Chair and Chief Executive Overview
Powering our country through trees
This time last year we determined that forestry’s time had come, and aptly named our annual report “Unleashing the power of forestry”. One year on, we have taken the title “Forestry unleashed” to reflect changes across the board from global to local. Much has happened this year to set Scion, and the forest industry, on the road to more surely drive our mission: “Enhancing New Zealand’s prosperity, well-being and environment through trees - Kia piki te ora, te taiao me te whai rawa o Aotearoa mā te ngāherehere”.
We strongly believe that forestry, and all that we can make from trees, has great potential to achieve our mission in very significant ways. We know that our purpose is highly aligned with many government objectives, such as increasing afforestation to one billion trees in a decade and a zero carbon emissions economy by 2050. Scion, too, is well aligned to supporting Māori achieve their long-term aspirations for their land and their people.
Through planting the right trees in the right places for the right purposes, long-term good for New Zealand economically, environmentally and socially will be attained.
Many Māori entities are directly or indirectly linked to forestry or can utilise forest products, like using packaging as part of commercial enterprises. This year, three partnerships involving Scion were supported by the new Provincial Growth Fund: Ngāti Whare, who received Crown backing of $5.8 million to underpin the development of their state-of-the-art nursery at Minginui; the Northland Tōtara Industry Pilot programme to test the proposition of building a full sustainable value chain industry in Northland based on farm-grown tōtara; and the recent announcement to explore establishment of a kauri sanctuary at Takou Bay led by Ngāti Rēhia. Seeing Māori/Scion partnerships grow and deepen is encouraging. Together we are identifying new opportunities and pathways forward, and enjoying rewards that will evolve into sustainable benefits for our country Aotearoa.
During the year we embarked on a strategy refresh, designed to lift our thinking above our current framework so we could indeed see “the wood for the trees”. The process was important for us to really understand what Scion is about and what opportunities are ahead for New Zealand. In the process, we set out our aspirations for our country in 2050. To help us get there, we concentrated on more immediate goals, which we were delighted to present in our new strategy “Right tree, right place, right purpose: Scion strategy to 2030” published in June and available online. Our job now is to formulate the action plan to deliver on this strategy so that through planting the right trees in the right places for the right purposes, long-term good for New Zealand economically, environmentally and socially will be attained.
Last year, we celebrated 70 years of science impact. A year on, we have much to be proud of. Our research highlights presented in this annual report cover just a small portion of the total contribution we, and our iwi and industry partners, have made towards making forests the powerhouses of the future.
A milestone achievement was completion of the world-first draft assembly of the radiata pine genome, announced at the Forest Growers Research Conference last October. This marked the beginning of a new era of precision forestry for this species, which comprises 90 per cent of all New Zealand planted forests.
Scion’s involvement in the myrtle rust incursion response was intense during the year both as leaders of specific projects and as collaborators in multi-disciplinary and multi-organisation programmes. We are leading a new approach to engagement with Māori and interest groups to create a baseline for long-term monitoring and surveillance of myrtle rust, and we lead a social science theme to the myrtle rust response. Also, development of a smartphone app – the Myrtle Rust Reporter – was led by Scion. Launched in November, the bilingual app enables citizen scientists to log and monitor Myrtaceae plants.
Scion is a key player in the kauri dieback response via a highly collaborative research programme. In the last six months, technologies have emerged from the consolidation of research conducted since 2013 covering breeding, management and research approaches. This work will be showcased at the upcoming Healthy Trees, Healthy Future conference in August.
Optimising radiata pine stand density could increase the net value of the plantation estate by $1.7 billion. Using productivity indices our scientists developed a model that predicts the optimum final crop stand density to produce structural grade timber. Using this model they were able to develop productivity maps covering the whole country. The model will be released later in 2018 for use by forest owners and managers to plan targeted operations optimising stand density and maximising the value of their crop.
How forests can power our country was well illustrated in the launch of the New Zealand Biofuels Roadmap in February by the Minister of Energy and Resources. The roadmap, which includes forestry as a feedstock, is stimulating discussion on domestic large-scale production and use of liquid biofuels as a key first step to make industry and policy makers aware of the options, and their advantages and disadvantages.
Financially 2017-18 has been a strong year. Revenue growth of 9.3 per cent to $56.7 million (budget $54.6 million) provided a net profit after tax of $2.3 million (budget $1.7 million).
During the year we sparked the interest of the public in the potential of forestry to shape a sustainable future through three interactive exhibitions: ‘Science in the City’, in the Rotorua CBD; at Science New Zealand’s event at Te Papa, Wellington, celebrating 25 years of Crown research science; and a three-month ‘Science in the Forest’ encounter at Rainbow Springs Nature Park in Rotorua open to all the park’s international and domestic visitors. All exhibitions included talks by scientists on a broad variety of topics.
Our plans to create a permanent showcase for the public at our Rotorua campus are taking shape. Detailed design of an innovation hub was largely completed during the year, and construction will commence by the end of this calendar year. The innovation hub will be the new entry point to Scion and will include a public café and exhibition area, while also housing Scion staff and tenants. The hub is one part of our extensive campus redevelopment to upgrade our aged buildings and provide modern, flexible facilities to reflect our world-class work. During the year we refurbished an entire office floor, now occupied by several teams, and started work on another floor.
Financially 2017-18 has been a strong year. Revenue growth of 9.3 per cent to $56.7 million (budget $54.6 million) provided a net profit after tax of $2.3 million (budget $1.7 million). On the back of investment into property, plant and equipment totalling $8.6 million, Scion’s cash balance reduced from $15.5 million to $13.9 million (budget $7.3 million). This positions Scion well for reinvesting back into the organisation, such as through the construction of the innovation hub and other significant science and building infrastructure planned over the coming five years.
We sincerely thank all our staff for their hard work and commitment to Scion in a year where we faced new challenges and prepared for exciting opportunities. Our customers and partners also receive our thanks for contributing to our successful year.
Special acknowledgements go to former general managers Keri-Anne Tane and Emeritus Professor Alison Stewart for their contributions to Scion and the executive team. We congratulate both on their new leadership roles.
During the year, we welcomed two new Directors, Stana Pezic and Greg Mann, to the Board. We were also delighted to welcome Adriana Botha as General Manager People, Culture and Safety, Arron Judson as General Manager Marketing and Partnerships and Dr Bart Challis as Chief Operating Officer (from 30 July 2018).
Dr Helen Anderson
Dr Julian Elder