Agri-boffins have their roots in timber

January 12, 2015

Driving around the rural towns of KwaZulu-Natal, Mpumalanga and even into the Eastern Cape, you are likely see the TWK logo almost everywhere, and may wonder what it is exactly that they do. Well, the answer is that they do a lot of things, but all of them are geared to providing goods and services primarily to farmers. TWK Agri, as it is known today, is a highly diversified group of companies with its roots in timber, owned and managed by farmers for farmers.

Timber entering the SAWCO yard at Shiselweni is scanned and sorted for different end uses by the conveyor system.
Every seventh row has been removed in a thinning operation, and disced in preparation for planting with a short term crop. It will serve as a ‘green belt’ and fix nitrogen in the soil, which will benefit the trees.

 

TWK has its origins in the Piet Retief Wattle Growers & Timber Association, established by a group of 12 farmers in 1938 to help them market their wood and wattle bark.

Two years later, the members of this association and other timber farmers in the district established the Transvaal Wattle Growers Co-operative Agricultural Company Limited, under the chairmanship of farmer and lawyer Paul Olmsdahl.

Their objective was to market timber and bark on behalf of members, but more specifically to control the production of wattle bark so as not to flood the market.

Over the next 70 years TWK developed organically to meet the needs of its members, transforming itself into a private company in 1998. The 500 members of the co-op became shareholders in the company.

Today the growing, processing and marketing of timber is still central to TWK’s business, contributing some 30% of total turnover.

Besides timber, TWK-Agri comprises a number of divisions:

Grain: storing, processing and marketing grain;

Trade: fertilizer, animal feeds, fencing, hardware, irrigation equipment and more;

Mechanisation: equipment, services, repair and manufacturing of innovative new agricultural equipment. TWK are suppliers of New Holland and Landini tractors, Miller Hoogloop Spuit and Camara feed mixers, among others;

Finance: seasonal credit facilities, month accounts, forestry loans and asset finance;

Insurance: crop, short-term, commercial and specialised insurance; and

Motors: the company owns a number of Toyota, Hino, Mahindra and Midas dealerships and a 67% shareholding in Protea Tyres Ermelo, which specialises in the retread of truck tyres.

The TWK group has its head office in Piet Retief, which is geographically located at the centre of South Africa’s timber belt, with 1 700 permanent employees. TWK retail outlets and offices are scattered far and wide across Mpumalanga, KZN, Zululand and Eastern Cape. Shareholders are primarily farmers, although shares are traded on an on-line over-the-counter platform at www.twkshares.com.

“Around 10% of shareholders are not farming anymore,” commented TWK Managing Director Andre Myburgh. “But the idea is to keep it as a farmers’ business.”

He says the company is currently engaged in a re-structuring process that will see a broad based black economic empowerment group, Vumbuka Trust, acquiring 25% of the shares in TWK Agri (Pty) Ltd.

Besides the goods and services they supply to shareholders and customers, TWK provides a wide range of development services to emerging farmers and agri-businesses. Emerging farmers can get access to finance and technical skills, plus business development support for emerging entrepreneurs such as broiler production and charcoal businesses. They buy and market charcoal and timber from small growers, and supply small ‘makapas’ timber businesses. On the grain side, they help set up maize meal ‘container’ spaza shops.

Timber business
TWK started out marketing timber on behalf of members, and later established their own sawmills. The co-op began purchasing grassland farms in the Piet Retief area and converting them to timber on a small scale. Then in 2001 TWK took a decisive step with the purchase of the Shiselweni estate in Swaziland, just across the border from Piet Retief. Shiselweni was planted in the 1960s by the Commonwealth Development Corporation.

Shiselweni comprises a total of 17 000 ha with 12 000ha planted to pine, gum and wattle and two sawmills, one producing industrial and mining timber and the other structural timber. TWK has added a charcoal manufacturing plant and recently a transmission pole facility.

TWK also owns plantations in South Africa, and manages around 1 500ha of plantations on behalf of shareholders and customers, bringing the total planted areas under TWK management to 18 000ha, and moving a total of around 1,2 million tons timber a year from own, managed and customer plantations.

Timber from the South African plantations is processed at the SAWCO sawmills at Shiselweni. Pulp timber is traded with Sappi or Mondi, or chipped at the TWK-owned chip export facility at Richards Bay.

Residue from the sawmills is sold to board plants in South Africa (PG Bison) and Swaziland (Montigny Investments), and also to the sugar industry.

TWK has recently established a transmission pole treatment facility alongside the sawmills to take advantage of the higher prices that they fetch in the marketplace. The E. grandis grown in the plantation is ideal for this purpose.

In keeping with their philosophy of innovating and diversifying, TWK introduced livestock into the Shiselweni Estate last year. The aim, according to the man in charge of the project, Pierre Henning, is to use livestock to reduce the fuel loads, clean under canopy vegetation and to manage open areas and reduce bush encroachment, while at the same time creating another source of revenue. There is a lot of synergy between livestock and forestry that TWK wants to exploit.

There are currently 459 head of cattle of mixed breed, mainly Bonsmara’s, and 192 Boer goats. One third of the estate has been fenced off for the TWK herd, while the other two thirds is used by cattle belonging to neighbouring communities under a permit system.

Another innovation is the creation of ‘green fire belts’ inside the pine compartments. Every seventh row has been removed in a thinning operation, and then disced with a view to planting a suitable short term crop like ground nuts. Trial crops will be planted in these belts come spring.

The Shiselweni plantation manager is Bob Tumber, a Swazi who started working here as a forester in 2005. He said silviculture operations are performed by a mix of own employees and contractors, while all the harvesting is outsourced. All of the contractors are Swazi-based businesses. Harvesting is motor-manual. TWK has been proactive in helping emerging contractors to develop their businesses.

The estate is surrounded by poor rural communities who rely heavily on the Shiselweni team for assistance. Bob says they have partnered with several schools to provide support, and have helped with water supply projects and honey bee projects.

Community cattle are allowed to graze in certain areas in terms of agreements with local chiefs, and the people have access to clearfelled compartments on designated days to collect firewood.

“I would say we have good relationships with our neighbouring communities, we depend on each other in a lot of ways,” said Bob. Shiselweni and SAWCO workers are recruited primarily from surrounding communities.

Shiselweni has achieved FSC certification under TWK’s ownership, and there are still a lot of old stumps visible in riparian zones where trees were removed to comply with the FSC requirements.

TWK’s business philosophy is based on adding value to timber wherever possible and supplying diversified markets in South Africa, Swaziland and Mozambique. The chipping facility at Richards Bay exports hardwood chips mainly to the East. They purchase standing timber from shareholders and customers and help with the transport logistics, whether it be road or rail.

TWK also runs a nursery in Piet Retief which supplies commercial tree seedlings to their own plantations as well as forestry customers.

Martin Motsa, pine sawmill manager at Shiselweni.
The pine sawmill at Shiselweni produces 100 cubes of structural timber a day.
Timber unsuitable for sawing, poles or pulp is turned into charcoal at this kiln (above) at Shiselweni.
The TWK chipping plant and export facility at Richards Bay.
TWK chips heading for market in the East.
Nursery manager Rita Roberts, Johan Nel (TWK R&D manager) and SA Forestry editor Chris Chapman visiting the nursery.
TWK workshop in Piet Retief supplies and services agricultural equipment.
Pierre Henning with some of his breeding bulls ... Pierre is in charge of timber harvesting at Shiselweni, as well as the livestock project.
Bob Tumber, Shiselweni forestry manager.
Cattle damaged ... this is what happens when cattle get into young compartments.
Preparing to plant timber at Shiselweni. This compartment was ripped to try and improve growth.

TWK involved in community forestry project

TWK manages a 1 000 ha farm outside Piet Retief on behalf of the Amangcamane Community Property Association. The land, with around 500 ha planted to gum (mainly E. dunnii and E. macarthurii), was bought by government in terms of its land reform programme and transferred to the CPA.

Much of the work to date has involved establishing a rotation system and cleaning up open areas. The plantation is FSC certified.

Technology transfer & mentorship
According to TWK’s R&D manager, Johan Nel, the contract is for an eight-year period (one rotation) in terms of which TWK provides management, technical guidance and mentoring. Silviculture operations on the farm are performed by the CPA under the guidance of a TWK forester, while the harvesting is outsourced to a contractor. Labour is sourced from the local communities.

The CPA has used revenue from timber sales to build a store-room, workshop, office and accommodation for a fire team, and to purchase a fire-fighting unit. Johan says plans are to introduce livestock on the open areas to diversify the business.

Each of the 50 households that are members of the CPA has received R10 000 from timber sales to date. More importantly, the forestry business is operated on a sustainable basis with the balance of the profit being ploughed back into the business with a resultant growth in asset value.

“We are learning new skills and we will transfer them to our children,” commented a member of the CPA management committee, Elizabeth Bhembe.

“Thanks to TWK and thanks to government for giving us an opportunity to improve our lives through this project.”

Members of the Amangcamane CPA Themba Maseko and Elizabeth Bhembe with the TWK forester who works closely with them, Dollos Uys.
Amangcamane CPA workers doing maintenance in a young eucalyptus compartment on the community farm.

*Published in August 2014

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