2018 International Forest Industries IFI Feb March 2018 Digital

LOGGING & BIOMASS NEWS 13,000th Ponsse machine celebrates extension of production facility Ponsse recently celebrated two important milestones. The biggest extension project in the company’s history has reached the topping- out phase, and the factory has produced the 13,000th forest machine made in the Vieremä facility in Finland. Ponsse machine number 13,000, an Ergo 8w, was delivered to the company’s German customer FoWi GmbH & Co. This also marks the beginning of Ponsse’s and German distributor Wahlers Forsttechnik GmbH’s jubilee year: 25 years have passed since Ponsse and Wahlers signed their contract on distribution and service collaboration in the German- speaking regions of Europe. The seeds of this collaboration were sown already in the early 1970s when Einari Vidgrén, Ponsse’s founder, was logging on a storm devastation sites in Germany. Quality and flexibility through investments The current production facility investment is the biggest in Ponsse’s history: the factory will expand from the current 2.7 hectares to 4 hectares. Most importantly, the investment contributes to ongoing improvement and development of quality, flexibility, safety and productivity of Ponsse’s operations. The extension of production facilities enables the company to respond to changing market situations with more flexibility, and to tailor machines to customer requirements more efficiently in a serial-production environment. The new facilities in Vieremä will be completed by the end of the year, and will be the most advanced forest machine production facility in the world. - O ur strong focus on the development of cut-to-length forest machines requires constant development of our production operations. That is the only way we can fulfil the needs of our customers and stay at the forefront of technology in the demanding forest machine market. A safe, modern factory is also an important investment in our employees’, says Ponsse’s President and CEO Juho Nummela. The Ponsse factory in Vieremä currently employs 570 employees, 390 of whom work in production tasks. It’s forest machines are made in Vieremä, Finland. New factory in operation by end of year New assembly lines and storage facilities housed in the new extension will be phased in gradually during 2018. Relocation to new facilities starts in March with warehouse operations. New smart warehouse technologies make production warehouse logistics more efficient and increase the degree of automation considerably. Warehouse automation covers 15,500 storage slots for small items and components and 3,900 pallet positions. After the warehouse relocation, a new harvester head assembly line will move to the new facilities. A new assembly line for base machines will be in operation by the end of the summer, and by end of 2018 cabin and crane assembly lines will also be renewed. The amount of production-time testing used to support quality control will increase in all production lines. Southern NZ forestry companies optimistic Log export prices are having a 25- year high, with southern industry insiders optimistic longer-term gains are likely to be sustained. As of December 17, key indicator the At Wharf Gate price for A-grade logs 30cm or more at the small end, stood at $148 per export cubic metre, according to the latest available data from PF Olsen Ltd. Invercargill-based Log Marketing NZ Ltd general manager Greg Lindsay said that put average prices at their highest since August 1993. The peak had been driven by strong demand from Chinese and Indian markets. “China has had environmental constraints applied reducing domestic log production, which has contributed to increased export demand. Shipping rates are also relatively competitive currently. Allied with strong domestic and Australian demand during recent years, typical seasonal price peaks and troughs were also diminishing”, Lindsay said. Southern Wood Council chairman Grant Dodson said market indicators suggested current good prices would be sustained. “We expect some volatility with price up and downs across the year. This is business as usual for forestry but fundamental demand and market conditions remain strong.” Although council members across the region were “very positive” about industry prospects, Dodson highlighted possible concerns on the horizon. “The impact of the recent share market 10 International Forest Industries | FEBRUARY / MARCH 2018 correction is yet to play out. There may be some impact depending on how significant the correction ends up,” he said. “Additionally, although local log demand is strong, local mills are having to compete with export log prices, which is causing some discomfort while markets adjust. But forest owners and mills are simply working through this as they have many times in the past. It’s great to see strong returns from forestry and lots of busy domestic mills.” Rayonier Matariki Forests managing director Paul Nicholls was also positive, while urging perspective over current prices. “Log prices peaked in 1993 but, when adjusted for inflation, there have been several other price Greg Lindsay, General Manager, Log Marketing NZ Ltd peaks higher than today,” he said. Rayonier had operated in the south since 1992, with current market conditions allowing for greater business flexibility, he said. “We’re in a good position to export the logs that don’t meet domestic processors’ specifications. We’re also able to harvest and export minor species established by the Forest Service that have been uneconomic until now. This allows us to establish more commercially- focused plantations.”

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