70 | Clients benefit from fixed-price contracts Richard Loader FORESTRY IFS Growth: NZIF Forest Management Ltd - Christchurch Economic benefit for farmers from page 68 sales@iplply.nz 0800 650 801 iplply.nz New Zealand manufacturers of quality plywood products Helping grow the country store.pggwrightson.co.nz Phone 03 211 3130 | invercargillstore@pggwrightson.co.nz PGGWrightson Invercargill | 232 Dee Street, Invercargill Proudly supporting local agricultural businesses IFS Growth’s roots go back 22 years when, straight from Lincoln University and in need of work, third generation forester Dan Minehan began pruning trees in Southland with the support of a silviculture crew and whole lot of vision, passion and Kiwi ‘can-do’ courage. Still family owned and operated, IFS Growth has evolved from those early days and now embraces all aspects of forest management including establishment, silviculture, ETS evaluation, reporting and brokerage, harvesting and marketing. With 10,000 hectares under management, mainly in the Otago/Southland regions, IFS Growth’s Head Office is in Invercargill with other offices in Nelson and Tauranga. Forests under management are predominantly owned by local council and Kiwi investors who share the same values as IFS. The company also looks after woodlots, privately owned by farmers and lifestylers, with blocks ranging from 5 hectares up to 2000 hectares. Otago/Southland Regional Manager, Anton Ridley, says the company harvests in the region of 700,000 tonnes of logs a year, of which 60% is exported, with the balance supplying local mills. “In 2014 we saw a need to provide a harvesting service for the smaller woodlots and started our harvesting arm called One Forest. The whole idea was to ensure the woodlot owners got the same opportunities as owners of larger estates, by combining all the logs for sale. Instead of the woodlot owners on-selling logs to a trader at wharf gate, we arranged for our own wharf space in Otago and Southland so that we could go direct to the Chinese log buyers. “Now we deal directly with the Chinese and that has provided us with different options around pricing, and more confidence to our customers. For example, we’ve entered into long term fixed price contracts, locking in prices for our clients. It has also meant that we can keep our harvesting crews working, rather than stop production until the log price becomes favourable.” Anton says that benefit flows through to all of IFS Growth’s clients who get the benefit of the fixed price. The use of a loyal contractor workforce has always been at the heart of IFS Growth’s operations and it is a relationship built on mutual respect and trust. “Our relationship with those contractors is key to our success. Using small family businesses with a bit of skin in the game is the most efficient way of carrying out our operations. “We work with the same contractors, year-in and year-out and have managed to keep them going all the way through. We’re doing a lot of new planting at the moment. Southland/Otago will plant about 4 million trees this year and that’s not going to change anytime soon.” Anton says that all the forests bought and planted on behalf of the owners/investors are established for commercial harvest operations. “We don’t do any permanent lock-up and leave forests. Everyone who works for IFS have grown up in rural areas, and some still farm. When we buy a block, we look to chop off all the productive land and offer that to neighbouring farmers, and we make sure the houses stay occupied. “We don’t want to ruin these communities, so we make sure the population stays more or less the same. We spend quite a bit of time attending farm discussion groups and you hear everyone’s opinions. So, you try to do what is right. “ Being a small family-owned company, we’ve always been quite nimble. We partner with like-minded New Zealand investors who share our values. So, with that, and us being nimble, you can do the slicing and dicing of land purchased, talk to the neighbours and come up with different solutions.” Working with various recreational groups is another way that IFS engages with the community, and in the past has helped the Council build and maintain hiking, mountain biking and horse trekking tracks in some of the local council owned forests under management. “That has been driven by having to work from home during COVID, but also embracing technology and the need for accurate and timely data,” says Glenn. “For GIS spatial work we used to wait for a plane to fly over and take a photograph of the forest every couple of years, and use that for our planning. Now we have bright young people in this office who disappear in the morning with their drones and bring the imagery back in the afternoon. It’s all just completely different to where it was.” FML manages 30,000 hectares of forestry estates in Canterbury, Otago, Southland and the West Coast, delivering an array of specialist forestry services from establishment, silviculture and harvesting through to marketing, forest valuation and carbon forestry. The forest estates range from small 2-hectare blocks up to 1200 hectares in size, though one of its clients has 3000 hectares in individual 200 – 500 hectare blocks. Forest owners range from farmers, private investors, to small forest owners. FML was also the foundation partner in the establishment of Tasman Forest Management in Nelson and Marlborough, and Forest Management North Island, operating out of Masterton and Napier, and continues to be a major shareholder in both of those businesses. Each year FML oversees the harvest of 700,000 – 800,000 tonnes of logs, which are either exported or wherever possible fed into the local saw mills. Last year FML planted 3100 hectares of forest and the 2022 programme is in excess of 3500ha, a combination of new planting and replacement planting following harvest. “We’re heavily involved in ETS and have been for at least twelve years. We don’t look at planting forests in unsuitable areas just for carbon. We look at planting for the long term with the expectation the forests will be used for timber, just as much as carbon. One of the best clients we have is us. We have established our own forests since 2010, and now have an estate of 4500 hectares. That’s using ETS to develop a timber asset.” The environment and sustainability have become increasing key measures of success for almost all Kiwi industries, not the least of which is forestry. Glenn reflects that sustainability is an interesting word, and defines it in different ways, one of which is about business sustainability. “That’s about how we’re going to operate into the future. Over the last five years we have developed a succession model and brought some of our younger star performers into the management of the company, and it’s refreshing the leadership as well. Another is the self-determination strategy by developing our own estates, so that we’re not so reliant on buying that next woodlot. And for too long, as an industry we’ve tried to stay in the shadows, thinking that the less we’re in the public eye the better.” With the conversion of farms over the last few years, FML and other forestry companies have become a lot more visible, with the Ag sector voicing its concerns about the loss of productive land in some of the regions. “In Canterbury, this has not been our experience and in fact almost all of our establishment has been for local farmers who have been planting large chunks of their own land, and embracing ETS and realising they own the golden goose — the land! Forestry is just another land use and we’ve been planting up to 400 – 500 hectares per farm. Farmers have recognised there’s an economic benefit in forestry, particularly in North Canterbury. A lot of the farmers here who have planted trees for generations have always known that the returns from timber alone have outstripped their drystock return on certain land types. Now you put the ETS on top of that and a burgeoning bio-fuel sector and it’s looking pretty good.” “In 2014 we saw a need to provide a harvesting service for the smaller woodlots and started our harvesting arm called One Forest.”
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