Sappi builds smart nurseries for a changing environment

Bongani Shozi the Nursery Manager welcomes the visitors to Clan Nursery

Sappi's nursery transformation began with a fundamental question: how could the company simultaneously reduce unit costs, improve productivity, increase survival rates of seedlings before and after planting, and minimise its reliance on chemicals for pests and disease control while mitigating climate change? 

Wynand de Swardt, Sappi South Africa's Divisional Nursery Manager, says the answer lay in over 25 years of tree breeding at the Sappi Shaw Research Centre and a lean-driven approach to identifying areas for improvement in its four nurseries. 

Extreme weather conditions and the noticeable shifting seasons with later summer rainfall are reducing or extending the planting season, depending on the location and site conditions of the plantations. Hence, there is a drive for developing drought, frost, disease tolerance, volume growth, and pulp yield. 

Tree breeding

Traditionally, tree breeding programmes are initiated by making mass selections in commercial plantations. This is followed by grafting, collecting seeds, establishing provenance trials and then waiting 10 to 20 years for test data, depending on the species. 

Damien Naidu, Sappi's General Manager of Research, Planning and Nurseries, says the company realised early on that the best climate change adaptation strategy is an accelerated and holistic tree breeding programme. 

Molecular technology and biotechnology tools allow a breeder to recover progeny data from existing plantations, predict breeding values and identify genetically superior individuals at the initial stage of the breeding program, effectively speeding up improved growing stock by at least a decade.

Hybrids

The rapid shift from planting pure species to more productive, better adapted, and pest- and disease-resistant hybrids is transforming the profile of hardwood and softwood trees grown in Sappi's South African plantations.

Speaking at the recent Modern Silviculture Symposium: Silviculture 4.0 in Howick, KwaZulu-Natal, Wynand said, "The main objective of a nursery is to have plants ready when customers need them. A nursery is a profit centre adding value to our operations by ensuring that quality seedlings are produced efficiently, safely, cost-effectively and in time by well-trained and engaged staff".

That is easier said than done. Nurseries must be resilient to meet the demand for plants in a shorter time while the costs of resources and labour escalate. These challenges are magnified by ageing nursery infrastructure, broken process flows and increasing risks from pests and diseases driven by the changing environment and a lack of approved chemicals. 

A quicker turnaround time was critical for tree breeders and planners to cope with a globalised world's dynamic challenges and demands. Something had to change because Sappi's nurseries were not meeting their customers' demands and needs. 

Sappi has four nurseries, Ngodwana and Escarpment Nurseries in Mpumalanga and Richmond and Clan in KwaZulu-Natal. They produced 57.5 million seedlings in 2023 (47 million in 2017), 43 million for Sappi's plantations and 14.5 million seedlings were sold to other growers. It also significantly increased external seed sales. 

Wynand said the developments at Sappi's state-of-the-art Clan nursery at Albert Falls in the KZN midlands were central to rapidly deploying improved trees into the plantations. To get to this point, he gave the attendees at the silviculture symposium a brief history of the company's nurseries and some of the operational challenges that arose. 

In the beginning

In October 1988, Sappi bought the Waterton Timber Company and its nursery in KwaMbonambi, KwaZulu-Natal (KZN) in October 1988. E. grandis was the primary genotype cultivated in open hedges and tables, which exacerbated its tendency to be disease-prone. Water supply was always a challenge. The nursery was later closed.

Construction work on the Ngodwana Nursery near Machadorp in Mpumalanga commenced between 1986 and 1989, and it soon produced 18 million seedlings a year. Improvements in tree breeding and processing technologies put pressure on the Ngodwana Nursery. In 2015, Sappi rebuilt it to deliver 10 million seedlings and 7 million cuttings. 

"Our focus on productivity led to clonal development and we had to adapt the nurseries from producing plants from seeds to cuttings. Changing a nursery system is a significant investment in the future and involves the whole silviculture value chain", Wynand remarked.

The Richmond Nursery was established as a cost-effective operation in 1992, with 36 permanent staff producing 16.5 million seedlings. However, it suffered severe storm damage and, with a single borehole, ran into water supply issues.

Twello Nursery was acquired in 1996 near Barberton in Mpumalanga. The open root nursery produced P. patula, P. taeda and P. elliottii from seeds. Encouraged by the results of research into pine-cutting propagation, Sappi established a one million cuttings operation at Twello. 

Escarpment Nursery was next and saw several changes, enlargement, and improvements, including the growth of hedges in bags and shade-netted structures over 25 years. It had a capacity of 3.2 million pine cuttings. 

Clan Nursery

Wynand said Clan Nursery's development began in 2011 as a greenfield project. "The site was carefully selected to ensure sufficient electricity and water of the required quality and, importantly, it could provide employment for people from nearby communities". 

In the first phase, Clan was designed to produce 7 million GU (E. grandis x E. urophylla) seedlings. In the second phase, it expanded to produce 17 million GU, GN (E. grandis x E. nitens) and PPTL (P. patula × P. tecunumanii low elevation) seedlings. 

Going lean

When it was time for phase two, Wynand explained, they formed a multi-disciplinary team led by a process engineer. They did value stream mapping, time studies, root cause analysis and fault tree analysis. 

The outcomes were two main goals:

"Our lean team identified focus areas and developed a lean action plan. The objective was to reduce unit costs and increase revenue. Numerous time and work studies highlighted areas that would boost productivity. For example, time studies showed that it took, on average, 2,5 hours to get cuttings from the rooting hedges to propagation and into the germination tunnels". 

Rooting efficiency

Wynand said, "In 2013, we engaged with Ellepot because rooting efficiency is critical", he said. Instead of planting a seedling into a plastic insert in a Unigrow tray, Ellepot is a plug wrapped in degradable paper that is not removed when planting".

An Ellepot FlexAIR propagation system was installed. The machine automatically deposits the growing medium onto the paper, encloses and glues the paper around the medium to form the pot shapes and places it into the trays reading to receive the cuttings. 

The Ellepot system facilitates benefits, including an air-pruned root system and a stabilised plug that can be handled early in the nursery cycle. It is also well suited to manual and mechanised planting in the field. 

Sappi and Ellepot invested months in developing a tray system for the Ellepots that met Sappi's unique requirements. Bongani Shozi, Clan's Nursery Manager, said the many benefits of the new trays include perfectly formed root architecture, ease of handling, and no time wasted searching for inserts infield and washing trays and inserts when they return from the field. 

"The biggest benefit for us is that we can get the plants out of the nursery two weeks earlier than before. We have reduced the transit time and transplant shock. The less stress there is, the better the rooting and less mortality because the plants capture the pit quicker and easier", remarked Bongani.

Productivity

Between September 2023 and September 2024, Clan's system changes included: 

Wynand said the outcomes of these changes are "just a step towards sustainability". 

The nursery facility now has a massive solar system with 2,5 hours of battery capacity, generators, and an upgraded pump room. Water is recycled, and the irrigation systems are optimised. Water storage was increased to five days. 

The Ellepots produce 75% of the product, and the Unigrow trays and inserts are used to increase production. The changes have increased Clan's Ellepot production to 28,000 pots per hour. Wynand said Bongani and his teams had an initial target of 17 million per year, which has been pushed to 20 million. 

Sappi's Escarpment and Ngodwana nursery upgrades are complete, and Richmond's is underway. Sappi's nurseries are integrated with its research and existing and new technologies to manage risk and improve silviculture practices and diversification into new processes, technologies and markets. 

By Joy Crane

Forest Pavilion at COP29 unites science and business for climate action

he UN Climate Change COP (Conference of the Parties) 29 gathering in Baku, Azerbaijan, in November featured its first-ever Forest Pavilion highlighting forests as the cornerstone of climate solutions. 

Teaming Up 4 Forests participated in the Forests Forward: Harnessing Science, Technology, and Innovation for Climate Finance & Action, a day organised by the International Union of Forest Research Organizations (IUFRO) and the Center for International Forestry Research – World Agroforestry Centre (CIFOR-ICRAF).

Teaming Up 4 Forests is a partnership initiated by IUFRO and Mondi in 2021. It aims to integrate new industry partners in the future to gain new insights, expand the network and broaden its reach in the forest-based sector.

The organisation showcased its achievements in bridging research and practice to support sustainable forest management and wood-based value chains, which are critical for meeting global sustainability targets. 

In a session on driving sustainable development through collaboration, Carola Egger, partnership manager, highlighted the platform's success in uniting scientists, businesses, and stakeholders over three years. 

"When science and business collaborate, we tackle the Sustainable Development Goals (SDGs), including Climate action (13), Life on land (15), Responsible consumption and production (12), Decent work and economic growth (8), and Partnerships (17)", Egger said. 

Maja Radosavljevic, partnership manager, presented the shared vision of the science-business partnership. She emphasised opportunities for joint action on critical issues such as climate change impacts, forest management, biodiversity, carbon sequestration, wood sourcing and forest-related value chains. 

"While we can all agree that scientific research provides crucial knowledge for sustainable practices, implementing insights and knowledge can be challenging in real life. Through our activities, we can identify the industry's barriers to implementing knowledge", she said. 

Think tank in April

The team announced a Think Tank Meeting on 1 – 2 April 2025, focusing on biodiversity conservation, wood production, and sustainable forest management. Scientists, industry leaders, and stakeholders are invited to find innovative solutions to urgent challenges in the sector.

Responsible forestry - the antidote to plastic

While life without plastic might be hard to imagine, there is a renewable, recyclable and sustainable alternative to single-use plastics and many other fossil fuel derivatives: wood from responsibly managed plantations and forests. This is the message from Forestry South Africa (FSA) ahead of the 54th annual Earth Day (22 April 2024).

“Since inception in 1970, Earth Day has grown into one of the largest civic events. Against the theme Planet vs Plastic, the need for solutions to ensure the health of the planet could not be more urgent, especially when it comes to dealing with the proliferation of plastic,” says FSA’s Dr Ronald Heath, adding that farmed trees have the unique potential as the starting block for countless materials.

A host of fossil-fuel derived, energy-heavy materials can be substituted with wood-based derivatives such as timber in place of steel and concrete, and specialised cellulose for textiles like viscose and rayon. Paper packaging is finding its way back onto supermarket shelves as brand owners make the switch from plastic. Cellulose and nanocellulose can be used as food additives, functioning as thickening agents, stabilisers or emulsifiers, providing a natural alternative to synthetic additives. Lignin, a by-product of papermaking, can be used as in agriculture, construction and for dust suppression.

“Our sector can even make polymers and chemicals out of wood. And, of course, wood and pulp provide the ingredients for everyday essentials like furniture and toilet paper,” notes Heath.

While wood holds promise in various industries due to its renewable nature, biodegradability and versatile properties, the key to a wood-based revolution is its sustainable, responsible production, the theme of FSA’s new video “What is responsible forestry?”

Across South Africa, from Limpopo and Mpumalanga, through KwaZulu-Natal, to the Eastern and Western Cape, there are 1.2 million hectares of commercial forestry plantations, more than 85% of which are certified as meeting the stringent environmental and social standards set by the Forest Stewardship Council® (FSC®). In addition, 40% of these plantations have international PEFC certification through the recently established Sustainable African Forest Assurance Scheme (SAFAS).

From these plantations, more than 15 million tonnes of wood and fibre are harvested annually and for every tree removed, another is planted in its place. This wood, grown using carbon dioxide (CO2), keeps carbon stored long after harvesting and transformation into timber for beautiful buildings, cellulose for high-end fashion, additives for food and pharmaceuticals, and bio-chemicals. One cubic metre of Eucalyptus wood removes around 880kg of CO2 from the air, storing around 240kg of carbon.

“South African forestry should be recognised as part of the solution for climate change, plastic pollution and rural unemployment. Wood is a renewable, low-carbon alternative to many of the drivers of climate change. Globally, forestry is considered an integral role player in a green economic recovery: certainly, this is the case in South Africa. It is time we promoted it as such, explaining what responsible forestry looks like and how it can be part of the solution to the environmental crises we currently face,” says Heath.

In an article by the Food and Agricultural Organisation, titled Time to realise the potential of sustainable wood for the planet, the authors make a strong argument for wood as a solution to climate change, believing wood can play a key role by substituting single use plastics such as drinking straws and food packaging as part of the global movement to end plastic pollution.

Responsible forestry goes way beyond the trees. As a rural industry in South Africa, forestry creates employment and entrepreneurial opportunities in some of the country’s most impoverished communities. Through social initiatives, it delivers education, health care, infrastructure and hunger eradication programmes.

Amid the forestry landscape, countless wetland, grassland and biodiversity conservation projects are underway in the 305 000 hectares of unplanted, natural areas within forestry landholdings.

Earthday.org seeks to end plastics for the sake of human and planetary health, demanding a 60% reduction in the production of ALL plastics by 2040. According to a recent study in the journal Science Advances, around eight billion tonnes of plastic have been produced over the past six decades, 90.5% of which has not been recycled, explains Aidan Charron from EarthDay.org.

“Our reliance on plastics could be the biggest gamble in the story of human health in history. We are all ingesting and inhaling microplastics. They are everywhere. Are we just hoping they are safe, or is even the remotest possibility they might be toxic so terrifying that we can’t contemplate it?” asks Kathleen Rogers, president of EarthDay.org.

The Great Woodchip Fire of 2023 … what now?

2nd October … smoke plume visible for miles around.

It has been dubbed ‘the Great Woodchip Fire of 2023’. It destroyed 200 000 tons of woodchips at NCT’s Richards Bay facility, severely damaged infrastructure and will leave a big hole in the forestry and wood processing value chains. But South Africans are a tenacious bunch, and as soon as the smoke had cleared the hard work of mopping up, assessing the damage and planning the repair and rebuild began. The optimistic expectation is that the timber at the NCT facility will be flowing on one chipping line within eight months, and business will be back to normal production within a year to 14 months.

Chip pile fires are notorious for their ferocity – especially when fanned by hot, gale-force winds – and they are always very hard to extinguish. And so it turned out at NCT’s chipping and export facility in Richards Bay when a fire broke out on a chip pile on the last day of September, and raged for 10 days straight, consuming two massive chip piles and threatening to spread to neighbouring businesses and suburbs. Fire fighters from far and wide, local businesses and the people of Richards Bay rallied around and finally extinguished the blaze on October 12.

NCT general manager Danny Knoesen and his team have spent the past few weeks tirelessly shuttling between the fire ground zero, the post-fire mop-up and rebuild war room, member tree farmers and NCT customers on the other side of the world to keep everyone informed, on board and to come up with alternative arrangements to mitigate the disruption to business that the fire has wrought.

2nd October … burning through the night.

According to current estimates it will take around eight months to get one chipping line going, while the team is considering the possibility of getting temporary chipping capacity in place even sooner. Current estimate is that the facility could get back to normal production levels in a year to 14 months. NCT’s plan pre-fire was to build a third chipping line by 2025, and this is still on the cards.

Good news

The good news is that the fire has been completely extinguished, and nobody lost their lives or their homes despite the highly dangerous conditions faced by NCT staff, firefighters, neighbouring businesses and local inhabitants.

The not-such-good news is that 200 000 tons of woodchips and round logs – i.e. all of the stock that was in the NCT yard at the time of the fire – has been destroyed or so badly damaged as to be worthless. There is also extensive damage to infrastructure including conveyers and gantries on both the wattle and Eucalyptus chip lines. It is nothing short of a multi-billion rand catastrophe.

4th October … fire still going strong.

NCT has declared ‘force majeure’ with three large export customers in China and Japan, and has already met with them to explain the circumstances and try find a way to mitigate the disruption to their businesses until NCT can get back to the business of supplying them with chips. Force majeure is a clause that is included in contracts to remove liability for unforeseen and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling their obligations in terms of the contract.

Impact on NCT member tree farmers

Then there is the inevitable slow down in timber flowing from NCT’s 2 000 member tree farmers who supply the co-op with their raw material, whose cashflow will be severely dented as a result of the fire. This will have a ripple effect, impacting on contractors and other suppliers who feed goods and services into this forestry value chain.

Danny admitted that the tree farmers are in a difficult situation as a result of the loss of stock and damage to the export facility, but the NCT team is hard at work to find ways to mitigate the impacts on them.

4th October … both chip piles burning.

“The wattle growers need to be able to harvest so the bark can be stripped and passed on to the bark factories at UCL and NTE, so we are by and large encouraging wattle members to continue to harvest, and to hold their timber stock in depot. We will add a few more ships to our Durban operation to try to mitigate the lack of wattle business for the upcoming season, and we think that TWK will do the same. So we could try and capture about 90% of the wattle season.

“On the euc side we will chase domestic markets to see what we can do to try and improve the euc offtake from our members – but that is going to be a challenge, especially for our smaller growers. We are looking at ways to mitigate that, but we don’t have all the answers yet,” said Danny.

As to the longer term impacts on the business, Danny believes they will not lose any of their regular customers as the demand for NCT’s woodchips will continue to be strong.

“We know our export customers will wait for us. We are an important cog in their wheel and NCT is a vital supplier to the pulp and paper sector in Asia, and once our facility is up and running we hope to get back to business as normal,” he said.

A commitment has been made by NCT to retain all their staff, who will be re-focused on recovery and rebuilding efforts. NCT employs 700 people.

7th October … excavators spreading and cooling the chip pile. Conveyor system damage visible.

Containing the fire

Another piece of good news: the fire didn’t spread to the chip pile at the TWK woodchip export facility situated right next door to NCT despite numerous incidents of spotting which were quickly extinguished. Nor did it spread to Foskor, a major manufacturer of fertilizers, located behind TWK. Foskor has stockpiles of sulphur and ammonia housed in their yard that are used in their manufacturing process, which could have caused extensive damage had they caught fire. Sulphur is highly toxic, and ammonia is like gunpowder.

More good news: despite the fact that at the height of the inferno burning debris was being blown by gale-force winds across the John Ross highway and igniting the brush and threatening nearby houses, these flare-ups were contained by firefighters from the municipality and local businesses as well as local residents armed with buckets of water and makeshift fire beaters.

7th October … nearly there.

Fish kill

Not-such-good-news: fish were reported to have washed up dead in a canal close to the NCT yard that is connected to the sea, possibly as a result of the water used in the firefighting activities that entered the storm water system which discharged into the canal. NCT has been issued with an environmental directive by the environmental authorities and they are responding to that directive. In the meanwhile NCT has called in Ground Truth, a multi-disciplinary consulting company with a specialist focus on issues surrounding water resources, biodiversity and environmental engineering, to help evaluate the causes of the fish die-off and limit the damage.

“We suspect at this stage that it was dissolved oxygen deficiency in the water, but we will wait for the results of the tests,” said Danny.

So what caused the fire in the first place?

Progress of the fire

Apparently it started under a conveyer system on the side of a chip pile that was not running at the time and had not been in production for 10 days prior to the start of the fire. The NCT team believe that it was not caused by equipment or the conveyor, it was not an accident and it was not arson and it was not caused by human intervention, and it was not internal combustion as it started on the outside of the chip pile. So at this stage it is a bit of a mystery.

In the meanwhile a thorough investigation into the cause of the fire is on-going, and hopefully it will come up with answers.

But what we do know is that a small wisp of smoke at the chip pile was first detected at 12.44 pm on Saturday 30 September. Within 10 minutes the NCT fire crew was on the scene under the command of NCT Operations Manager Ryno Martin.

Weather conditions at the time were hot, dry and windy. Despite the fact that the chips have a 30% moisture content, the fire, which started quite small, spread rapidly.

A second proto team arrived soon after with extra equipment. According to reports it looked like the firefighters may be able to contain the blaze, but at 4.45 pm the wind suddenly switched around from north east to south west, blowing at around 50 km/hour. This overpowered the good work that had been done and the fire got away.

Aerial water bombers despatched by the Zululand FPA were unable to attack the fire due to the dangerous conditions.

By 11 pm that night the second NCT chip pile was ablaze, and by Sunday morning the scene was like ‘hell on earth’ with the smoke plume visible for miles.

Additional fire fighting resources from all over started arriving during the day including from uMhlathuze Municipality, Transnet, Mondi, South32 and Sappi to assist the now exhausted NCT fire fighters. Fixed wing fire fighting aircraft from the Zululand FPA and the KZN FPA based in Howick as well as helicopters from Working on Fire and specialised units from ADT joined the fray.

Due to the heat of the fire and the weather conditions they were unable to contain the main blaze, and the focus shifted to preventing the nearby TWK chip pile from catching fire and setting off another chain of destructive fire events.

8th October … mopping up.

Under control

By 9th October the fire was under control and excavators were deployed to spread out the chip piles, further cooling the blaze. By the morning of the 10th October, the fire was finally extinguished.

The manner in which local people and businesses and authorities all came together during the crisis to assist and support the fire fighting effort was quite remarkable, and has not gone unnoticed. NCT sponsored an entire supplement in the local newspaper to thank everybody for their good will and their support during the fire.

Now it’s all hands on deck to get back to business, and to rebuild the facility - with enhanced fire fighting capacity. Many hard lessons have been learned from the Great Woodchip Fire of 2023, and hopefully these will prevent future fire catastrophes.

NCT General Manager Danny Knoesen (pictured) and his staff have got a big job on their hands to get NCT back to business as usual.

*All fire photos by Neels Reyneke

Monitoring & reporting emissions empowers growers

There is a lot of carbon locked up in the growing trees and roots as well as the harvested logs, and even the harvest residue lying in-field.  Emissions generated during the harvesting operation and the burning off of harvest residue will be off-set against the carbon locked up in the wood to calculate the carbon balance.

Plantation owners in South Africa with more than 100 ha of trees in the ground are required to report their carbon emissions on an annual basis, in terms of Greenhouse Gas regulations gazetted in 2017.

This requirement is likely to send a shiver down the spines of tree farmers, who are already burdened with dozens of laws and regulations requiring their attention and compliance. More red tape, more admin … and calculating carbon balance is a daunting prospect as it is not something they learned in forestry school. This is why only a few big plantation owners in South Africa are currently reporting their carbon emissions, while the majority of growers have not yet complied with the GHG reporting regulations.

And don’t for a moment think that you can bury your head in the sand and wait for the carbon reporting thing to go away. It won’t! It is going to become a bigger issue going forward all around the world as greenhouse gas emitters come under increasing pressure. They will be taxed, punished and eventually shut out of international markets.

But fear not! The Sustainable African Forestry Assurance Scheme (SAFAS), in collaboration with the Paper Manufacturers’ Association of South Africa (PAMSA) and the Department of Forestry Fisheries & Environment (DFFE), has unpicked the knot and developed a protocol to make carbon reporting for plantation owners do-able, effective and relatively simple.

“But forestry is sustainable, renewable, it sequesters carbon out of the atmosphere and stores it in the wood, and so why do we now have to jump through these carbon reporting hoops?” I hear you cry.

Exactly! Forestry is located on the positive side of the carbon equation and this is going to become a massive advantage for this sector going forward. But first we have to monitor our emissions, calculate our carbon balance, so that we can access those advantages and reap the full benefits of growing trees. This process is going to become a way of life for foresters.

Sappi mill ...one of the key aims of the SAFAS protocol is to enable wood processors to offset the carbon locked up in third party timber against their carbon tax.

Dave Everard, chair of the SAFAS Council and former Group Environmental Manager at Sappi Forests, has been involved in the development of the SAFAS carbon reporting protocol. He gave a very succinct presentation at the recent SA Institute of Forestry AGM on the ‘why’ and ‘how’ of carbon reporting.

Some background: PAMSA approached the SAFAS team a few years back with a request to develop a carbon reporting protocol for forest owners that is accurate and verifiable. PAMSA’s motivation is to enable wood processors (pulp mills, sawmills etc) who are required by law to pay a carbon tax, to offset the carbon stored in the timber they use as raw material. Currently processors can only offset the carbon sequestered in their own timber that they grow themselves on their own farms. As it stands now, mills cannot offset the sequestered carbon contained in third party timber that they buy in, and over which they do not have operational control.

Why? Because there are concerns around the chain-of-custody and how to verify the carbon claims of third party growers. This is a big problem for the processors who must procure timber from outside of their own business to keep their mills running. It’s going to get costly.

It’s also a big problem from the point of view of plantation owners who may experience declining demand for their timber as a consequence.

The SAFAS carbon reporting protocol is therefore designed to not only facilitate accurate, do-able carbon reporting for timber growers, it must also be verifiable so that it can be endorsed by the tax authorities. The first part has been achieved – the protocol is up and running and the system has been tested (and verified) on 20 farms in a pilot study.

According to Dave the SAFAS protocol is currently being presented to Treasury and is awaiting their approval to allow third party timber to be included in the carbon tax calculations of processing mills. The protocol has been developed in close collaboration with DFFE, so Dave is confident that this endorsement will be forthcoming.

Dave described a simple five-step process that growers can follow to achieve carbon reporting compliance.

Step 1
The grower registers on the SAFAS Value-Based Platform (VBP), provides some simple data on their tree growing operations including info about tree species, MAIs, stems per hectare, age distribution and utilisable standing timber. The Carbon reporting tool on the VBP provides estimates of the volume of leaves and branches, litter layer, root volume and harvest residues required for the stock calculations. The grower must also indicate whether they burned their residues, used fertiliser or had any wildfires so that emissions can be calculated.

Step 2
The Platform calculates the carbon stored in the plantation based on the info provided, utilising global carbon ratios (Tier 1), South Africa generic ratios (Tier 2) or compartment specific data if this is available (Tier 3). This calculation determines the carbon stock of the plantation for that year. Note that the carbon stored in harvested timber sold to the mill is not included in the total carbon stock. Carbon stocks less emissions gives you the carbon balance. The carbon balance from the current year less the carbon balance from the previous year indicates whether the plantation has sequestered carbon (carbon positive) or has maintained the stored carbon (carbon neutral) or has lost some carbon (carbon negative).

Step 3
Verification of the carbon stocks and emissions on the plantation during the protocol will be done by SAFAS. Note that DFFE may require some of the submissions to be independently verified by an accredited verifier, but this is post reporting and outside of the protocol. The protocol makes this verification process a simple procedure for the grower.

Step 4
The grower receives a report and signs off if he/she is happy with the calculation.

Step 5
The SAFAS VBP transfers the carbon data to the official carbon reporting platform, SAGERS, and the carbon reporting process is completed.

This process needs to be done annually. Most of the information required for Step 1 is the kind of info that a forestry manager would have recoded in the normal course of business, said Dave. It is required for FSC or PEFC certification purposes anyway.

This process not only enables the forest owner to comply with current carbon reporting regulations, it also serves as a useful management tool for the responsible farmer who wants to reduce GHG emissions going forward.

Once Treasury has endorsed the protocol and the carbon sequestered in third party timber can be verified and offset against mill owners’ carbon tax, the grower’s timber becomes more valuable as a feedstock.

Dave concluded his presentation with the following points:-

• Carbon reporting will become a requirement for forest certification, both FSC and PEFC.
• The forestry sector’s role in the carbon issue should be seen as an advantage.
• Forestry has a legal and socio-economic obligation to report and manage GHG emissions.
• Carbon reporting is likely to become a pre-requisite for accessing many markets, both local and international.
• The SAFAS protocol has been piloted with 20 farms supplying Sappi, Mondi and NCT, and the system works!
• The SAFAS Value Based Platform offers many other benefits to growers, including risk assessments that address sustainability issues as well as a pathway to certification.

Dave Everard … in the field.

Climate change & forestry sustainability on research radar

Sappi Research Chair launched at Wits (left to right) Dr Tracy Wessels (Sappi Ltd), Prof Mary Scholes (Wits) and Giovanni Sale (Sappi Forests).

Professor Mary Scholes is heading up a research initiative on climate change and plantation sustainability at Wits University, supported by Sappi …

Sappi Southern Africa and the University of the Witwatersrand (Wits) have established a Sappi Chair in Climate Change and Plantation Sustainability. This initiative aligns with Sappi’s drive to generate technical and operational solutions which mitigate against climate change risks and to enhance reporting on carbon emissions, climate change and sustainability.

Professor Mary Scholes, an internationally recognised authority on tree physiology and climate change and who is affiliated with the research platform in the Wits School of Animal, Plants and Environmental Sciences, will act as the Research Chair.

The work by Wits will help to enhance Sappi’s planning process and overall competitiveness.

“Because forestry is a long-term crop, the industry needs to know well in advance where to direct their resources and investment and needs the most accurate climate models to rely on,” says Prof Scholes.

She will identify critical research needs and develop research outputs related to climate change, which is one of the University’s eight research priorities. She will also lead the development of capacity to manipulate and interpret climate modelling data.

Speaking at the launch, Tracy Wessels, Sappi Group Head of Sustainability and Investor Relations, commented: “The creation of this Chair demonstrates Sappi’s commitment to building a thriving world through strong partnerships, supporting innovation and investing in future research capabilities.

“Like all other agricultural crops, the trees in the 399,996 hectares of land we own and lease are negatively impacted by climate change. While we practise climate-smart forestry and while our research teams have been hard at work developing drought resistant genotypes, the temperatures over the South African interior are projected to rise at about 1.5 to 2 times the global rate of temperature increase.

“In addition, there is increasing global pressure to account accurately for greenhouse gas emissions from forests, land and agriculture. Against this backdrop and in line with our commitment to UN SDG13: Climate Action, the need to develop climate solutions has intensified, which is why our sponsorship of the Sappi Chair in Climate Change and Plantation Sustainability makes sound business sense.”

Sappi’s initial sponsorship of the Research Chair will run until 2026.

Sappi’s association with Wits is not new: In 2020, Sappi began working on a project with other industry members and the Wits Global Change Institute on a project which involved the generation of raster climate surfaces for the entire forestry domain of South Africa, at a resolution of eight kilometres, with monthly time resolution, for the years 2020, 2030 and 2040 to 2100.

‘Our roots are in timber’

Safire CEO Pierre Bekker (left), with Gareth Smallbones, Manager: Agriculture.

Safire has evolved from specialist timber insurer to offering a diversified range of insurance products, providing protection to clients in an increasingly volatile world …

Pierre Bekker, CEO of Pietermaritzburg-based Safire Insurance, discusses the dynamics of the current insurance market, and acknowledges the solid foundation created through their timber insurance business.

“Global insurance has been very difficult for the past few years, both in terms of claims expenses from natural catastrophes and the supply side of the business,” says Pierre. “There have been dramatic and costly events such as vast fires in Chile (2023), Greece and Siberia (2021), where 18 million hectares of forests were burned, and the Australian wildfires in 2020 and 2022, where 12.6 million hectares of both natural and commercial forests were destroyed, as well as the Californian wildfires of 2020-2021. There have also been severe wind storms in Europe. In addition, flooding and earthquakes have caused widespread devastation around the world.”

Charts courtesy of Munich RE, NatCATSERVICES.

According to a United Nations Environment Programme report from 2022 entitled Spreading Like Wildfire, “climate change and land-use change are making wildfires worse”, with a warning to anticipate “a global increase of extreme fires even in areas previously unaffected”.

Violent wind storms are amongst the most damaging natural hazards in Europe, with annual loses reaching approximately € 5 billion in the EU and UK, with the highest absolute losses experienced in Germany (€ 850 million/year), France (€ 680 million/year), Italy (€ 540 million/year) and the UK (€ 530 million/year).

“Premiums collected by any insurer will never be sufficient to cover policyholders’ claims in a year of severe natural disasters, so insurers have to hold capital to meet the obligation to pay policyholders for possible claims that may or may not materialise. This capital comes at a cost and when interest rates increase this cost of capital increases,” explains Pierre. This is what Pierre refers to as the supply side of the insurance industry. Simply put, it is the amount of insurance capacity available and both the amount and cost of such capacity is inextricably linked to global financial markets.

“After COVID, there was an almost unprecedented reduction in interest rates and capital flowed into the insurance markets,” he says. “This resulted in significant increases in the insurance capacity available which further softened the insurance cycle, leading to unsustainably low premiums. Just as the term ‘zombie firm’ refers to a company that doesn’t earn enough to cover its interest costs yet continues to operate, so the market has seen a rise in so-called zombie insurance capacity during the era of easy money. This refers to insurers extending their capacity to writing business at technically unprofitable levels and for classes that they do not normally participate in.”

However, the days of easy money are over and the sudden rise in interest rates is now reversing this trend in no small measure. “The supply side constraints would on their own have a hardening effect on insurance markets, pushing rates up in conjunction with the increasing cost of capital,” says Pierre. “But combine this with the devastating natural catastrophes of the past few years, which have resulted in massive claims costs for insurers, and we have a perfect storm playing out in the global insurance markets. Predictions are now pointing to a severe hardening in the markets, the likes of which have not been seen since 1992.”

Safire came about because of the high cost of timber insurance in South Africa in the 1980s, a situation created by the cost to global insurers of devastating fires in South America and elsewhere in the world. Timber grower Bailey Bekker, Pierre’s father, conceived the concept of a timber insurance co-operative, with individual timber growers contributing to a pool of resources shared by other low-risk timber growers.

A special feature of commercial forestry is that, compared to other crops, plantations have a significantly extended growth period, depending on the tree species, geography and timber product in question. Accordingly, the related capital is bound and the trees are exposed to various risks for an extended period of time. However, despite their long risk exposure periods, only a small percentage of the world’s forests are currently insured.

“It is impossible for an individual timber grower to completely self-insure effectively”, says Pierre. “Forestry risk is considered to be low frequency and high catastrophe in nature. Because of this, the pooling effect of insurance is vital. Many timber growers that pool their premiums together pay for the very large, severe losses of the few. This is exactly why Safire was founded and continues to serve this purpose to this day.”

Although insurance markets are facing the ‘perfect storm’ on both the supply and claims expense fronts, Pierre explains that Safire offers protection against this market volatility for the following reasons:

  1. Relationship with reinsurers
    Our reinsurers have long agreed to treat our forestry pool of risk outside of the major volatility in the open markets. This has come about because of a reciprocal loyalty we have to each other that transcends hard and soft market cycles. This loyalty could only have been offered to our reinsurers on behalf of our insured members because of the loyalty of our members to supporting the pool during good and bad times.
  2. Performance of the pool
    The loss performance of our pool has consistently out-performed the market and we have shown really good results for our reinsurers over an extended period of 35 years, since Safire was started in 1987. This is in no small part due to a very selective underwriting approach where only well-managed risks are allowed access to the pool.

Pierre continues, “We are not completely immune to market forces but we have serious protection against extreme volatility, which in recent years has led to no insurance capacity for some commercial timber growers in our local market.”

Insurance is based on the number and frequency of natural disasters with actual and anticipated events being considered as per actuarial science models. ”Interestingly enough, our data shows that, locally, fires are not getting worse,” says Pierre. “Plantation fires in South Africa have not necessarily been more severe or brought about higher losses since the devastating fires of 2007 and 2008 that severely affected industrial forestry plantations.”

Weather models are now predicting South Africa to be moving from a typically wet (and unusually extended) three-year La Niña cycle into a dry El Niño period with the possibility of dry weather conditions bringing about low volatility in terms of natural disasters but potentially increasing the risk of fire.

Since its beginnings as a local timber insurer supported by the prestigious Lloyds of London, Safire has expanded to provide a diverse range of short-term insurance products. The company has seen an impressive 20% growth for the past few years, and while forestry only accounts for some 10% of the business these days, growth and diversification has enabled Safire to provide even better timber insurance services on a much more sustainable basis, in addition to its wider short-term insurance offering. But Safire’s timber clients are still close to Pierre’s heart. “It’s where our roots are, and for many years we were the only true suppliers of timber insurance to the local timber growers. It’s a partnership that we value…”

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