Siyathuthuka Timber Co-op provides marketing benefits to small growers

October 31, 2009

Siyathuthuka Timber co-operative held its third AGM in the Dalton Farmers Hall in August. There was once again an exceptional turnout with over 200 members from across KwaZulu-Natal attending.

Siyathuthuka depot Siyathuthuka Ozwathini depot
Offloading timber at a Siyathuthuka depot, KZN Midlands. Siyathuthuka's Ozwathini depot.

The Chairman, Moses Ngobese, reported steady progress in the growth of the co-op despite the dramatic downturn in the markets for round wood and wattle bark since December. The co-op currently operates two fully serviced depots, one at Ozwatini and the other at Matimatolo. Plans are currently afoot to open a third depot at Swayimani. This latest development has been made possible as a result of a generous grant from UCL Co. Ltd. amounting to some R50 000, for which members were very grateful. In addition to this support, Siyathuthuka has also received a grant amounting to R500 000 from NTE Co. Ltd. who also provides mentorship for the co-operative.

A generous grant of R500 000 from the Department of Economic Affairs made it possible for the co-op to purchase a tractor for in-field transport, which has always been a headache for these growers, and to fence and harden the existing depots.

By organising their own loading and sale of timber and wattle bark, the Siyathuthuka members are maximising the income derived from these products and the returns from their timber holdings. With the generous contributions from the Department of Economic Development, UCL and NTE and prudent management of their funds, the co-operative continues to grow and extend the services to its members.

Mr Bruce Findlay, the NTE Accountant who provides accounting oversight for Siyathuthuka, reported that despite a dramatic market downturn for both timber and bark towards the end of the 2008/09 financial year, Siyathuthuka registered a 54% growth with some 6 252 tons of timber being delivered to the two depots.

Similarly, wattle bark sales increased by 72% to 943 tons. This growth in sales is expected to continue in the coming season, particularly when the third depot becomes operational.

The slow-down in recent sales resulting from the sudden downturn in the market has resulted in the depots registering a small loss amounting to R200 000 during this period. This is attributable to moisture loss in the depots as the co-operative waited for instruction to deliver ordered timber. The depots were subsequently closed for a short while and it is expected that the loss will be recovered once the market returns to normal.

Reports by Messrs Konrad Klip (Chairman of UCL) and Harald Niebuhr (Managing Director of NTE) on the wattle extract market followed a similar refrain, with the sudden downturn in the wattle extract market necessitating dramatic adjustments to the wattle bark intake during the past season. The market is returning to normal and bark intake this coming season is expected to improve.

Published in September/October 2009

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