New generation contractor makes his mark

*Sabelo Sithole of New Age Forest Solutions.*

At just 30-years-old, Sabelo Sithole is at the forefront of a new generation of forestry contractors servicing Mondi South Africa. Sabelo is the Managing Director of New Age Forest Solutions, a new harvesting business launched in 2021, which has secured a five-year harvesting contract for the Zululand area.

Sabelo’s journey in forestry has been deeply connected to Mondi from the start. During high school, he attended Protec, an extra-curricular maths and science programme that gives academic support to under-resourced rural schools. This programme has long been supported by Mondi, and Sabelo rose to the fore as one of his school’s top academic achievers. He was identified as a candidate for the Mondi Bursary Programme and made a successful application in 2012.

“To be honest I didn’t know anything about forestry,” admits Sabelo with a shy smile as he walks through a shady plantation in Zululand. Sabelo stops at the harvesting operation to check in on one of his Hitachi machines, which is cutting through a Eucalyptus compartment with great speed and precision. Here he continues his story…

“The first thing you do after receiving the bursary is go to a Mondi operation for work experience. This lasts a whole year and it’s really tough!” he remembers. “You do everything from general labour to planting, establishment, tending and harvesting … that’s where I started to know about forestry, to experience every different kind of work.”

From there, Sabelo went to study forestry at Nelson Mandela University’s George campus, where he completed a three-year National Diploma in Forestry. After graduating, he joined SiyaQhubeka Forests, and worked as both a harvesting and silviculture forester. It was harvesting that stole his heart.

“I decided to leave SQF and join a harvesting contractor so that I could specialise,” explains Sabelo. “The machines really fascinated me. I spent four and a half years at the harvesting contractor. Then I started my own business.”

*Excavator equipped with a Ponsse head busy harvesting for Mondi in Zululand.*

Sabelo was always looking for opportunities to grow, and he kept an eye on the regular contracting opportunities being advertised by Mondi and SQF. He began working on a business plan and registered his company New Age Forest Solutions in 2021.

“Working with a contractor helped me understand the business side of forestry. I started my business as the only employee – I was doing everything myself. When I won the Mondi harvesting contract last year, I had to hit the ground running!”

Sabelo takes a look at a stack of freshly cut timber. He is happy with the neatly stripped and stacked logs. The soft-spoken young forester is brand new to business, but he has 10 years of operational experience, which puts him in a good position to guide the company.

“From the moment I made the successful bid on the contract, Mondi Zimele has assisted me every step of the way,” he goes on. “They believed in me and my vision for the business.”

Mondi Zimele, which is Mondi’s enterprise development unit, provided 60% of the start-up funding in the form of a soft loan and helped Sabelo consolidate his business plan so he could apply for further funding.

It took a few months to put a team together and acquire the assets needed to start the work.

In order to meet the contract of 140 000 tonnes per annum, Sabelo needed two harvesters, a forwarder and a loader. He went for Hitachi excavators fitted with Ponsse H7 harvesting heads, a forwarder with a Matriarch grapple and a Bell loader. Once his forestry equipment was in place and his team was mobilized, he commenced work in May last year. It was a dream come true.

*The Bell loader, workhorse of the harvesting operation.*

The Mondi perspective
Cindy Mji is the Mondi Zimele Business Development Manager responsible for the Zululand area. She has been engaging with Sabelo from the time he won the contract.

“Supporting Mondi contractors has many benefits,” she explains as she sits on the back of a bakkie with Sabelo, while the harvester hums in the distance. “Developing new contractors is important for job creation and economic development, which helps to build healthy communities in the forestry footprint. But it is also crucial that we empower up-and-coming contractors to ensure the sustainability of the supply chain for Mondi,” she explains.

“This is part of Mondi’s broader strategy to develop new contractors in the forestry space. The strategy prioritizes transformation and succession planning. Being a young black forester, Sabelo was the perfect candidate, and he has a bright future in the business,” she concludes.

Sabelo adds that the business development support encourages continuous improvement, growth and development. Cindy has helped him set out short, medium and long term goals that go beyond the scope of the Mondi contract.

“MZ helps you to be a visionary,” Sabelo says with a smile.

“Although we are just beginning our journey, I am very excited and proud of our achievements. We have 20 employees, and four machines running 24/7. That’s 20 families that are benefitting from this work. We are looking to add more employees and grow the business even further.”

Story and photos by Samora Chapman

FSA plays key role in national crisis control

*Outgoing FSA Executive Committee chairperson Themba Vilane applauded the resilience of the forest sector despite another challenging year. (Photo: Samora Chapman)*

Forestry South Africa held its 21st AGM in the KZN midlands in May, attended by a record number of members and invited guests who were treated to two blockbuster keynote presentations that helped to put the crises facing South Africa into perspective …

What a year 2022 turned out to be for the South African forestry sector! After surviving the Covid pandemic in 2020 and the failed insurrection and looting spree that took place in KZN and Gauteng in 2021, forestry stakeholders were hoping for a more stable and prosperous 2022. But the crises just shifted … to energy (or the lack of it) with load shedding ramping ever upwards; and to logistics where a strike by Transnet workers brought freight rail – that was already in a state of decline – to a standstill in October, costing the battered SA economy R1 billion per day in lost opportunities.

Meanwhile the impacts of Russia’s invasion of Ukraine disrupted international markets, creating logistics bottlenecks and causing prices of commodities like fuel, coal, tyres and fertilizer to skyrocket.

In between all of that, the resilient forest sector survived – even thrived in many instances – aided and abetted by the Forestry South Africa team which muscled its way closer to the levers of power to help find solutions for a number of pressing national issues.

Here is a brief highlights package of FSA activities during the year 2022 that were covered by outgoing FSA chairperson Themba Vilane during his address at the recent FSA AGM, and were elaborated upon in his Foreword in the recently published FSA Annual Report.

*Happy to be back in the real world … members and guests turned out in their numbers to attend the FSA AGM at Fern Hill Conference Centre in Tweedie, KZN. (Photo: Samora Chapman)*

Ports and rail

The FSA team established regular meetings with the CEO of Transnet and her top management team, and task teams working on ports and rail met throughout the year, playing a hand in bringing the Transnet strike to an end. As a result of this involvement, Executive Director Michael Peter was asked to serve in a President-led task team working on the reforms needed to address the use and recapitalisation of rail and ports in South Africa.

FSA is also serving on a Presidency-led energy committee which is playing a key role in addressing the energy crisis.

“Having our association at the forefront of these national crises interventions is a great testimony to the regard in which our sector is held,” said Themba.

Research and innovation

Forestry’s growing partnerships with government also bore fruit with FSA securing Sector Innovation Funding of R35.2 million from the Department of Science and Innovation. This funding serves to increase forestry’s research capacity in crucial areas.

Furthermore, the signing of an MoU between FSA and the Department of Forestry, Fisheries and the Environment (DFFE) will bring an additional R9 million per year for forest protection.

Recommissioning of state plantations

Perhaps the biggest news of the year came just before Christmas when the DFFE called for expressions of interest from the private sector for the operation of 22 000 ha of state-owned forestry plantations in the Western Cape. These former pine plantations have been lying dormant for anything between five to 20 years, as they were handed over to the receiving agents after clear-felling at rotation end by the previous lease holder, MTO Forestry. They were originally part of government’s forestry exit strategy in the Western Cape, but following an outcry from industry stakeholders and further research, Cabinet decided in 2008 to recommission these plantations.

After years of lobbying by FSA and other stakeholders, the process of bringing them back into forestry has begun at last. This is good news indeed and will revitalise forestry and sawmilling in the Western Cape (see story on SAF Online - https://saforestryonline.co.za/articles/w-cape-state-plantation).

“We hope that this signals the start of the process for the rest of the Category B and C state plantations which have been overrun by timber thieves and criminal syndicates …” said Themba.

Incoming FSA Executive Committee chairperson Andrew Mason (medium growers group) and vice-chairperson Buhle Msweli (small-scale growers group). The Executive Committee chair and vice-chair rotate between the Large, Medium and Small Growers Groups every year. (Photo: Samora Chapman)

Land reform

On the land reform front, the FSA Land Committee has come up with concrete proposals to bolster support for communities who have come into forestry through land reform initiatives, in an effort to ensure that a sustainable fibre supply from these plantations is maintained. These include a feasibility study stage in the land restitution process to better inform settlement negotiations; a suite of appropriate settlement models; a crop ownership transfer model and the provision of appropriate post-settlement support for land reform beneficiaries.

Timber volumes up

Finally, Themba applauded the fact that timber sales recorded by FSA members during 2022 were the highest since 2018 at 13.970 million tons (6.2% higher than 2021 volumes). Gum sales were the best performer at 7 million tons (18.5% higher than 2021 volumes), wattle was second best at 1.4 million tons (up 15.5% on 2021 volumes) and pine at 5.5 million tons (down by 7.8% vs 2021 volumes).

These timber sales volumes would have been much higher had it not been for the devastating floods that occurred in KZN in April and the impacts of the rail and port strike in October, the consequences of which are still being felt across all sectors of the economy.

“Should the country succeed in addressing the two biggest challenges we are facing in logistics and energy, this bodes very well for the future of timber growers, especially with the major investments which have been made by our sector in pulp and paper, particle board, sawmilling and renewable energy,” said Themba.

*Celebrating women … women are playing an increasingly active role in the previously male-dominated forestry sector in South Africa. (Photo: Samora Chapman)*

Service acknowledgements

The FSA team paid tribute to two stalwarts of the Forestry Sector, Brian Aitken and Murray Mason, both of whom have put in multiple stints as FSA office bearers over the years, and who have contributed enormously to the success of the sector.

FSA Executive Committee for 2023/24

Ex Large Growers Group

Duane Roothman (SAPPI)
Themba Vilane (Mondi)
Sean Brown (Merensky)
Itumeleng Langeni (MTO)
Tsepo Monaheng (SAFCOL)
Ferdie Brauckmann (TWK)
Penwell Lunga (PG Bison)
Gerald Stoltz (York Timbers)
Mark Armour (co-opted)

Ex Medium Growers Group
Andrew Mason - KZN (MGG Chair) (FSA Chairperson)
Murray Mason - KZN / S Cape
Heiner Hinze - Mpumalanga / Limpopo
Graeme Freese - Past MGG Chairman
Danny Knoesen - NCT

Ex Small Growers Group
Buhle Msweli KZN Provincial Chairperson (FSA Vice-Chairperson)
Musa Mcwensa KZN Deputy Chairperson
Fhatuwani Netsianda Limpopo Provincial Chairperson

Joyce Shozi (chairperson King Cetshwayo District small-scale growers), Sanele Zuma (Siyaqhubeka Forests), and Nelly Ndlovu (CEO Mondi Zimele and chairperson of the Forest Sector Charter Council. (Photo: Samora Chapman)

*Linda Vilakazi (Siyaqhubeka Forests), Maurice Makhatini (Mondi) and Siya Kobese (Sappi). (Photo: Samora Chapman)*

Left to right: Mbali Luthuli, (Assistant Director, Planning, KZN DFFE), Wongeka Kutshwa (Deputy Director, Forestry Development, KZN DFFE), Pumeza Nodada (Deputy Director-General, Forestry Management, DFFE) and Noluthando Kobese (Chief Forester, Forestry Regulation, KZN DFFE). (Photo: Samora Chapman)

Energy … the new GOLD

*Keynote speaker JP Landman finds a silver lining in the energy crisis. (Photo: Samora Chapman)*

Keynote speakers at FSA’s AGM slice and dice the energy crisis and uncover the opportunities that await private sector entrepreneurs …

There is a massive shift taking place in South Africa’s energy sector, from the current public sector energy monopoly to private sector participation, that will end load shedding roughly 18 months from now.

This startling revelation from highly respected political and trend analyst JP Landman caught delegates at the Forestry South Africa AGM unawares. We are so used to hearing about the energy crisis, we suffer the consequences of it at home and at work every day, and we expected more bad news from the keynote speaker to follow the already bad news that has cast a veil of gloom over our lives since forever.

But JP wasn’t joking, although his talk was full of light-hearted banter and sharp-witted humour that sliced through the brain fog enveloping our lives like a hot knife through butter.

South Africa currently has a power ‘baseload’ gap of 6 000 MW, explained JP. Baseload is the dependable power that is always available, and is crucial to meet the fluctuating energy demands of our nation.

There are currently 18 private sector-driven renewable energy projects that are already on the ground in South Africa, explained JP. These projects have the capacity to deliver 18 000 MW which will end load shedding by end of 2024, or by mid 2025 latest. Just 5 000 MW of renewable energy will cut load shedding by 61%, and we could achieve that milestone by the end of this year.

This will be achieved with no additional power contribution from existing state-owned power stations.

“Eskom is a government-owned monopoly that is collapsing in on itself,” said JP. This has led to the current energy crisis which has opened the door for private sector participation in power generation.

“If things were working well, the private sector would never get a look-in,” he said.

He described this as a “massive shift” that will bring South Africa into line with the rest of the world.

“Most countries in the world have moved away from government energy monopolies, because they don’t work,” said JP.

Half of Eskom’s generation capacity will close down over the next decade, he predicted. Eskom will expand the national grid, but there will also be mini-grids and micro-grids established at local and neighbourhood level that will distribute privately generated renewable power to a few households, or a small village, or a cluster of businesses. The technology that makes this possible is already available.

“By 2034 our energy system will be very different from what it is now, and we will have forgotten about load shedding,” said JP.

*JP Landman captivates the audience with his sharp tongue and expert analysis, shedding light on the future prospects of our country. (Photo: Samora Chapman)*

Medupi and Kusile will continue to eat coal for another 40 years, and gas and nuclear will be added to the energy mix. Gas is much cleaner than coal and you can switch it on and off as and when you need it, so it plays an important support role in a country’s energy mix.

From a business perspective, this energy transition to renewables is critical.

“We need to cut our emissions by 17% - we have to go green otherwise we will be barred from exporting our products to important overseas markets. Eskom and Sasol are the worst offenders.

He predicted that the big shift will see the rise of energy traders who will be sourcing clean energy and selling it on to customers.

“In a few years you will be liaising with an energy trader – not Eskom,” said JP. “This is already the case overseas.”

Municipalities will be in crisis, as they won’t be making money out of on-selling electricity. But here too, out of crisis comes the possibility of change, and they will have to jack up their services in order to survive.

R1.5 trillion will have to be invested in this new economic sector, and this presents a “HUGE” opportunity.

“Energy is the new gold,” he said.

Turning to the political front, he was equally forthright. Progress is restoring the dignity of every citizen in their everyday lives. This, he said, can only be achieved by a grand government coalition that has the support of 75% of the people.

“Nobody can do it on their own. We need shared values, we need inclusivity …”

Don’t delegitimise South Africa’s democracy, he pleaded, we just need a more or less helpful attitude towards one another and to unleash the power of science and technology to restore dignity to people.

“Be grateful for the fact that we live in peace.”

Blackout blues

Following that blockbuster presentation was always going to be a tough ask, but energy analyst and consultant Chris Yelland got right down to work with a snapshot of South Africa’s energy availability factor which is on a downward trend. This will have to bottom out before it gets better - and the bottom hasn’t been reached yet.

*Chris Yelland dissects the risks of a total national electricity blackout. (Photo: Samora Chapman)*

But like JP Landman’s presentation, Chris also offered a silver lining, as he urged the forestry sector to “take ownership of your own energy future”.

Basically, the private sector must get involved in energy generation, and the forestry sector is in the right space to achieve significant energy independence.

“If you are waiting for government to do it you will wait a long time. What is the forestry sector bringing to the table in terms of energy generation capacity?”

But he also shed some light on the dark side of the energy equation - a total national blackout – and offered some slightly comforting news to balance this very uncomfortable prospect.

Chris explained that a ‘blackout’ is caused by a major disturbance on the national grid, and it can happen in one second. It is not a gradual thing. For example if the line to the Western Cape trips and a power unit at Koeberg goes down simultaneously … unlikely but it is possible.

He said the level of load shedding currently being experienced is not an indicator of the likelihood of a total blackout. However it has had a galvanising effect and we are now much better prepared for this eventuality than we were when load shedding began a few years ago.

“Even though the probability of a national blackout is very low, the consequences are so severe that even the insurance companies won’t cover them.”

A blackout could last for a few days, or a week, or even four weeks. The consequences of an extended blackout are not pretty:-

• No power, no lights, no refrigeration
• No cash, no banks, ATMs or card machines
• No food, shops close
• Petrol stations close, no petrol, no diesel
• Mobile phones and telecom towers go flat
• Standby generators run out of diesel
• Transportation grinds to a halt
• No water in the taps
• Social unrest and looting spreads
• Infrastructure theft and vandalism
• Anarchy.

He presented three national blackout scenarios, which will determine the severity of the consequences that follow:-

Scenario 1 – OPTIMISTIC – First up in 2 hours; last up in 1 week.
Islanding of key power stations works perfectly
No failures in restoration, which works perfectly
Impact of civil unrest and looting not a factor.

Scanario 2 – REALISTIC – First up in 2 hours, last up in 2 weeks.
Some failures in islanding and restoration
Hampered by some unrest and looting but no electrical infrastructure damaged.

Scenario 3 – PESSIMISTIC – extended blackout lasts up to 4 weeks.
Blackout takes place at same time as Eskom labour and/or civil unrest
Significant islanding failures and major logistical reconnection issues
Line, cable, switchgear, transformer and electrical infrastructure theft and vandalism.

Applause for the keynote speakers, acknowledging the knife-edge between crisis and opportunity. *(Photo: Samora Chapman)*

While businesses (and private households) should have some contingency plans in place to mitigate the consequences of a blackout, the focus of our efforts should rather be on taking control of our own energy requirements.

“The agricultural sector (including forestry) has a key role to play and should announce measurable, new self-generation targets … You are the solution, you need to take responsibility for your own energy requirements,” he concluded.

Wood is King

Chris Chapman urges packaging manufacturers and consumers to kick oil-based plastic and welcome in a new world of beautiful, sustainable, versatile wood!!

Despite ongoing COVID-19 aftershocks, political brinkmanship within the corridors of power, rising poverty and crime and deteriorating service delivery at all levels of government, it’s still a damn good time to be in the forestry sector in South Africa. Or anywhere on the planet, for that matter.

In fact it may just be one of the best business arenas to be engaged in. The rising prices for sawn lumber and board across the globe are the latest indicator that the value of wood is on a long term upward trajectory.

US sawn timber prices are peaking close to the US$ 1 000 per cubic meter, and sawn lumber prices in Australia and New Zealand are soaring on the back of massive demand from China and the booming domestic construction markets. Here in South Africa the lumber market is strong and local sawmillers are enjoying a robust year – for a change.

The lumber supply in the Western Cape is holding its own but a shortage of roundlogs is looming following the massive fires in 2017 and 2018 plus the impact of government’s forestry exit strategy that has been implemented in the region.

The failure to re-capitalise the Category B and C plantations is another blot on the forest sector in South Africa, allowing precious resources to dwindle.

However the ever-increasing number of different products being produced from wood these days, plus the increasing realisation of the benefits of building in wood are all good omens for the future.

Wood plastic
Then this piece of news popped up. A US-based research team led by Prof Yuan Yao of the Yale School of the Environment and Liangbing Hu from the University of Maryland have developed a viable process for producing high quality bioplastic from wood.

This could be a game-changer as it could replace one of the world’s worst polluters – plastic.

Once regarded as a miracle invention, plastic has become the pariah of modern industrial economies. It does not biodegrade in a hurry and will continue to choke rivers, the ocean, landfills and our guts for centuries to come.

Reminds me of that classic line in The Graduate, featuring the brilliant Dustin Hoffman as a young man growing up in middle class America. At his university graduation party, a well-healed gent pulls the Dustin Hoffman character aside to offer him some sage advice about his future career choices: “I just want to say one thing to you son,” the rich gent says in typical 70s ignorance and stupidity.

“What’s that,” says Dustin, deadpan.

“Plastic!”

Remember, this was also the decade in which cigarettes were fashionable and we believed that smoking was good for you. The clever dick at the graduation party should have said another word: “Wood”!

If this technology of using wood as raw material to make plastic-like products can be perfected, there will be no excuse for packaging companies to continue to manufacture oil-based plastic. And if consumers can apply real pressure by shunning traditional plastic, we may yet have a shot at cleaning up the planet.

Either way you look at it the demand for wood is going only one way and that’s up, and we will all be better off for it.

The news that a Finnish project dubbed WISA WOODSAT is preparing to send a satellite with a plywood outer shell into space is yet another sign that Wood is King.

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.