Umgano Devco CEO Zweli Baleni.

Forestry, farming, eco-tourism, sawmilling, training …

The pioneering Umgano Community Initiative, built on a solid foundation of forestry, has progressed to the next level with the recent opening of a sawmill. The business, started by members of the Mabandla Community near Creighton in southern KZN nearly 20 years ago, has become a model for rural development, bringing jobs, skills and opportunities where none existed before.

The leadership behind the Umgano Initiative is the Mabandla Community Trust, headed up by current chairman, Mayford Jaca. Inkosi LT Baleni, Chief of the Mabandla Tribal Authority, has also played a pivotal role in the project from the outset.

The Trust was instrumental in mobilising the funds required to establish 850 ha of eucalyptus (for pulp and poles) and 450 ha of pine on a sawlog rotation back in 1998. This included a R11 million ‘Subsistence Land Acquisition Grant’ from government to Mabandla community members, which was committed to the project, plus a R2 million loan from the Land Bank. A commercial forestry business owned by the Trust, Umgano Development Company (Pty) Ltd, was established to run the Trust’s business interests, which started to generate revenue in 2008 when harvesting of eucalyptus timber commenced.

According to Umgano Devco CEO, Zweli Baleni, a decision was taken by the Trust right from the outset to re-invest the proceeds of the forestry business to create further agricultural and commercial businesses that would further empower the community.

“We aim to utilize our land in a sustainable manner for the benefit of the Mabandla community,” said Zweli.

This has seen the establishment of community agriculture and livestock businesses, and an eco-tourism business. A strategic partnership with Ezemvelo KZN Wildlife, which resulted in the establishment of a 1 500 ha nature reserve on Mabandla community land, provides a platform for the eco-tourism business.

Sawmill
Meanwhile the commencement of thinnings operations in the pine compartments created an opportunity to launch a sawmilling business. A new company, Umgano Timbers (Pty) Ltd, was set up for the purposes of running the sawmill. It is owned by Umgano Devco  (70%) and Umsonti Community Forestry (30%), a non-profit organization focusing on community development. The directors of Umsonti are forestry and development specialists, some of whom have been working with the Mabandla Community since the inception of the Forestry Business in 1998 (namely Peter Nixon and Themba Radebe).

The first log is processed at the sawmill launch, signaling the start of another exciting phase for the Umgano Project.

Funding required to establish the sawmill came from a R1,4 million loan from IDC and R400 000 raised by the Devco and R200 000 raised by Umsonti.

A reconditioned Wood Mizer LT20 breakdown saw and a Wood Mizer multi-rip board edger which cuts the timber to size, makes up the backbone of the mill. These machines will be used to produce wet-off-saw structural lumber for local markets. In addition a pallet line and a re-saw are being set up to handle the material that is not suitable for structural timber.

Local entrepreneur Dave Wigley has designed and built the sawmill from scratch and will manage it going forward. Dave said that Phase One of the sawmill development would create 17 jobs, and Phase Two 24 jobs. The sawmill currently employs 11 people, all of whom come from the local community.

Once completed, the sawmill will produce around 150 cubic metres of structural timber and another 150 cubes of pallet material per month. All the raw material will be sourced from the community forestry.

Sawmill manager Dave Wigley and saw operator Nkosivumile Sithole.

Projected annual turnover of the mill is R4,6 million.

Self-reliance is a key objective of the business. The timber used to construct the sawmill buildings was sourced from the community plantation, and was sawn and treated on site. Power for the sawmill is supplied by a diesel generator, but plans are in place to generate energy on site using sawdust waste and off-cut slabs together with solar and wind power (there is no Eskom power at the site).

Training Academy
The need to provide skills training to employees of the sawmill and the other businesses has seen the Umgano Devco partnering with established training development service providers to establish the Umgano Training Academy. The Academy has secured discretionary grant funding of R3 million from the FP&M Seta to create bursaries for five community members to attend university, and set up the training facility at Mabandla.

According to Jonathan Wigley, the Umgano Devco’s partner in the training enterprise, the Academy’s first priority will be to train members of the Umgano Devco with the skills required to operate their various businesses effectively, and thereafter to provide training opportunities for the wider community.

Thus training courses will initially focus on skills required in the forestry, sawmilling, agricultural crops, livestock and eco-tourism businesses.

The Academy has partnered with KwaMahlati Training Services, based out of Crammond, to assist with the development of training materials and to provide access to facilitators, assessors and moderators, until it can stand on its own feet. It is also co-owned by Umsonti NPC.

“Providing accredited training will play a vital role in the success of the whole initiative,” said Jonathan.
In addition the Academy will look at meeting the needs of the broader community by providing adult education, upgrading science and maths learning, and general business skills training. There are moves afoot to provide forestry and agricultural training to Government, with one contract currently being initiated with the Eastern Cape Rural Development and Agrarian Reform.

Forestry – the backbone of the project
The forestry business remains the backbone of the Umgano Initiative. The forestry company has its own directors who are accountable and report to the Devco Board.

Zweli said that the plantation is FSC certified, employs 120 people, and has a current asset value of R48 million. The business harvests 1 800 tons of timber per month. Markets for the Eucalyptus timber include Sappi-Saiccor and treated pole manufacturers. The Eucalyptus harvesting consumes roughly 90 ha of timber per annum, and this either has to be re-planted or coppiced.

Technical and management support for the forestry business has been provided by Peter Nixon and Themba Radebe of Rural Forest Management. They have been involved from the very beginning, engaging with the community, securing planting permits, assisting with the sourcing of funding, set-up of the business structures, establishing the plantations on the hills around the Mabandla settlement, and on-going business support.

Recently James Ballantyne of Umsonti has been assisting with the harvesting methods and efficiency and with the start of the pine thinning activities to supply the sawmill.

All silviculture and harvesting operations are handled in-house under the watchful eye of Deron Bhengu (silviculture foreman) and Bheki Mhlungu (harvesting foreman), who report directly to Zweli Baleni.

Meanwhile the Umgano Devco has applied for permits to plant an additional 200 ha of pine to boost the sawmill’s raw material resources.

Speakers at the Umgano Timbers sawmill opening (left to right) Jonathan Wigley, Mr Mavuma (Harry Gwala District Municipality), Mayford Jaca, Nkosi Baleni and Stuart Bartlett of IDC.

Guests and staff at the sawmill opening.

IDC has come on board with a loan to enable management to upgrade the transport and loading capacity of the Umgano Project.

*First published in SA Forestry magazine, Aug 2016