64 | Social licence key to successful operation Richard Loader On average 20% of CFGNZ’s volume is sold into the domestic market, with the balance exported, mainly to China. FORESTRY China Forestry Group New Zealand Mike McCarthy Mob: 027 750 9425 Mike@mccarthytransport.co.nz www.mccarthytransport.co.nz MCCARTHY TRANSPORT IS PROUD TO SUPPLY LOGISTICAL SERVICES FOR THE CHINA FOREST GROUP FOR OVER 5 YEARS. PROUDLY TRANSPORTING LOGS FOR CHINA FORESTRY GROUP NZ Proudly supporting China Forestry Group NZ For China Forestry Group New Zealand (CFGNZ) maintaining sustainable forestry operations and an enduring social licence are key to its successful operations and the support of the communities in which it operates. Since entering the New Zealand market in 2013 with the acquisition of 13,600 hectares of forest from the New Zealand Super Fund, the company’s estate has expanded to 35,000 hectares from Wellington to Waitangi, with a mix of freehold ownership, lease or cutting rights. CFGNZ provides the strategic oversight of forestry operations, with all forest management operations coordinated by professional forest management companies selected for their expert knowledge of the region. While the forest managers engage the contractor work crews to carry out day-to-day operations, CGFNZ has sometimes attracted professional contractors into regions light on a contracting workforce by offering a Heads of Agreement contract to specific contractors. “Northland is particularly strong with contractors because of its long forestry history,” says Regional Manager Matt Pedersen. “On occasion we’ve offered work in another part of the country with a three – five-year contract and a set volume per annum. A number have taken up that offer and work directly for the forest management companies, under their rules, policies and procedures.” Depending on the forest’s location, on average 20% of CFGNZ’s volume is sold into the domestic market, with the balance exported, mainly to China. “In some regions up to 25% could be sold into the domestic sawmills,” says Matt. “We engage very strongly with the domestic market, selling as much as possible to the local mills and ensuring they have enough supply to keep them operating sustainably, topping up when necessary.” Currently operating from every New Zealand port except Gisborne and Nelson, CFGNZ exports about four million tonnes of logs each year, of which 20% comes from its own forests. “Buying logs ‘at wharf gate’ is a significant string to our bow in respect to how we manage our export and port operations. We issue prices at each port and market forces dictate the success or otherwise. “The owner, contractor, or forest manager looking after the logs decide whose name will go on the docket. If they want it to be a CFG supply that’s put on the docket, it turns up at port, it’s processed and at that point we own it.” Five years ago CFGNZ capped harvest volumes, particularly in the Northland region, transitioning to a sustainable cut for the benefit of the contractor workforce. “In Northland we cut what we grow. On an annualised basis we know our forests grow a certain amount and that’s the amount we cut, ensuring we have a perpetual harvest. “That has filtered down to a lot of other sustainability goals including economics and operations. We set baseline volumes for the supply chain that are adhered to regardless of market forces. Even if the market crashes, we still cut a baseline volume so that it means everyone is still working. “Because we harvest year-round, we’re constantly exposed to the ups and downs throughout the year, but on average we come out even. That came to a head last October/ November when prices came off record highs in the middle of the year, reaching lows that we hadn’t seen for ten years. We just kept going. We knew we had been through an up, we were going through a down, we would go through an up again.” Matt says social licence is something he never ever takes for granted. Very much about public opinion, it can change on a whim rapidly. “I like to think that our levels of engagement and social licence have improved in the last five years. People understand how we work and that gets out to the wider community. “We’re particularly strong in the environment and health and safety within our contractor base. I’m incredibly proud of the way our Northland forests are operated, run and managed at a high environmental and cultural level, and often offer them up as showcase forests for industry and non-industry working groups.” Forest Stewardship Council (FSC) accredited, CFGNZ is independently audited on an annual basis to ensure it complies with a wider range of criteria including economic, environmental, social and cultural standards. Community engagement is another way CFGNZ maintains its social licence, working directly with hapu and iwi groups around wider geographical issue around our forests. “Through our forest managers we engage with people about access to the forests for mountain biking, walking, horse trekking. If someone is looking at doing something that has a low fire risk, that’s an easy yes. “We’re always mindful of the risk to kiwis in our forests and we take the protection of kiwis in our forests very seriously. We treat that as one of the most critical things we do in any off our forests in New Zealand.”
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