Pursuing opportunities in a struggling economy – Notes from FSA’s 20th AGM

Forestry South Africa held its 20th Annual General Meeting in the KZN midlands recently, hosting a ‘live’ event attended by around 70 members and guests (numbers were limited due to COVID regulations) and many more who attended the virtual event.

Despite the fact that forestry in South Africa has been rocked by a string of disruptive events in the past few years, including the COVID pandemic and lockdown, riots and looting in KZN, freight rail and port disruptions, then floods in KZN again, the general mood at the AGM was positive and upbeat as stakeholders focused on tackling the challenges and finding solutions.

In his opening address FSA Executive Director Michael Peter said that the FSA team is working well with their Public Private Growth Initiative (PPGI) partners and making progress in addressing the major challenges confronting the forestry sector.

Likewise guest speakers Dr Azar Jammine of Econometrix and logistics consultant Ian Bird unpacked the problems we face across South Africa’s social, political and economic landscape, but pointed out the many opportunities that exist to turn it around, as well as some concrete steps being taken to do just that.

Themba Vilane, head of Mondi Forests in SA, is taking over from Busisiwe Mnguni as FSA Chairperson, while his deputy is well known KZN tree farmer Andrew Mason.

In her address, outgoing chairperson Busi Mnguni of the KZN Small Grower Group, revealed that the failed insurrection and looting spree that spread across KZN and parts of Gauteng in mid-2021 cost the Forest Sector around R656 million in physical damages and lost production. Before this unfortunate event the forestry industry was on track to record its best year since 2018 in terms of timber sales, which says a lot for the resilience of the sector.

Despite these disruptions, the industry recorded total timber sales of 13 153 million tons in 2021 – some 13% up on the volumes achieved in 2019.

Other noteworthy achievements notched up by the hard-working FSA team include:-

• Positive changes to the diesel rebate system
• Increasing FSA membership to well over 95% of timber growers in SA
• Securing access to state funding to support black participants in forestry
• Securing high court judgements in industry’s favour on Genus-exchange and the protection of water use rights.

Incoming FSA chairperson Themba Vilane revealed that the Department of Science and Innovation (DSI) has approved FSA’s third round application for Sector Innovation Funding, in the amount of R 35,2m over four years. This success is due in no small part to the efforts of FSA’s Research and Protection Director, Dr Ronald Heath, with the support of the Research Advisory Committee, as well as the efforts of FSA’s partners in the PPGI.

Coupled with the R24m secured from the DSI in the first round of SIF funding and R11m in the second round, this means that FSA has secured R 70m from DSI over the past seven years!

The funding will be utilised in line with FSA’s funding framework which focuses on forest protection and sustainability.

Dr Azar Jammine, Director and Chief Economist at Econometrix, spelled out the dire state of the South African economy, which has a projected growth rate for 2022 of 1.9% - one of the lowest in the world. 35%-46% unemployment, a growing chasm between the haves and the have nots and a deepening technological divide, has led to a huge reliance on social relief. Capital investment has dropped to 13% of GDP (from 19% in 2014), and the lack of infrastructure development has had a crippling effect on the economy, he said.

Notwithstanding the fact that we have a ‘challenging’ economy, Dr Jammine said a lot can still be achieved if government can make the right moves.

“Hopefully President Ramaphosa will get a second term in office and have more freedom to implement the necessary structural reforms to spark an economic recovery, which would take a few years to manifest,” he said.

Ian Bird, Logistics Executive of Smartvest Investment, outlined the poor levels of service on the country’s freight rail lines as well as the ports, which is of critical importance for the competitiveness of the forestry industry. Problems on the ‘Wood Owl’ line which hauls timber from Mpumalanga and northern KZN to Richards Bay, as well as the branch lines serving the forest sector, have resulted in rail usage declining steadily over the past few years, and road usage increasing.

This has had the effect of increasing the costs of logistics while negatively impacting the road infrastructure.

Meanwhile he said that Transnet’s rail network is hugely under-utilised and ripe for private sector investment.

Transnet Freight Rail has eventually come around to this way of thinking, he says, and has offered two-year slots to the private sector to supply locomotives and wagons on the main Jhb to Durban container line. However he believes that these slots are too short-term to be viable in their present form.

He says that FSA is putting together a Rail Committee that will pursue opportunities for private sector participation in the coal line that is used by the Wood Owl train that hauls timber from the central forestry regions to the Richards Bay mills. Transnet has been receptive to the initiative for 3rd party access, and the operational head of Transnet’s rail line will be part of that committee. The initiative has been well received by stakeholders and he is optimistic that solutions will be forthcoming.

He says the forest sector has 4.5 million tons of timber a year available for train freight, which constitutes 7% to 8% of Transnet’s general freight cargo, which shows that we are not an insignificant stakeholder. Current timber volumes being transported on rail are 1.9 million tons a year.

The immediate plan is for the private sector to provide locomotives to pull Transnet wagons on the Wood Owl. This would overcome the problem of unavailability of locomotives which has been at the heart of the recent freight train service disruptions on the coal line.

The longer term solution would be for private operators to supply locomotives, drivers and wagons, while leasing the rail line from Transnet.

Private sector participation in freight rail and port handling will happen, there’s no turning back, said Ian.
“An exciting new era in structural reforms beckons.”

Tribute to Dr Jaap Steenkamp

By Fanie Viljoen – CEO, Novelquip Forestry

The South African forestry industry has lost a stalwart in Dr Jacob Cornelus Steenkamp, better known as ‘Jaap’, who passed away in his hometown of George on 22 July 2021 after a two year battle with an interstitial lung disease.

Jaap was born in 1958 in Theunissen and attended Brandfort High School whereafter he enrolled for a B.Sc Forestry at the University of Stellenbosch. Jaap would later graduate with a Doctorate in Business Administration from the Nelson Mandela Metropolitan University (NMMU), and an MBA from Stellenbosch University Business School. He also acquired a diploma in Road Transport Management from the RAU and an Environmental Economics certificate of competence from Rhodes University.

As a student Jaap attended the Bonnievale high school matric dance as a blind date for Ms. Careen van der Westhuizen. Little did Jaap know that this dance would endure for the next 39 years. Jaap and Careen, or Fiena as Jaap affectionately called her, married in 1983 in Bonnievale. Their son Helgaard was born in 1987 and their daughter Joan in 1989.

After completing his military service Jaap’s career in forestry started with the Dept. of Environmental Affairs as a Junior Forester in 1981 in the Knysna area. By 1989 he had started his own contracting concern servicing SAFCOL in the Nelshoogte area.

In the same year Jaap co-founded the South African Forestry Contractors Association as an organization to represent and assist forestry contractors and forward their interests in the commercial forestry sector. Jaap was intimately involved in the leadership of SAFCA for nearly 32 years until his passing and he played an immense role in developing SAFCA from its humble beginnings with just nine founding contractors to an organisation with some 300 members, who represent around 90% of all forestry contractors currently active in South Africa and employing up to 30, 000 people. Jaap helped SAFCA live up to its vision of being an apolitical, non-racial, non-profit association established to serve and uplift forestry contractors on a fair and equal basis.

Jaap relocated to George to commence an academic career at the NMU Saasveld campus in 2003 where he would become a senior lecturer in the Forestry Programme. It is here that Jaap played an instrumental role in shaping many future foresters. He authored or co-authored a number of scientific papers and supervised or co-supervised many post-graduate students.

Dr Muedanyi Ramantswana, a friend, colleague and former student of Jaap notes that ‘Oom Jaap’ was a wealth of knowledge. “He had a passion for sharing valuable information and skills with his students, through his intriguing lectures and one on one conversations. He supervised many postgraduate students and made a lasting impact on many graduates, especially in the specialised field of Business Management. Dr Steenkamp had a vision to see the forestry industry become better, through equipping people with knowledge and creating technology. He always had the best interests of the forestry industry in his heart, and we will always remember him as a caring friend, a great lecturer, a visionary and successful entrepreneur. He had many sayings, one of his favourites was ‘the cutting edge is also the bleeding edge’ – we pay tribute to a pioneer who lived his life on the cutting edge of life. A great tree has fallen, may his legacy live on in the forestry industry,” commented Muedanyi.

Jaap was as an incredibly innovative and visionary man. During his PhD studies which researched the impact of HIV Aids on the local forestry industry, Jaap realized that in time foresters would come under increasing pressure to mechanize silviculture operations to create decent jobs and increase competitiveness. For Jaap, every problem had a solution and he would lie awake at night drawing hand sketches of potential solutions to mechanization challenges, many of which were far ahead of their time. Several national and international patents are attributed to him.

In 2007 he ventured into entrepreneurship by starting Novelquip Forestry (Pty) Ltd, formerly known as Multipit, as a vehicle to bring his silviculture mechanization ideas to life. In 2009 Jaap’s son Helgaard joined the business and together they introduced various ground-breaking innovations, including the ubiquitous Multipit MPAT pitting machine, of which more than 40 units have been implemented in the local industry. Jaap would later branch his business interests out to include Silvimech, a silviculture contractor, and Forestry and Allied Manufacturing, a manufacturing concern specializing in forestry engineering solutions. Jaap’s dream was to introduce a fully mechanized planter to the market and much of his energy and time over the past decade was dedicated to the realization of this dream. Excellent progress has been made and Helgaard and the Novelquip team will continue to work tirelessly to achieve this dream in honour of Jaap.

“Jaap’s legacy will endure in the ongoing commercialisation of his planting inventions via Novelquip and its strategic alliances,” commented Guy Harris, Chairman of Novelquip. “His innovation and determination will continue via the company he founded.”  

Jaap continued to consult widely in the industry and remained closely involved with the forestry contracting industry. He served a term on the National Forestry Advisory Council, was  a member of the Forestry Charter Council and served on the FIETA Forestry Chamber and Authority for eight years. In 2014 Jaap was recognized by the Southern African Institute of Forestry for his exceptional service to forestry in Southern Africa. Considering all Jaap’s achievements and involvement in numerous projects, it’s hard to believe that one man could have been involved in so much. But he was so passionate about what he did that he never saw it as work and he would never shy away from opportunities to contribute to the forestry cause where he could, even when there was no personal gain.

Tributes received from a number of Jaap’s forestry colleagues on news of his passing provide an indication of how highly he was regarded in the industry:-

Andrew McEwan (CMO):  “Jaap will be remembered as someone who worked tirelessly for the betterment of the South African forestry industry. There are few who have contributed so much and on so many fronts. Jaap was not prepared to accept the status quo and went out of his way to change things for the better, fight for what he believed in and develop people to be more professional. This fed into his multiple roles as teacher, lecturer, researcher, entrepreneur, innovator and leader. He has changed the forestry landscape and for this we are forever indebted.”

Dean de Costa (Senior Silviculture Specialist, Mondi SA): “Jaap was a business colleague and a friend. We knew each other for many years and he always found time in his busy schedule when he came to KZN to pop in for a visit and chat about our forest industry, modernisation developments and more importantly life in general. A lot of people don't realise the contribution that Jaap made to the modernisation of silviculture and the number of operational designs now commonly found throughout are as a direct result of his design and innovation. Jaap was a pool of knowledge and not only was he technically astute but his business savvy was always valuable. He was a man of strong Christian principles and his love for his family was always at the fore in our personal chats. Jaap was immensely proud of their achievements and the close knit bond they enjoyed. I will miss you old friend; your loss to our technological journey and to the forestry fraternity is profound. We will meet again.”  

Michal Brink (CMO): “When thinking of Jaap, I see a larger than life figure – a plus tree that remains in the forest to provide for future generations. One expects the plus tree to be there forever – not expecting it be taken down so suddenly before its time by a pandemic. Jaap, you left us too early and still had so much to contribute through your entrepreneurial spirit and never-give-up attitude. Thank you for what you meant to so many of us – we salute you and may you rest peacefully my dear friend.”

Jaap was a deeply religious man who was unwavering in his faith and his devotion to his heavenly Father. He led his local church congregation with weekly services and touched the lives of his fellow church members in unimaginable ways. He was  spiritual mentor and father figure to many.

Away from the forest and lecture hall, Jaap was a passionate hunter and conservationist who enjoyed spending time in the bush with his family. Jaap’s friends will remember him as a kind and compassionate man who always stood up for what he believed in.  

Dwayne Marx, a close friend and mentee, noted that Jaap was a forest modernization pioneer who touched thousands of lives, and who will always be remembered as a Forestry Legend.

Anyone that knew Jaap would attest to his love of and dedication to his family. Nothing was as important to him than his faith and family. He is survived by his wife Careen, son Helgaard, daughter Joan, daughter-in-law Nadia and three grandchildren.

In his lifetime Jaap’s contribution to forestry and its people was far reaching and his loss will without a doubt be felt by many. But his legacy in the forestry industry will endure to be felt by many more.

A memorial is to be held for Jaap on Friday 30 July at 11:00 will be live streamed and those interested in attending virtually can make contact with Fanie Viljoen by email at gm@nqfsa.com.

STIHL pledges support for subsidiary in South Africa

Safety of staff is the company’s top priority as STIHL pledges to rebuild buildings damaged by looters during the recent unrest in South Africa, retain staff and support dealers ...

“For us as a family-owned company, the protection and safety of our employees is our top priority” says Dr Nikolas Stihl, Chairman of the STIHL Advisory Board and Supervisory Board. “We are shocked and appalled by the images coming out of South Africa. Parts of the country have been affected by severe rioting, violence and looting. The region in and around Durban has also been affected – as has our South African subsidiary ANDREAS STIHL Ltd. in Pietermaritzburg. We are pleased that all of the employees and their families are unharmed.”

The STIHL SA warehouse in Pietermaritzburg has been completely destroyed and its office building severely damaged as a result of the unrest and looting. STIHL headquarters in Germany has set up a crisis team to organise measures for the protection and well-being of the subsidiary’s roughly 40 employees in cooperation with Hayden Hutton, the Managing Director of STIHL South Africa.

Commitment to South Africa reaffirmed: STIHL guarantees jobs and supports dealers
“Our subsidiary in South Africa will continue to exist going forward. No employees will lose their jobs due to this unusual situation. On the contrary, we will rebuild STIHL South Africa. To do so, we need the expertise and dedication of our staff. We will make sure that our customers can continue to buy and use STIHL products in the future,” said Dr Stihl.

The STIHL subsidiary in South Africa supplies local dealers with products. The company has also pledged to help dealers. Right now, it is working on ways to supply dealers with its products in the short to medium term. Containers are being shipped to the country, with plans in place to also send equipment to South Africa by air.

The STIHL Group develops, manufactures, and distributes outdoor power equipment for forestry, agriculture, landscaping and construction sectors.

Beast of a mulcher made in RSA

A call from sunny Pretoria – the land of the Blue Bulls and Mamelodi Sundowns – sent the SA Forestry team on a mission to Bulwer on the road to the Drakensberg mountains in KZN to find a big, South African-manufactured drum mulcher dubbed the ‘Beast’.

We found it! One couldn’t miss it, actually! It was parked next to the road, an impressive hulk of a machine dressed in yellow and grey livery that looks capable of reducing bush, post-harvest slash and big tree stumps to a mulch with relative ease.

The Wuhlf 960 wheeled mulcher is a 276kW machine manufactured by Wuhlf Equipment in Pretoria. According to the Wuhlf team it compares favourably with any of the imported mulchers in terms of durability, reliability and productivity, with one significant advantage. It is designed and manufactured in SA specifically to suit conditions in Africa, so the spares, maintenance and technical skills required to keep this machine working productively are available on our doorstep.

At roughly half the cost of equivalent mulchers manufactured overseas, the Wuhlf 960 is a new addition to the Wuhlf stable of mulchers which include the smaller 920 (85kW) and 930 (129kW) drum mulchers – all wheeled machines.

The Wuhlf team was in KZN to do a demo of the 960 for Alastair Fagg of Grand Bridge Trading, one of the leading South African contractors with a lot of experience in mulching in forestry applications.

The demo site was a local farm where the farmer is clearing old wattle land for pasture. The Wuhlf 960 proceeded to reduce the above ground vegetation and old wattle stumps to a decent mulch with ease, under the watchful eyes of the farmer and the Grand Bridge team.

Alastair said that he was interested in the Wuhlf mulcher to add to his stable of mulchers which include large, purpose-built tracked mulchers. He is a big believer in the benefits of mulching post-harvest residues in forestry compared to the traditional practice of burning slash, as well as in other land care applications such as land conversion and bush clearing.

Grand Bridge Trading started doing trials of complete field mulching in South Africa at Sappi Zululand some eight years back with a five year contract to mulch 1 800 hectares a year.

This pioneering work enabled Sappi South Africa to determine the true benefits of mulching versus traditional burning, and the results exceeded expectations, said Alastair. 

Since then Grand Bridge has stayed within the Sappi stable, believing in the advantages of mulching. While Sappi is busy expanding its mulching operations, a growing number of corporate and private growers and farmers around South Africa are also turning to mulching to reap the benefits. These include improved soil care (moisture and nutrient retention), improved compartment access, reduced fire risk and the opportunity to re-plant immediately after the mulcher has reduced the post-harvest residue to an even mulch cover.

Wuhlf Equipment
Wuhlf Equipment was established in 2004 by brothers Johan and Carl Grobler, supplying and supporting front end loaders, 4x4 forklifts and a range of attachments. In 2013 they started designing and manufacturing mulchers to be used in Africa mainly for bush clearing. There are a large number of Wuhlf mulchers out there doing exactly that.

They recently added the Wuhlf 960 to their product line with the aim of putting it to work in the forestry environment which requires more power and durability.

The complete mulcher head plus the canopy and the hydraulics are manufactured in Wuhlf’s Pretoria factory. The chassis, wheels, gearbox, diff and hydraulic pumps are sourced from leading international suppliers. The mulchers are assembled at the factory in Pretoria.

Johan Grobler says that the 960 does not come with complicated, high-tech computer systems. He says any competent hydraulic and diesel mechanic can maintain and repair the machines if necessary, thus improving machine availability. They’re simple, tough and well suited to conditions across Africa, he says.

The mulchers come with a 12 month or 1 000 hours warranty, with more extended warranty options available.

Wuhlf Equipment’s timing in entering the mulching market couldn’t be better. Mulching is really taking off in this part of the world as land owners and managers realise the long term benefits of the operation.

“Mulching will have a massive impact in southern Africa in bush clearing and improving land care practices,” said Johan. “There are 19 million hectares of bush encroachment in Namibia alone.”

He said that there are around 40 Wuhlf mulchers working across southern Africa, mainly doing bush clearing, but this was their first foray into the forestry sector. The team understood that forestry needed more grunt, hence the introduction of the 276 kW Wuhlf 960 Drum Mulcher.

Visit wuhlf.co.za for more info and see the Wuhlf 960 in action on our YouTube channel...

16.1% minimum wage increase for forestry workers

The National Minimum Wage for farm workers – including forestry workers – has been set at R 21.69 per hour, an increase of 16.1% over the 2020 minimum wage of R18.69 per hour.

The new minimum wage takes effect from 1st March 2021.

In the past the Minimum Wage for farm workers was set slightly below the National Minimum Wage, taking into consideration factors impacting on the rural economy in South Africa. However this special dispensation for farm workers no longer applies, with the farm worker Minimum Wage reaching parity with the National Minimum Wage from 1st March 2021. Hence the big jump of 16.1%, which is way ahead of inflation, currently around 3%.

A wage of R21.69 per hour translates into R 173.52 per 8-hour day, or R 3 470.40 for a 20-day working month – before deductions.

According to Employment and Labour Minister Thulas Nxesi, the National Minimum Wage Act makes provision for employers that are genuinely unable to pay the National Minimum Wage to apply for official exemption.

While this wage increase will be good news for forestry workers, it is likely to be a challenge for many employers involved in the forest sector – particularly those reliant on manual operations – as their wage bill faces a hefty increase from March 1st.

Poor timing
According to Francois Oberholzer, Operations Manager for Forestry South Africa (FSA) which represents the majority of growers in South Africa, the timing of this wage increase is particularly unfortunate.

“The State has a history of poor timing and implementing major changes when conditions could not be worse,” commented Francois. “The implementation of the minimum wage should have been timed during periods of high growth and low unemployment. This increase comes when the country is experiencing record high unemployment and when businesses are the least profitable they have ever been.

“FSA did make a submission to the Minimum Wage Commission’s proposed increase. Like other industry associations in the agriculture sector, our recommendations were unfortunately not successful. As an industry we support the objectives of the Act regarding the need to eradicate poverty and inequality, but we would have preferred to see a phased approach to the equalization of the minimum wage.

“The 16% increase in minimum wage will without a doubt place a lot of pressure on the forestry sector. This is exacerbated by low international prices for dissolving pulp since 2019 as well as a poor production year in 2020 due to the pandemic that saw a 15% decrease in volumes produced year on year.”

According to FSA, this minimum wage could result in further job losses and increasing mechanisation in the forestry sector.

“It is a bit early to estimate any levels of job losses,” said Francois. “The forestry sector in many instances pays wages above the minimum wage. This is unfortunately not the norm and FSA will soon conduct a survey to quantify the impact of the significant increase in minimum wage which will provide some insight on possible job losses.”

Small-scale growers
Does this increase put wages out of the reach of most small-scale / community forestry operations … meaning they will likely be unable to comply, which has other consequences, e.g. they can’t get certified if they don’t comply with the minimum wage?

“The small and medium growers will undoubtedly be most severely affected,” continued Francois. “We do hope that all growers that will not be able to implement the new minimum wage apply for the exemption offered by the State.

Unfortunately, the exemption is only a one-year deferment and most small-scale growers will find it difficult to comply to the new minimum wage the following year. More information on this exemption is available on our website www.forestrysouthafrica.co.za.”

Not enough
Jerry Nkosi of the Chemical, Energy, Paper, Printing, Wood & Allied Workers’ Union (CEPPWAWU), which represents some 3 000 forestry workers, welcomed the increase in the minimum wage, but said it wasn’t enough to address the inequalities in the South African labour market.

“CEPPWAWU welcomes the announcement by Government that the NMW for the forestry and farm workers will increase from 1 March 2021,” commented Jerry.  “However, given the inequality and the big gap between the income of forestry and farm workers compared to other sectors, the increase is not much significant. An increase is an increase but it is the value that counts. Is this a valuable increase? Yes. Does it address the gaps and inequalities? No.

“It is in this vein that CEPPWAWU is advocating for the amendment of the Constitution for the Wood and Paper Bargaining Council to include forestry. This will allow forestry workers to be covered by the Council and allow the Union to negotiate for them centrally.”

The forest sector currently employs around 59 000 people directly across South Africa. Latest figures show that nationally unemployment is edging above the 40% mark, with the majority of jobless people residing in rural areas.

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