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IKEA and Apple are buying up Forests

Future looks bright for those with foresight as IKEA and Apple are buying up whole forests. 
IKEA bought 83,000 acres of forest last month. In April, Apple bought 36,000 acres. What’s the
reasoning behind these retail giants buying their own forests? To manage them. 

Last year, we saw major technology and retail companies buying up wind and solar farms. Walmart,
Facebook, Apple, IKEA, Google — all decided to either build or buy renewable energy farms. Nearly
as many made pledges to start using fully renewable energy sources: IKEA said it would become
“energy independent”. Facebook is already using all-renewables-powered data centres to manage all
your likes. Now, some of them are going further down the supply chain to manage the provenance
of their materials — by buying up the forests that source their paper and wood. 

Last week, The Wall Street Journal reported that IKEA had bought up almost one hundred thousand
acres of forest in Romania and the Baltic — this, after the company had been accused of “brutal”
logging practices in Russia and cutting “old forests that have high conservation value,” according to
the WSJ. The company doesn’t log in Russia anymore, and instead will focus on farming its Romanian
forests, managing its purchase to create a renewable source for its operations. After all, IKEA uses
one per cent of the world’s wood supply, a number it’s trying to scale back by half. It’s all part of the
company’s plan to become “forest positive” in the next five years, growing more wood than it uses. 

Similarly, Apple recently bought up a 36,000 acres of forest in Maine and North Carolina. These
areas are “working forests,” or regions that act as renewable sources of wood and paper pulp for
industry. Apple and the Conservation Fund, which is collaborating on the project, says that these
“working forests” are increasingly being developed. That’s not only bad news for them commercially,
but bad news for forests that were once outside the scope of industry — as Apple’s Lisa Jackson
explained in a post about the purchase: 

We are in the midst of one of the greatest land transfers in history. In the last 15 years, we’ve
already lost 23 million acres of forestland that provided the pulp, paper, and solid wood material for
products we all use. That’s roughly an area the size of Maine. As land continues to be sold and
change hands at an alarming rate, an estimated 45 million more acres are currently in the crosshairs
of development. 

The goal of the Conservation Fund’s work is to create limits on how those working forests can be
used beyond producing paper products. These are designed to “ensure sustainable harvests and
restrict the subdivision or conversion of land to non-forest uses,” the group writes. 

Source:FridayOffcuts and Gizmodo 

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Log prices up after 3 months of falls

The export market for New Zealand forestry products is stabilising.

It has been helped by the weakening kiwi dollar, reduced inventories in China and increased domestic housing demand in the US, say industry analysts.

Meanwhile, domestic demand was strong, fuelled by buoyant housing markets in Auckland, growth in the Tauranga housing market, and the continuing Canterbury rebuild, they said.

Export log prices rose in June after three months of significant falls, said Peter Weblin, Rotorua-based chief marketing manager for forestry management company PF Olsen.

Most at-wharf-gate dollar June pricing appeared to be based on A-grade at about US$100 ($147), up from a low of US$95 in May, he said. Log stocks in China continued to fall steadily through May, reducing by nearly 200,000cu m to an estimated 3.87 million cubic metres. That was down from the peak of 4.27 million cu m at the start of April.

But Mr Weblin said stocks needed to get under 3 million cu m to bring confidence back, while the main driver of log imports – the Chinese construction market – was still slow.

The dollar was definitely helping, especially for processors meeting strong demand for processed clear boards in the US and Europe.

“The depreciating kiwi really helps the finished product guys because it works on a much bigger value.”

Dennis Neilson, director /founder of Rotorua-based forestry consultants DANA, said despite the doom and gloom stories about the Chinese economy beginning to melt down, New Zealand was again the biggest exporter into China, with about 1 million cu m of logs each month. “That is as much as last year,” said Mr Neilson. “And while prices have declined for some grades, they’ve held up for others. Our exchange rate and low shipping costs means the net return to many forest owners – particularly in the Central North Island within reasonable transport distance of Port of Tauranga – remains attractive, so harvesting continues.”

Mr Neilson said there were a number of factors including increased US housing starts, which were slowing US exports to China, and attracting imports from Canada.