From Slash to Cash... Wood to Wealth.

Here's how to turn the forestry problem into a solution, with bigger returns, in one page.

I don’t need to go into the detail that we have a problem with our forestry industry. (see other blogs) We can do so much better. The economic value and potential of NZ-Aotearoa forestry are not being fully realised on all fronts - fiscally, socio-economically, and environmentally.

I only have to look overseas in Scandinavia, where SCA, which owns Europe’s largest private forest with 2.7 million hectares, has built a well-invested value chain that maximises the value of each individual tree and all of the forestry’s resources. What is the result? (Click this link to see SCA's Annual Report.) A self-sufficient, sustainable growth model which yields an EBITDA margin of nearly 50% and a gross profit of 30%.

Aotearoa-NZ forestry can achieve this and more. How? By total utilisation and serving higher value markets in pharmaceutical, nutraceutical, textile, chemistry, bio-adhesives, bio-energy, and bio-materials.

Anyway, I was recently asked to put on one page of our NZ Bio Forestry proposal. Here it is…. my simple elevator pitch….

Our Solution:

NZ Bio Forestry proposes to develop a sustainable renewable forestry model that increases the economic value of the NZ- Aotearoa forestry sector, simply by integrating bio-technologies augmenting the forestry, wood manufacturing, and petrochemistry industries into one model.

Specifically, our strategy is to utilise the whole tree and convert the tree’s sugars into bioenergy, biomaterials, and biochemicals. This means using slash, off cuts, pruning, and wood waste to produce biofuel via bio pellets and biochemicals. It means optimising logs through the whole process….logging, manufacturing freighting, and refining process to serve the many Asia-Pacific markets with high-value products….not just exporting raw logs to one or two large dominant markets!

Our vision:

Make Aotearoa NZ, Asia Pacific the Kainga - an innovation home for green technology solutions. And by doing that, grow NZ Forestry value from current levels of around $6.7 billion per annum to plus $30 billion per annum.

How?

NZ Bio Forestry already has in place strategic partnerships across the Asia Pacific, that have proven IP, technology, and production processes. NZ Bio Forestry will initially have three income generation stages in developing the fully integrated model;

1. Produce Wood Fuel/Energy - Bio-pellet stage. Create plants and processes that use slash and wood waste. Timeline: Within 24 months

2. Produce Decorative Ply/Veneer - Materials. Selective logging and developing specifically engineered logs for ply/veneer production. Timeline: Within 36 months.

3. Develop Refining facilities to produce Bio-chemicals. Utilise the residual from ply waste and refine it into bio-chemicals. Timeline Plus 48 months.

The fully integrated operational model once up and running within 4 to 5 years, will see NZ Bio Forestry buying 80% low-grade logs (circa 580,000m3) and 20% pruned, (circa 50,000m3) plus collecting pruning and thinning waste, as well as slash. It will produce bio-pellets for energy; decorative ply/veneer for local and export; biochemicals to replace fossil dependence.

Outcomes:

Potentially there could be 12 facilities across NZ-Aotearoa within two decades using slash, wood waste, and around 7 million to 7.5 million metric tonnes utilised in NZ and refined into bio-chemicals, bio-fuel, and processed wood - far more than simply shipping logs offshore.

Each integrated NZ Bio Forestry facility can generate revenue circa NZ $400m-$600m, which amounts to revenue per FTE of around $1.3m to $1.8m. Jobs and careers, yes, some 200 jobs plus per site.

In summary, it will …

- enable better log, slash, forestry, and wood waste utilisation

- make for more efficient utilisation of freight, and logistics

- provide alternative energy sources, and reduce the need for fossil fuels

- fulfill Government policy to see more logs processed in NZ, where communities get better jobs...and no more slash

- create R&D investment in NZ, developing a hub for the Asia Pacific region

- attract investment in local processing plants, creating skilled employment opportunities.

- make NZ a world leader, with NZ Bio Forestry IP being exported to other parts of the world

Well, not quite one page… but heck ….bloody close, eh?!

Ngā mihi

Wayne Mulligan

CEO- NZ Bio Forestry