NEWSLETTER. Summer 2016 IN THIS ISSUE: Forest Management GROUP

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1 Summer 2016 NEWSLETTER IN THIS ISSUE: The Closing of Selwyn Sawmill Our new head office Establishment Update Case Study: Gibbons Forest Farewell and welcome Forest Management GROUP

2 Introduction FROM THE DIRECTORS Welcome to the Summer edition of our newsletter. The recent earthquake in North Canterbury brings back bad memories for those of us that live in the Canterbury region. The potential long term impact on Kaikoura could be very significant. Our industry also faces major disruption with an uncertain future for the Kaikoura sawmill Prime Pine and for the port of Wellington. Beard logging extracting logs in Northern Hawkes Bay. On the plus side the forestry industry is in good shape with log prices remaining firm on the back of good export demand and local mills that are hungry for all log grades. On top of the positive returns for timber is the rebirth of the ETS. NZU prices are predicted to continue to firm to around $20 by year end, and the scheme now has political support. Commencing in 2017 the 2 for 1 deal is phased out over 3 years, thereby doubling the market. The combination of timber and carbon gives forest returns a real boost, making forestry a very attractive land use on a yield basis. This is manifesting itself into a planting boom and already FMG has confirmed a planting programme of over 1,000,000 seedlings for The ETS still creates confusion among forest owners and as such the linkage between carbon returns and harvesting needs to be fully understood before making the decision to log trees. If you want to know more, feel free to get in touch. 2 Forest Management Group

3 The closing of SELWYN SAWMILL After 78 years of trading, Selwyn Sawmills Ltd in Hororata has finally had to turn off the saws. The family business, which has seen four generations of owners employed at the Hororata site, and hundreds of local people besides, has finally shut down. Unfortunately, it wasn t their decision; they ve been forced to close their doors due to restrictive Health and Safety demands from Worksafe and a significant shortage of structural grade sawlogs after the 2013 storm. Operations Manager, AJ Halliday says it has been a very difficult decision to make, especially as the decision is based around the perception of safety and not actual safety. We whole-heartedly endorse Health and Safety in every practical sense and have an excellent safety record, but we have some real challenges with our physical site and trying to retrospectively but efficiently fit guarding to machinery it s a very complex and difficult situation that we unfortunately haven t been able to find a solution for. Obviously it has been an extremely emotional time considering the hard work that my great grandfather, grandfather and father have put into this business. We have some intriguing old footage of logging in the bush in the 1950s and it is very poignant going through all the old photos from 1938 and through the decades, seeing the development of the Hororata site. We have wonderful staff, some of whom have worked here for 30 years, and it is really their loyalty and hard work that has contributed to the success of the business. Logging at Steeles Road circa 1945 They don t make chainsaws like this anymore Summer 2016 Newsletter 3

4 OUR NEW OFFICES As you re probably aware we have now moved into our new premises in Sockburn. It didn t happen overnight and the following photos give you an idea of the building process. We ve only been here a few months but it already feels just like home. Oct 2015 Nov 2015 Dec 2015 Feb Forest Management Group

5 March 2016 April 2016 Our New Offices! Nov 2016 Summer 2016 Newsletter 5

6 Establishment update The 2016 establishment programme has now been completed with the lower South Island release spray programmes being completed over the next few weeks. Conditions at the start of the season were worryingly dry and caused a delayed start by a few weeks in June. Some rain in July/ August enabled a combined total of approx. 250ha. to be planted in Canterbury. All up, good Spring rains (25mm+/week) have benefited all seedlings planted over winter. Looking ahead to 2017, the establishment season looks to be in excess of a combined total of 750ha. This is seen as the direct result in the strong carbon price of around $18/NZU and successful outcomes of the 2017 AGS funding round. AFFORESTATION GRANT SCHEME Forest Management recently had all AGS (Afforestation Grant Scheme) applications approved, resulting in approx. 350 ha now being prepared for establishment next winter (2017). The AGS is a funding programme designed to help establish 15,000 ha. of new forest between 2015 and For more information on the AGS please contact Forest Management Ltd to find out more about the funding, key dates and how to apply. (Next funding round for AGS 2018 applications is expected to open in April 2017). Aerial desiccation in North Canterbury 6 Forest Management Group

7 CASE STUDY The Gibbons Family Burson s Hauler crew working in Gibbons, Coopers Block, Tutaki Forest At the top of the South Island is a large area of trees owned by the Gibbons family and managed by Kent Gibbons. Kent has been working directly Forest Management Group, specifically Tasman Forest Management for some time. The relationship started off with Kent buying logs from Glenn through Waimea Sawmillers. After some trade, FMG then started managing the harvesting around According to Kent, FMG have been harvesting their trees for 10 years but the connections have been going for some 15 years. At the end of the day it s about honesty and trust says Gibbons. Sawmilling goes through good times and bad, but it always comes down to affordability and being realistic. And that goes hand in hand with being accommodating and understanding. That s why we continue to work with Forest Management Group Having a good relationship is one thing, however there s no substitute for being reliable and damn good at what you do. Of late FMG have been working on 800ha of forest in Murchison. It s around 2 years in tough terrain, difficult roading, and steep country. But you gotta hand it to them, we ve had no accidents, no environmentals, we ve made money and the crews have all been sustainable. There s not many forestry companies that can make those claims, especially in those conditions. Summer 2016 Newsletter 7

8 FAREWELL AND WELCOME We recently had to say farewell to a stalwart of the forestry scene in the lower North Island, Gary Connolly. Gary has been with FMG for 8 years but has been in the industry for over 40. He started off life as a ranger trainee with the NZ Forest Service. No one quite knows the details about his early years but he flew through the ranks in the forest service, spent some time at Timberlands and ended up at Carter Holt Harvey. He even ended up selling orchids at some stage that s right, the flowers. Unfortunately it ended up being a total disaster, but on the flipside he did learn something: don t do that again! Gary s next venture is to work for a logging contractor in Marlborough. While we farewell Gary Connolly we also welcomed some new staff into the team: Andrew Luff (Harvest Manager based out of Oamaru), John (aka JJ) Rasmussen (Harvest Manager based out of Feilding), Jana Dobosova (Commercial Services Co-ordinator) and Pat Bonis (Forest Procurement Manager Hawkes Bay. Actually Pat has been working with us as a contractor for around 10 years but he s finally come on board as a full-time staff member. Welcome!) It was when Gary was the wood procurement manager at Carter Holt Panels that he started working with FMG again, and soon after he joined the team. Gary s saying is cut to the chase. It d be fair to say that there s no beating around the bush when it comes to conversation with the man. A hunting enthusiast and passionate bushman he ll be sorely missed the by the team. Gary Connolly Forest Management GROUP As we head into Christmas, the FMG team wish everyone a safe and happy festive break. FOREST MANAGEMENT LTD PO Box 3718, Christchurch Head Office Ph: (03) TASMAN FOREST MANAGEMENT LTD Marlborough Ph: (03) Nelson Ph: (03) FOREST MANAGEMENT (NI) LTD Wellington Office Ph: (04) Napier Ph: (027)