With a secure supply of roundwood, the Hamann brothers are quietly building an integrated timber business in southern KZN and the Eastern Cape. The brothers Rico, Pat and Ebrian, are fourth generation sawmillers who have pulled themselves up from the typical Eastern Cape ‘bush sawmill’ business and now operate a ‘formal’ sawmill, Khulanathi, on the Singisi road, a joinery workshop in Harding and two mobile bushmills in Mt Frere and Highflats.
Pat, Ebrian and Rico Hamann at the Khulanathi Sawmills.
|The double log edger in action.||Coffins are one of the product lines at Aljo.||Keeping it in the family … (from left) Margaret, Nicolene and Marcella Hamann take care of the admin side of the businesses|
Two years ago when SA Forestry magazine visited Khulanathi sawmill, they were still establishing themselves on a piece of land leased from the tribal authority, close to Merensky’s Singisi plantations. Now, the mill is in full swing with a large covered area housing a well-equipped saw shop and a range of saws, including a Klüver manufactured double log edger, a Timber Rite multi-rip saw, a narrow band board edger, a double band re-saw and a couple of Wood-Mizers.
There is a separate workshop for the maintenance of equipment and vehicles and a site office.
The Hamanns have recently purchased kiln equipment at an auction and are busy building themselves a kiln at Khulanathi. This will enable them to add value by drying the sawn timber, which will give them access to a wider, value-added market.
The mill currently produces 350 m3 wet-off-saw structural timber a month, which is sold to hardware stores across the old Transkei, Lesotho, East Griqualand and southern KZN around Harding, Highflats, Izingolweni and Port Shepstone.
The market for wet-off-saw timber in the Eastern Cape area is highly competitive. Pat Hamann told me that there are some 30 ‘bush mills’ operating in the old Transkei. These millers, most of whom have learned their trade from the Hamanns’ father Sydney and grandfather Wilhelm, and many of whom are related to the Hamann family, have very low overheads and purchase roundwood at reduced prices from the DAFF plantations. The price they pay is less than half of the current roundwood market price (eg. A logs: R130 vs R399 m3; D logs R270 vs R659 m3).
According to Pat, the problem that the small ‘bush’ sawmillers face is that they are only able to purchase 200 m3 a month from DAFF, and this is not sufficient raw materials on which to build a viable business – even though it is purchased at reduced prices.
Khulanathi sawmill has a contract with Merensky who supply them with 700 m3 a month. In addition, the Hamanns source some 1 000 m3 a month from private growers. This provides sufficient raw materials to supply their Khulanathi sawmill, plus two mobile ‘bush’ sawmills which they operate at Mount Frere and Highflats. These mills utilise portable Wood-Mizer saws which they move as close as possible to the source of the timber.
The Merensky log supply contract originates from a contract the Hamanns had with DWAF to purchase 350 m3 a month. When the Singisi plantations were taken over by Merensky, the supply contract was carried over. The Hamanns subsequently bought a cousin’s sawmilling business and took over a 350 m3 a month supply contract with Merensky, giving them a total of 700 m3 a month.
“This has given us sufficient volumes to be able to grow our business,” commented Pat. “If we were restricted to the 200 m3 a month that the bush sawmillers are getting from DAFF, we would not be where we are today.”
Rico said that Steinhoff (PG Bison) are also offering them timber in Ugie, and so they are planning to establish another bush sawmill there soon.
“Access to timber is what this business is all about,” said Rico Hamann. “Without a guaranteed sustainable supply of raw materials, you can’t get bank loans and you can’t produce sufficient volumes to sustain growth.
“We basically scavenge for timber all over, and we just move our bushmills to wherever we can get it,” he said.
It is no surprise then that the Hamanns are keen to get involved in community forestry projects in southern KZN, and have been talking to communities in the area. However, although there seems to be plenty of suitable land available, the catchments are currently closed to forestry due to the unavailability of water use licences for these areas.
The Hamanns have also been liaising with Peter Nixon of Rural Forest Management (RFM), who is involved in the management of community forestry projects in southern KZN and Eastern Cape. Peter said that the Hamanns are purchasing roundwood from the first thinnings of eight-year-old Pinus patula, which is part of the RFM-managed Mabandla community forestry project at Umzimkhulu. The Mabandla community has 440 ha of pine planted in a sawlog rotation.
Peter told SA Forestry magazine that he has been approached by several communities in Mount Fletcher and Maclear who are keen to get involved in forestry, so if these projects get off the ground, they will provide significant sawlog resources in the future, which is good news for sawmillers.
“We want to secure a timber supply for the next generation of Hamann sawmillers,” said Rico.
The Hamann brothers are not only focusing on the raw material supply side of their business, they’re also busy adding value on the production and marketing side. The kilns that they are busy building at the Khulanathi sawmill will add value to their sawn timber products, and they expect to be up and running in a few months.
Earlier this year, they bought Aljo Timber Products in Harding, which manufactures a range of products, including household and garden furniture, knotty pine ceilings, floor boards, coffins, windows and doors. The timber is supplied mainly from the Khulanathi mill.
A major benefit of this arrangement is that it improves the profitability of Khulanathi sawmill because they can use every bit of timber, even off-cuts, in the joinery shop. Thus, the recovery rate at Khulanathi is 60%-65%.
Another brother, Douglas, is involved at the bushmill in Highflats and he supplies saligna timber to the joinery shop.
The Hamann brothers are continuing the proud family tradition in sawmilling which goes back for over a century. Their great grandfather, Wilhelm Hamann, started a pit sawmill in the early 1900s, sawmilling indigenous hardwoods in the natural forest around Stutterheim and Keiskammahoek in the Eastern Cape. The business was handed on to his son, also Wilhelm, who in turn handed it on to Sydney, father of Rico, Pat, Ebrian and Douglas.
It is still very much a family business as Rico, Pat and Ebrain’s wives take care of the admin side of their businesses from an office at the joinery works in Harding.
Rico and his brothers are members of Amahlathi Entrepreneurs Forum, and have established a co-op with 13 Eastern Cape sawmillers. Their plan is to set up kilns and a timber treatment plant so that members can add value to their products and gain wider market access. However, Rico says they have not been able to access the necessary finance as the sawmillers don’t have secure timber supply contracts.
Nevertheless, he maintains that there are opportunities out there, but he believes that most of the small sawmillers are scared to access additional timber at the market price because of the vast price difference between the DAFF and the market-related prices. They have the technical skills but they’re short on business confidence and are caught in a Catch 22 situation.
Meanwhile, the Hamann brothers have shown that, with a secure and sustainable supply of raw materials, it is possible to take the next step and set up a sustainable, integrated timber business.
Published in June 2010