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Annual Report Highlights G. Annual Report Highlights Industry focus Added value Regional development Annual Report Highlights Presented to the House of Representatives pursuant to section 44 of the Public Finance Act 1989. Our Annual Report is presented in two parts – Highlights (Part A) and Reports and Financial Statements (Part B). Together both documents fulfil our annual reporting responsibilities under the Crown Research Institutes Act 1992. The Reports and Financial Statements (Part B) includes the employment and environmental reports, core funding investment, directors’ report, performance targets and financial statements. Our Annual Report is also available in digital format at www.scionresearch.com/annualreports Published by: Scion, 49 Sala Street, Private Bag 3020, Rotorua 3046, New Zealand. www.scionresearch.com September 2015 © 2015 New Zealand Forest Research Institute Limited trading as Scion. ISSN 1177-1763 (print version) ISSN 1178-5276 (online version) G. Contents Scion at a glance Chair and Chief Executive review: Strong confidence in forestry’s future Our science plan Research performance Working with Māori Reaching out Research collaborations Financial results summary Glossary OurProsperity from trees vision Mai i te ngahere oranga Scion’s purpose is to drive innovation and growth from New Zealand’s forestry, wood product and wood-derived materials and other biomaterial sectors to create economic value and contribute to beneficial environmental and social outcomes for New Zealand. Scion at a glance $ $ m .m . Total comprehensive Operating revenue Last year: $.m income Last year: $.m % . full-time equivalent staff Return on equity Last year: .% Rotorua Wellington Christchurch Dunedin published papers annual weighted average . commissioned reports H-index accepted by users citations per paper (rolling . 10-year average) Strong confidence in forestry’s future Tony Nowell CNZM, Chair Dr Warren Parker, Chief Executive Chair and Scion has completed another busy, streams and how our investment in stimulating and challenging year publically funded science is made. This Chief Executive pursuing its core purpose to provide the has involved significant work engaging review science that helps drive innovation and with five National Science Challenges growth from New Zealand’s forestry, relevant to Scion’s future, and towards wood product and wood-derived year end, an extensive Four Year Rolling materials sectors. Our focus has been Review of Scion. Our resources were on increasing the contribution of challenged, and we have been required plantation forests to national and to adapt, to change and to upskill regional economic development, driven accordingly, while also seeking to grow by our vision of creating “Prosperity income from the private sector. from trees” for New Zealand and To address these changing dynamics New Zealanders. and the opportunities they present, we Our work has had an increased added exciting new talents during the emphasis on harnessing sector year to enhance our capabilities in value complementarity. Specific initiatives chain optimisation, market analysis, will assist the integration of forests with informatics and ‘big data’, human other land uses in order that more factors research (for improved health stringent environmental requirements and safety in the forest industry), are met, and more products are used biopolymers, biotechnologies, biofibres in supply chains. This will benefit and green (or ‘clean’) technologies. environmental and social outcomes, At Scion, we have a strong confidence support regional job creation and help in forestry’s future, supported by the Māori achieve their aspirations. re-elected government’s ongoing We have carried out this work within commitment to achieving business dynamic industry, business, science growth agenda targets, with specific and political environments, with aims to lift GDP growth in intense review of our future funding under-performing regions that all have large forestry sectors. Also, global or biofuels. Notably, our Woodforce for small forest owners. Also, our work trends are driving resource-efficient technology for thermo-plastic wood with Solid Wood Innovation on log and renewable economic growth; and composites is now undergoing segregation technologies continues. domestic imperatives are in force to industrial-scale commercial testing During the year we refined and reviewed improve freshwater quality, address within the automotive and other Scion’s values, consistent with our climate change and enhance the built sectors. changed work environment, and our environment. These are opportunities Weather events and heightened changing customer and stakeholder for Scion to contribute to, and have concerns about biosecurity risks over needs. Ingenuity, Collaboration, further sharpened the focus of our the past year have reinforced the Excellence, and Manaakitanga express research. forest owners’ need to adapt their tree the refreshed approach of Scion to A record harvest of 30 million tonnes genetics, forest management and its work and purpose. We retained of logs in the past year, expected to forest protection for more extreme Scion’s ACC tertiary Workplace Safety reach 32-36 million tonnes per annum weather and biosecurity incursions. Our Management Practices accreditation. over the next decade, augurs well for science programmes strive to double Revenue of $47.34 million was below the forestry sector and the positive forest productivity, reduce forest budget of $49.12 million, reflecting both economic impact it can make to New biosecurity, wind and fire risk, and delayed and reduced public sector Zealand. However, with deforestation secure licence to operate in areas funding. However, EBIT of $3.27 million of some 100,000 hectares in recent such as new genetic technologies, and NPAT of $2.43 million were above years, the wood processing sector alternatives to methyl bromide for log budget of $2.50 million and $1.77 million faces major concerns over the security fumigation and steep land harvesting. respectively, mainly reflecting timing of log supply from the late s if Demand for up to 30,000 new houses related savings in personnel costs as planting levels of both harvested and per year in New Zealand over the next staff capability was built in the new new forests are not substantially decade, and an imperative to improve fields identified above. Return on equity increased. housing affordability through was 7.3 per cent above budget of 5.6 Iwi aspirations to plant up to 1 million mechanisms like pre-fabrication, better per cent. Capital expenditure of hectares of forests on under-utilised standards and gains in supply chain $4.44 million, including $1.73 million land, including indigenous and efficiency, has increased our focus on carried forward from the prior year non-radiata pine exotic species, is an the development of better building approvals, maintained our momentum important opportunity for both solutions and establishing closer in modernising and improving the reforestation and regional development links with BRANZ and the construction safety of our facilities, plant and that is being supported by our science. sector. We continue to develop our equipment, and in strengthening With impending global shortages of understanding of how the both campus and cyber security. The the long fibre softwood used as an characteristics and structure of our 10-year plan for the Rotorua campus essential ingredient for packaging and timber can best contribute to stronger, was updated in preparation for a major lightweight material substitutes for more innovative and more cost- refurbishment and consolidation of fossil oil products, and with the new effective engineered wood products our wood engineering laboratories global impetus for addressing climate for structural solutions and modified and pilot plant facilities over the next change by the setting of meaningful wood products to replace tropical two years. 2030 individual country commitments, hardwoods. We thank Scion staff for their hard work we see New Zealand’s radiata pine Scion’s technology focus is enabling and ingenuity; and our industry, iwi plantation forests facing a very positive productivity gains and essential and policy stakeholders for their advice future by providing excellent mitigation improvements to worker health and and support. Brian Rhoades completed and value creation opportunities. safety across the forestry value chains. his final year as a Scion Director - we Our science continues to make We are supporting the rapid uptake of thank him for his wisdom and ground in international and domestic ‘smart connected products’ for wide-ranging input over the past six ‘bio-economy’ research and precision forestry, including the use of years. The remaining Directors will development opportunities, whether unmanned aerial vehicles with LiDAR continue into the new financial year they be for packaging and coatings, capability, mobile tree scanners, providing continuity through a period of lightweight wood-plastic composite robotics for mechanised pruning and substantial change in the New Zealand components, industrial heating options harvesting and decision support tools science sector. Tony Nowell CNZM Dr Warren Parker Chair Chief Executive Our science plan Increase the Protect and Enhance Increase renewable value and productivity enhance market access New Zealand’s opportunity energy production and of the New Zealand and improve risk to benefit from energy security by growing forestry, wood products management
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