6 years ago

Mpumalanga Business 2017 edition

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Mpumalanga Business 2017 is the seventh edition of this highly successful publication that has since its launch in 2008 established itself as the premier business and investment guide to Mpumalanga Province. Supported and utilised by the Mpumalanga Economic Growth Agency (MEGA), Mpumalanga Business is unique as a business journal that focuses exclusively on Mpumalanga.

OVERVIEW Forestry and

OVERVIEW Forestry and paper Mpumalanga accounts for 40% of South Africa’s forestry hectares. SECTOR INSIGHT Imvelo Forests is testing firedetection by thermal imaging. • T h e C o m m u n i t y Conservation Resilience Initiative has been launched in the province. Mpumalanga has South Africa’s biggest sawmill and its largest panel and board plant, together with the biggest integrated pulp and paper mill in Africa. The forestry sector comprises logging, saw-milling, wood product and pulp and paper manufacture. Pulp and paper are the main industry exports, along with sawn lumber, wood chips and wattle extract. The major export markets are the Far East, Europe and the UK. Timber volumes started increasing in 2014 and continued for most of 2015 but the drought affecting most of the nation then had an impact. York Timbers is reporting increases in production volumes, revenue and profit. This Sabie-based company, together with large global brands Sappi and Mondi, are the largest companies operating in the forestry and paper sector, which accounts for 8% of Mpumalanga’s gross geographic product. York Timbers has 61 000 planted hectares, five sawmills and a plywood plant. York Timbers is spending about R1-billion on the upgrade of its Sabie plant. Global paper giants Sappi and Mondi have extensive plantation holdings and mill operations in the province, while Komatiland Forests (a 100%-owned subsidiary of state company SAFCOL) has big plantations in several districts. The group turned a R55.7-million profit in 2015 on the back of improved log sales and cost-cutting. TWK is a R6-billion agricultural company with its headquarters in Mkhondo (Piet Retief). Asset management company Global Environment Fund created Imvelo Forests in 2013. In 2015, the company investigated using thermal imaging to detect fires. A technology developed by Insight Robotics claims to be able to spot a single tree on fire within a 5km radius (SA Forestry). Among the other private timber growers in the province are Pull Scar Timber Co, and United Forest Products. The Community Conservation Resilience Initiative (CCRI) has been introduced to Mpumalanga, on the basis that local communities can play a big role in biodiversity conservation and restoration. The first two communities to be part of CCRI are Mariepskop and Houtbosloop Valley. Private rail operator Sheltam specialises in transporting paper and pulp, and the company also has extensive operations in Mpumalanga. MPUMALANGA BUSINESS 2017 40

OVERVIEW Forestry The South African forestry industry is valued at R40-billion per year. The National Department of Agriculture, Forestry and Fisheries reports that South Africa has a shortage of sawn timber and that this problem is set to get worse. Timber volumes are down quite substantially from 2008 when 19-million tons (mt) were harvested, but in 2015 a figure of 15.8mt was recorded, bringing in R28.1- million in revenue. Production dropped quite substantially in the final quarter due to the drought, but a similar total tonnage was expected to be harvested in 2016. The forestry sector accounts for about 12.3% of the nation’s agricultural GDP, while the forestry products sector contributes about 1% to national GDP, as it has done for many years (Forestry South Africa). Mpumalanga has the ideal climate and topography for forests. Sabie and Graskop represent the hub of the industry, but commercial forests are also found to the east and south along the Swaziland border. About 11% of the land mass is forested, with 4% of that being natural forest. The province is the national leader in total hectares under forest (514 000) and export earnings. The Lowveld Botanical Gardens in Nelspruit has more than 650 of the 1 000 trees indigenous to South Africa. The Council for Scientific and Industrial Research’s (CSIR) forestry-research unit aims to improve tree breeds. Mondi has instituted an ecosystem management plan throughout its forestry operations, with the intention of better managing the impact its work has on the environment. Some areas have been set aside to cater for biodiversity and endangered species. Sappi Forests’ purchase of the 14 500-hectare Sjonajona plantation took the paper and pulp manufacturer’s plantation ownership in Mpumalanga up to 229 000 hectares, of which 143 400 hectares is planted. The Industrial Development Corporation has a stake in York Timbers and a 42.6% share in Hans Merensky Holdings, a company with timber and processing interests in three provinces. Merensky is responsible for 20% of South Africa’s sawn pine lumber. The commercial-forest sector offers attractive business opportunities for small-scale entrepreneurs, particularly small-scale growers, contractors and sawmillers. The pulp and paper industry is ideal for recycling. Forested areas lend themselves to bee-keeping and honey-making. PG Bison operates a sawmill in Empuluzi, while Mondi’s softwood sawmill in Sabie is South Africa’s largest of its type. Sonae Novoboard’s panel and board plant is likewise impressively big. The biannual Sabie Forest Fair is a major event on the forestry calendar as well as on the region’s social calendar. Pulp and paper Wood from the Sjonajona plantation will help Sappi achieve selfsufficiency at its massive Ngodwana Mill, which has annual capacity to produce 140 000 tons of newsprint and 240 00 tons of kraft linerboard and white-top linerboard. Although local demand is dwindling, the export market for pulp and paper from South Africa remains strong. Pulp production figures have been on the rise for several years and companies like Mondi are increasingly focusing on pulp export because of the better margins that this product offers. ONLINE RESOURCES Forestry South Africa: National Department of Agriculture, Forestry and Fisheries: Paper Manufacturers of South Africa: South African Institute of Forestry: Technical Association of the Pulp and Paper Industry of South Africa: Wood Foundation: 41 MPUMALANGA BUSINESS 2017

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