the mid-rise opportunity 2. Does wood stake up? 3. Impediments in NZ 4. Red Stag - projects & promotion 5. Industry Role 6. Government Role 7. Trends affecting sawmillers

3 Opportunity? AU Market Analysis Report: If wood wins 10% market share, this will mean $750m revenue per year in wood products. Equating to New Zealand: (assuming one-fifth size of AU) If wood wins 10% market share, this will mean an extra $150m revenue per year in wood products. So 25% market share would be worth $375m That s equivalent to current value of New Zealand s structural timber market So even at 25% market share, we could double the size of our structural timber market.

4 Does Wood Stack Up?: Quantity Surveyor Analysis Frame Australia Residential 7 storey (5,500m2): 12% lower structure cost 6 weeks faster Main savings on P&G (crane time) Commercial (13,500m3): 8% lower structure cost 9 weeks faster Overall project savings: 3-4%

5 Strongbuild - Macarthur Gardens (CLT): 5 staff on structure, instead of months instead of 18 months 1.5-3% cheaper overall 50% less waste

6 Lendlease - C2 Building, Sydney (CLT & Glulam): 8 people constructing, instead of days per floor Zero injuries (3 CLT projects 0 injuries)

7 2030 Wood Will Be The Norm in Mid-Size Buildings in New Zealand

8 Systematic Pathway to Reality First, What s Preventing Uptake? - 9 Key Objections: 1. How do the costs compare? 2. What are the speed and staffing advantages? 3. Who can supply and is there competition? 4. Who are the construction firms, architects, QSs and engineers with the expertise? 5. Can I visit buildings, including under construction? 6. What do purchasers/tenants think of living/working in mid-rise wood? 7. How do the designs tackle earthquake, fire, acoustic, thermal and cladding/moisture concerns? 8. What are the environmental benefits, including CO2, wastage and truck movements? 9. Will the council sign off the plans?

9 We need New Zealand answers to all these objections, to prevent plans in wood ending up in the too hard basket Anyone along the chain can send it there: architect, engineer, developer, builder, quantity surveyor, real estate agent, banker

10 Red Stag Reference Projects: Step #1: 5 Storey Apartment Block Clearwater Resort - Christchurch Pre-agree with professionals and contractors involved make all information designs and costings public for others to share. Structure - Value Engineering: CLT: Floors Lift shaft & stairwell Glulam portals Framing timber - prefabricated exterior braced panels

11 Step #2: Commercial 7-12 Storey North Island RJ Holdings ->

12 Step #3 Publish & Promote 1. Measure Time 2. Measure Costs everything 3. (including comparative cost of steel/concrete option) 4. Document everything - including detailed designs 5. Collate everything 6. Publish & Promote through Case study booklets Seminars / Conferences / Site visits Investor briefings Construction company briefings Professional briefings (engineer/architect/qs) Web publish PR / Social Media

13 2017 >>>>>>>>>>>>>>>>> Case Studies - Publish - Promote - Design Guides - NZ Wood Solutions - Industry Promotion Government Role: Procurement Standards -Regulation Co-Funding Log Certainty CLT 3-4 plants Prefab plants: Specialists + Extended F&T Construction Firms - 10 specialist - All experienced CLT - 1 Prefab Plants 2? Construct Firms 1? Specialist engineers 0 Specialist developers Specialist engineers - dozens Specialist developers - dozens Specialist architects - dozens Specialist architects Open source designs Open source designs - All key details & reports to get BC

14 Government Procurement Wood First Pre election - lobbied hard Labour, NZ First, Maori Party & Greens, Nat back-benchers support Joyce s Objection: Reluctant to pick winners Backed off Could see market about to get too busy. In the meantime: Government support for electric cars has set a precedent. Picking winner (electric) over petrol/diesel for environmental reasons. Looking Forward: We need proof - answer the 9 Objections, case studies Develop the competence - professionals & builders Develop the supply base New Ministers: o Simon Bridges (MBIE), Paula Bennett (Climate Change), or o Jacinda Adern on Climate Change: This is my generation s nuclear free moment BUT: can t just plant trees need to create demand for wood

15 Other Government Role - Assurance Scandals: concrete, steel mesh, pipes, wiring and timber MBIE s oversight has been slack We re the wild west!

16 When Assurance Fails.

17 An Example: J-Frame LVL Timber Mislabelled H1.2 (fully treated) No Envelope warning label MBIE did nothing - Commerce Commission agreed Still Mislabelled! CodeMark issued without decay efficacy proof Still on sale!!

18 Assurance Trust is massive, especially in mass timber buildings News of rotting mid-rise buildings would hit the media and destroy this fledgling industry How can we have confidence to invest tens of millions of dollars in plants to manufacture these products? How can we ask others to build mid-rise in wood?

19 Other Trends - Sawmill Consolidation AU NZ

20 2006 Jan 2006 Apr 2006 Jul 2006 Oct 2007 Jan 2007 Apr 2007 Jul 2007 Oct 2008 Jan 2008 Apr 2008 Jul 2008 Oct 2009 Jan 2009 Apr 2009 Jul 2009 Oct 2010 Jan 2010 Apr 2010 Jul 2010 Oct 2011 Jan 2011 Apr 2011 Jul 2011 Oct 2012 Jan 2012 Apr 2012 Jul 2012 Oct 2013 Jan 2013 Apr 2013 Jul 2013 Oct 2014 Jan 2014 Apr 2014 Jul 2014 Oct 2015 Jan 2015 Apr 2015 Jul 2015 Oct 2016 Jan 2016 Apr 2016 Jul 2016 Oct 2017 Jan 2017 Apr 2017 Jul 2017 Oct 2018 Jan 2018 Apr 2018 Jul 2018 Oct Detached Building Permits Per Mnth Immegration/Emmigration Per Month Structural Supply to Exceed Demand = margin squeeze until rationalisation Detached House Building Permits vs SRA Forecast, House Sales and Migration Monthly Building Permits Average Building Permits Average House Sales Leading Indicator 2,750 Rodney Dickens' Forecast Nov 2016 Average House Sales Leading Indicator V2 Average Migration Leading Indicator ,500 2,250 2, closures: Blue Mountain, Lakesawn Putaruru, Kopu , ,500 1,250 CHHWP: 2 mills making 15% is better than 3 making 5% , Quarter

21 CNI Supply vs Demand For Pruned Logs Tonnes Supply Demand Current tree age

22 2030 Wood Is The Norm In Mid-Rise Buildings in New Zealand