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Newsletter: February 2015
Sawmilling SA
Barry Collier
Sawmilling South Africa News
The South African resource

Welcome to this, our second newsletter of the 2015 year. By now, all of you will be up and running and well into the swing of things. We have not heard of any horror stories as yet this year so let’s hope it stays that way.

Here at the Sawmilling South Africa (SSA) office, we have already been on the travel with a visit to KwaZulu-Natal (KZN) to see some sawmills and a meet with our chairman, Sean Hoatson. We also travelled up to Gauteng to meet with officials of the Department of Forestry and Fisheries (DAFF) and also attended the fifth Wood Conference in Cape Town, where we made a presentation to the 700 delegates on the South African Timber Resource, with special reference to the sawmilling sector.

The ‘Wood Conference’ is an initiative HWZ International SA Pty (Ltd), a Swiss company with interests here in South Africa and is aimed at and attended by, architects, engineers, specifiers and builders as well as anyone interested in wood or timber.


This is just the audience we need to get the good message of wood and especially our locally grown and produced South African pine and Eucalyptus structural lumber across to.

As well ourselves, there were presentations by Biligom, the University of Stellenbosch and a number of international speakers. All these opportunities to promote the virtues of our locally grown and produced lumber are greatly appreciated.

News from the market at this stage is reasonably restricted but in discussion with both sawmillers and agents alike it would seem that the year is getting off to a brisk start. Both soft and hardwood millers in most parts of the country are reporting better volume movement than last year; let’s hope the trend continues. If you follow the experts like Dr Llewellyn Lewis’s BMI-BRSCU statistics, then there is real optimism for our main driver, the future of the domestic building industry.

2015 is going to be a challenging year for your association, SSA and we are going to have to take a close look at our funding if we are to survive into the future. Running an association like ours requires a great deal of travel through the country and the cost of hiring experts and funding research with no assistance from Government are making it increasingly difficult to balance the budget.

Your executive committee (EXCO) will be looking into this problem at its next sitting in March and hopefully presenting a solution at the
AGM in June.

Talking about the EXCO, at its meeting in March, it will also be looking at the longer term security of log supply in Mpumalanga and the expanded service offered to members through the website; both important issues.

News from the Forest Sector Charter Council (FSCC) is that despite the recent appointment of Simangaliso Mkhwanazi as the executive director, the three year term of the council has come to an end and will require reappointment by the Minister of Agriculture, Forestry and Fisheries (DAFF). This means that all delegates to the council will also need to be reappointed, a process that has already been started. Your EXCO will also attend to this in the coming days. At present, the sawmilling delegates to the council are Lulamile Xate and Roy Southey.

This edition of the our monthly up-date also includes interesting articles that have appeared in the local and international press over the last period and which we feel may be of interest to members.

That’s about it for this edition and we don’t want to overburden you with useless information, so until March, cheers and keep cutting straight.

Roy Southey
Executive Director: Sawmilling South Africa

National news
Fifth Wood Conference held in Cape Town


The fifth Wood Conference was held at the Cape Town International Conference Centre (CTICC) in Cape Town, South Africa, on 17 February 2015. The theme of the 2015 conference was ‘The new passion - create something with wood’ and it was attended by more than 730 people, who included architects, builders wood, investors, designers, project managers, educators and students who are interested in wood.


Bamboo group receives $8,6m cover for sustainability project in Eastern Cape


The Multilateral Investment Guarantee Agency (MIGA) is providing $8,6-million to US-based EcoPlanet Bamboo Group, covering an equity investment by the company in EcoPlanet Bamboo South Africa, to contribute to sustainable agricultural development in the Eastern Cape.

MIGA, the political risk insurance and credit enhancement arm of the World Bank Group, announced its support for the investment on Tuesday, 24 February 2015.


Fire rips through Johannesburg timber warehouse


A fire broke out at the York Timbers’ Roodekop facilities on Saturday, 24 January 2015. “Fire fighters struggled to get the raging blaze under control”, said Ekurhuleni Disaster and Emergency Management Services spokesperson, William Ntladi.

“Fire fighters have been fighting the fire from around 13h00. We have contained it however the challenge we are having is that the timber is highly flammable. We don’t know what started the fire. Workers at the factory’s warehouse contacted the local fire station. We have what we call a district turn out, with about 30 fire fighters from six fire stations,” he added.


Land ban only for farms – Zuma


The government's proposed ban on foreign land ownership will only apply to agricultural land, President Jacob Zuma said on Thursday, 19 February 2015.

Foreign nationals who plan to buy homes in South Africa will still be able to do so, as will foreign companies planning to purchase property, Zuma said in his response to the debate on his state-of-the-nation address. "The Land Holdings Bill applies to agricultural land," he told a joint sitting of Parliament. "It does not affect those foreign nationals who are planning to buy homes or residences."


York expects 425 percent rise in H1 earnings


York Timbers expects its earnings a share and headline earnings a share for the six months ended 31 December 2014 to jump by between 425 percent and 445 percent to between 21c and 21,8c

Operating profit was likely to be between 55 percent and 65 percent higher than that reported for the first six months of the prior financial year.

In contrast, net cash flow from operating activities was likely to drop by between 95 percent and 105 percent, owing mainly to the timing of purchases of imported plywood.


Packaging paper drives 10 percent FY profit gain for Mondi


While Mondi’s revenue for the year ended 31 December 2014, at €6,4-billion, remained largely unchanged year-on-year, the international paper and packaging group succeeded in lifting overall profit 10 percent to €767-million for the 12 months, leveraging strongly off acquisitions and a solid showing by the group’s packaging paper division.


Nkwinti reassures on land ownership


The Multilateral Investment Guarantee Agency (MIGA) is providing $8,6-million to US-based EcoPlanet Bamboo Group, covering an equity investment by the company in EcoPlanet Bamboo South Africa, to contribute to sustainable agricultural development in the Eastern Cape.

MIGA, the political risk insurance and credit enhancement arm of the World Bank Group, announced its support for the investment on Tuesday, 24 February 2015.

EcoPlanet had bought degraded land in an impoverished area to convert into bamboo plantations to produce activated carbon and biocharcoal for sale to local and export markets.


AlphaWealth offers timber investment


Asset manager AlphaWealth is offering its clients a direct investment in eucalyptus plantations in KwaZulu-Natal that have offtake agreements with Sappi and other timber processors.

Listed companies such as Sappi, Mondi, York Timber and Masonite have sizeable timber assets on their balance sheets but derive their sales from processing logs into products such as paper, packaging and furniture.


International news
Carbon neutrality of biomass


Paper and wood products mills use biomass residuals from their manufacturing operations to produce bioenergy that provides significant carbon reducing benefits to the environment. The American Forest and Paper Association (AF&PA) urges policymakers to clearly recognise our industry’s unique biomass use as carbon neutral. EPA’s revised framework to account for biogenic carbon is a step in the right direction but the forest products industry needs certainty that the bioenergy it produces and uses is carbon neutral.


BC softwood exports to China fall

Exports of British Canadian (BC) lumber to China have fallen for the first time in nearly a decade in 2014. According to a report from The Canadian Press, over 7,5 million cubic metres of softwood lumber valued at $1,4 billion was exported to China from BC in 2014. That represents a five per cent decrease versus 2013, when BC shipped approximately 7,9 million metres to China.


German timber industry grows by 2,9 percent in 2014


After a decline of 1,7 percent in 2013, the German timber industry grew by 2,9 percent last year. As reported by the German Association of Woodworking and Plastic Industries (HDH), sales of the 966 German companies amounted to € 33,1 billion in 2014, against 32,2 € billion in the previous year.

The number of people employed in the industry dropped slightly, falling 1,1 percent to 149 106. Sales abroad, according to HDH, developed well with a 4,5 percent increase. Domestic sales were up by 2,2 percent.

Both the wood products and wooden packaging sectors saw strong growth, expanding by 7,3 per cent and 11,4 percent respectively.


Indonesia’s timber exports to EU heading for $1 billion this year


Indonesia’s timber exports to the European Union (EU) are expected to hit US$1 billion this year, as more timber producers adopt the local timber legality verification system (SVLK) to tap growing timber demand from the EU.

Indonesian Ambassador to Belgium, Luxembourg and the EU Arif Havas Oegroseno said in Jakarta on Tuesday, 10 February 2015, that the EU’s agreement last year recognised that the SVLK wood-auditing system had contributed to a sharp increase in timber exports to EU countries.


Commodities Corner: Lumber – asset influencing the New York Times


Vladimir Petropoljac surveys the factors that affect price fluctuations in the commodity that print publications are heavily dependent on. Vladimir is the head of business development at Sensus Capital Markets and the author of “Rallied! The Alternative Guide to Becoming a Trader.” His background is in asset management where he spent many happy years.


Stock volumes of roundwood and wood chips higher by 27 percent in Sweden


The total stocks of coniferous sawlogs, pulpwood and wood chips in Sweden is estimated to amount 8,8 million m³ (cubic metres solid volume excluding bark) as of 31 December 2014. An increase by 27 percent compared with the same time frames as last year.

According to the Swedish Forest agency, Swedish stock volumes of coniferous sawlogs is estimated to amount 3,3 million m³. Compared with same time frame as last year this is a rise by 43 percent.

The total stocks of pulpwood amounted to 4,5 million m³ as of 31 December 2014, which is an increase by 22 percent compared to the same period of the year before.


Equipment update


  Electrician Saiccor Mill
  Fitter Saiccor Mill - Pulp Finishing
  Process Operator # 2 Uptake Ngodwana Mill
  Analyst: Shift Stanger Mill
  Millwright - Shifts Ngodwana Mill
  Project Managers x 4 EC / LIMP / NW / FS Read More...
  Provincial Operations Managers x 2 LIMP / NW
  Sales & Marketing KZN / EC / WC / SC / FS / NW Read More...
Upcoming events
Ligna 2015: Global innovations showcase for the forestry and wood industries


More international business. More innovations. More integration. That’s what visitors and exhibitors can expect when the international wood industry demonstrates its immense capabilities and innovative spirit at the upcoming LIGNA in Hannover, Germany. The event runs from 11 to 15 May 2015, and all the market leaders will be there to impress solution-seekers with a tremendous array of products and services.


Working with Wood: sharing the passion for wood


On 24 March 2015, Working with Wood demonstrations will be held at E Hard Build in Swakopmund from 14h00 until late.


On-line business directory

FREE listing in the Sawmill Directory for all sawmills.

Sawmill Directory – We would like to thank the following Sawmills for listing in the FREE Sawmill Directory:

1. Babanango Sawmill

2. Bracken Timbers

3. Elandskraal Houtverwerkers

4. Evergreen Timbers

5. Franklin Sawmill

6. Midlands Pine Products (Pty) Ltd

7. Sapla Timbers

8. Saw-Em Timbers

"Take advantage of listing in the Sawmill Directory and get direct quote requests for your timber products"

For FREE registration please contact Craig Schütte on +27 (0)79 5222 637 or email
Smile: it's free!

Understanding engineers

Two engineering students were biking across a university campus when one said, "Where did you get such a great bike?"

The second engineer replied, "Well, I was walking along yesterday, minding my own business, when a beautiful woman rode up on this bike, threw it to the ground, took off all her clothes and said, "Take what you want."

The first engineer nodded approvingly and said, "Good choice: The clothes probably wouldn't have fit you anyway."

Advertise in the newsletter. Contact Lee Raath Brownie. +27 (0)82 371 0190
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