36 | T T Richard Loader Matching production with demand Over the last few years CFGNZ has had a focus on offering more wood to the local mills. FORESTRY China Forestry Group New Zealand: NZFOA 07 577 7600 | info@iso.co.nz | iso.co.nz ISO Limited is an international port logistics company providing innovative Stevedoring, Marshalling, Warehousing, IT and total supply chain solutions to port industries throughout New Zealand and Australia. ISO LIMITED A QUBE COMPANY PROUDLY TRANSPORTING LOGS FOR CHINA FORESTRY GROUP NZ Like many of New Zealand’s corporate forest owners, China Forestry Group (CFGNZ) has weathered a volatile market during 2023, navigating challenges within both the domestic and export markets coupled with the aftermath of Cyclone Gabrielle. “2023 has been a unique year where both the domestic and export markets have been volatile,” says CFGNZ’s Northland Regional Manager Matt Pedersen. “At a domestic level, some mills are doing very well, while others are not and that just depends on what part of the building industry they supply into. Because of the downturn in new homes being built, those mills that are more export focused with value-add products have weathered the storm better than those supplying the domestic construction sector.” Matt acknowledges that volatile markets add stress to the management of forests at an operational level but says like all corporates that harvest year-round, it is the averages that matter, not a particular month’s harvest. “If the markets are exceptionally low, we might drop to eighty percent of our planned production, and put everyone on a four-day week for a month, but we never shut the gates. “We have an obligation to keep the mills working, and we also have an obligation to keep everyone in the supply chain ticking away, at least at a baseline level. Regardless of what is happening in the export market, the domestic sawmills still want wood.” Matt says that over the last few years CFGNZ has had a focus on offering more wood to the local mills, almost as a first right of refusal, before going to the export market. “The Northland region tends to average about twenty percent to domestic supply, but that varies between forest localities within Northland. I always tell the mills, if you need the wood, let me know and I will ensure you get it. As much as we can, I would never let a domestic mill run out of wood.” Whether directly or indirectly, Cyclone Gabrielle has had an impact on every forest owner in the North Island with repercussions still being felt, explains Matt. “While there was likely to have been pricing volatility in a volatile market irrespective of the Cyclone event, Gabrielle distorted the market because of the amount of forest blown over, expediting the need to get that wood to market. “The flood of wood that came into the market, which would not normally have been there, resulted in a negative impact on export pricing. It was almost a case of ignoring the pricing and moving the wood before it rotted. “Our Rototuna forest had over one hundred hectares of mature plantation blown over that went into both the domestic and export markets, and that has been replicated all over the North Island at various levels.” Since entering the New Zealand market in 2013 with the acquisition of 13,600 hectares of forest from the New Zealand Super Fund, CFGNZ estate has expanded to 35,000 hectares from Wellington to Waitangi, with a mix of freehold ownership, lease or cutting rights. Regional offices in Tauranga (Also the operations hub), Whangarei and Wanganui provide the strategic oversight of forestry operations, with all forest management operations coordinated by professional and independent forest management companies selected for their expert knowledge of the region. “In Northland we use Northland Forest Managers and NZ Forestry, as our two forest management companies. I oversee everything that happens in Northland at a strategic level, determining annual wood flows, sign off on budgets, and develop strategic plans including long term estate models. We do annual wood flow remodeling of our estate, which we extend out to sixty years in advance, so that we know where the logs are coming from in sixty years’ time. We work that back to a five-year plan that is provided to the forest management companies, so they know what is coming ahead in that time frame and implement those plans at an operational level.” CFGNZ’s Northland region encompasses around 9500 hectares of forest estates, with the most southern estates south of Dargaville in Rototuna on the Pouto Peninsula. There is a group of forests just west of Whangarei in and around the Mangakahia Valley, and the most northern estates are in Waitangi. “Out of Northland’s 9500 hectares we have a targeted harvest of between 220,000 and 240,000 tonnes per year, cutting what we grow so that the harvest level can be sustained in perpetuity. “By the time we have harvested the oldest tree, there will always be a crop behind it ready for harvesting. Sometimes there will be operational constraints that mean the volume will be higher or lower in any given year, but on balance it works out at around that range.” “I always tell the mills, if you need the wood, let me know and I will ensure you get it. As much as we can, I would never let a domestic mill run out of wood.”
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