Ormond & Te Karaka Forests Combined Meeting, 2 December 2017 Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 1 Version 2
Good Morning and Introductions Forest Enterprises Team Mark Blackburn (formerly Iles and Campbell, Taupo) Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 2
Housekeeping • General Housekeeping • All mobile phones to silent please • Note the location of exits and toilets • In case of emergency, follow our staff in hi vis • Presentation is being recorded • Questions • Questions are welcomed and time slot included at end of each topic Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 3
Today’s Meeting Program • Session 1 • Matters Impacting on the Harvest (Forest Specific and Gisborne Operating Environment) • Recommended Solution to Maximise your Harvest Return (collaborative harvest) Morning Tea (around 10.30am) • Session 2 • Combined Harvest Details • Second Rotation and Exit Options • Process from Here • Harvest Reporting and Distributions • Financial Status of the Investment • Any Other Matters Light Lunch (around noon) Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 4
Matters Impacting on the Harvest • Forest Specific Matters • Gisborne Operating Environment Matters Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 5
Matters Impacting on the Harvest Forest Specific Matters • Forest specific matters start with a Harvest Plan • The plan is the infrastructure (roads and landings) currently identified as necessary to most cost-effectively harvest the three forests • The plan ignores forest boundaries • The plan ignores age classes Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 6
Matters Impacting on the Harvest Forest Specific Matters • The plan confirms that we should be able to cost-effectively harvest all of each forest • The plan is dynamic and will change in response to conditions on the ground and issues arising during harvest Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 7
Matters Impacting on the Harvest Forest Specific Matters • The plan involves building a significant amount of infrastructure Forests Te Karaka Measure Ormond Te Karaka North Total Harvest Road Distance (km) 15 15 16 46 Metal (m3) 23,241 24,726 25,999 73,966 1,937 2,060 2,167 6,164 Metal (loads) 3,874 4,121 4,333 12,328 Metal Truck Movements # Total Planned Landings 46 45 53 144 • The plan is to build the infrastructure within the forest (invest in own forest not neighbours) Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 8
Matters Impacting on the Harvest Forest Specific Matters • The Harvest Plan identifies options and challenges • Options are good! • Challenges have to be addressed • Some of the challenges and options identified are numbered Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 9
Matters Impacting on the Harvest Forest Specific Matters • The greatest forest-specific challenge for the three forests is the quality (poor) of their public road access • HOWEVER, the fact that the three forests connect, plus their compatibility from an age class perspective, is a major opportunity Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 10
Matters Impacting on the Harvest Gisborne Operating Environment Matters • Having reflected on the Forest Specific Matters impacting on harvest we must then consider the constraints posed by the Gisborne Operating Environment – 1. Regional issues impacting on harvesting 2. Forest Enterprises’ responsibility to all the Gisborne forests we manage Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 11
Matters Impacting on the Harvest Gisborne Operating Environment Matters • Forests were part of the 1990s planting boom • Key advantage for Ormond and the Te Karaka Forests is that these forests are three of our older forests in the Gisborne area (so opportunity to get ahead) Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 12
Matters Impacting on the Harvest Gisborne Operating Environment Matters • 1990s boom plantings have to be harvested and sold – and not just Forest Enterprises Investors’ trees! • Where is the increased volume to go? 1. Local Mills – very little opportunity • Wairoa – small quantities • Juken New Zealand seldom buy wood in 2. The extra volume will therefore be exported Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 13
Matters Impacting on the Harvest Gisborne Operating Environment Matters • Forest Enterprises is becoming a major customer of our Gisborne export partner PFP Ltd - • PFP is one of the two largest log export companies in New Zealand • Partnership arrangement with the other major log export company (TPT Forests Ltd) for Wellington export • Open book agency at fixed fee Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 14
Matters Impacting on the Harvest Gisborne Operating Environment Matters • Where are the potential bottlenecks in the logistics chain if all this wood is to be harvested and sold? • Logging contractors • Log Truck contractors • Roading contractors Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 15
Matters Impacting on the Harvest Gisborne Operating Environment Matters • Where are the potential bottlenecks in the logistics chain if all this wood is to be harvested and sold (continued) ? • River Catchment Areas – each colour represents a different river catchment area for planning purposes • Quotas are being introduced for harvesting in many Gisborne river catchments Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 16
Matters Impacting on the Harvest Gisborne Operating Environment Matters • BUT, the greatest bottleneck is the Eastland Port • Currently, Eastland Port (Gisborne Port) is handling approximately 2.5 million tonnes of logs annually • Eastland Port may soon be the second largest log export port in New Zealand • Forest Enterprises is currently exporting from Eastland Port at an annual rate of 180,000 tonnes Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 17
Matters Impacting on the Harvest Gisborne Operating Environment Matters • Capacity of Eastland Port is constrained - • Currently limited to loading one log ship at a time • Limited on site storage - offsite storage is already having to be used (Dunstan Road) • Port’s objective is to be able to load two ships concurrently, and supply the wood from both on-site and off-site storage • The resource consent application has been lodged • Forest Enterprises is working closely with Eastland Port • Providing projected annual woodflows for the next 12 years Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 18
Matters Impacting on the Harvest Gisborne Operating Environment Matters • Forest Enterprises Projected Port Volume assuming expansion - • Current projection is that Forest Enterprises will be able to secure up to 700,000 tonnes per annum of the increased port capacity • 700,000 tonnes per annum is similar to the present capacity of the largest users of the port • Forest Enterprises will be a major customer of Eastland Port Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 19
Matters Impacting on the Harvest Gisborne Operating Environment Matters • Impact of Port Capacity on Forest Enterprises total harvest 700,000 tonnes Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 20
Matters Impacting on the Harvest Gisborne Operating Environment Matters • PLUS, Forest Enterprises cannot plan for the harvest of individual forests without consideration of all the forests we manage in the Gisborne Region • A solution for the Ormond, Te Karaka and Te Karaka North Forests cannot unreasonably comprise the solution for the other forests we manage Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 21
Forest Enterprises Gisborne Forests Solution • The solution we come up with must - • Maximise the investment return for each forest • Minimise the risks for each forest • Provide options to address the forest specific matters in each forest (addressed earlier) AND • Is also logical for the second rotation • There will be a second rotation with or without some or all of the existing Investors (to be discussed later) Ormond and Te Karaka Forests Combined Meeting 2 December 2017 Slide 22
Recommend
More recommend
