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Newsletter: April 2015
Sawmilling SA
Sawmilling South Africa News
Steady demand for structural lumber

Well, that’s Easter done and dusted and we are still on course for a better year in this sector of the forest industry than the last few. Now only one or two more public holidays left and then we can settle down into some real work.

We make it sound as though sawmillers have been standing lazily by but despite all the holidays, work has in fact been going on a cracking pace.

If we take a good long look at our industry and identify some of the more long term strategic challenges facing us, then one of the greater problems must be the lack of interest and support of new investors into the sector. We have not seen the entrance of any significant new players to the sawmilling arena in the last four or five years. This is a sure sign that investors do not see any advantage or potential in the sector and is a sign that all is not well with us.

There are, of course, a number of reasons for this and theories as to why this is, not least of all the current uncertainty with the supply of sawlog resource.


Here we are faced with many of the larger timber growers openly declaring that they are busy with a strategy to replace softwood (Pine) with hardwood (Eucalyptus). Then there is much uncertainty and speculation around the future strategy of the largest grower of sawlogs, KLF.

Add to this the Government’s slow response to repeated and continuous calls for the expansion of the ‘National’ forest resource, especially sawlogs. Not to mention the Eskom crisis, a crumbling rural road and rail infrastructure and escalating demands from labour and you start to understand why nobody is actually attracted to our industry.

If we are to take advantage of the worldwide resurgence in support for forest expansion and desire to use more ‘wood’ in construction and everyday life, then we need to address the above and all the other issues that seem to be slowing us down.

We know that, together with FSA and all other associations in our sector, that we are meeting with and pushing the agenda with our colleagues in Government but do we need to be talking to the banks and the decision makers in the private sector?

This all sounds like doom and gloom but there are also many success stories and some hard working and innovative people out there in the industry.

Just one example of this is the launch of the ‘Biligom’ initiative and the dogged determination by some family and independently owned enterprises to get ahead and stay out there. However, the fact remains that unless we address these longer term strategic issues and start to see growth in the sector, we are not going to attract youth, investment and innovation that we are so badly in need of if we are to secure a future for SA Sawmilling.

News from the market place this month is that all regions are reporting a steady demand for structural lumber and that the larger centres are also seeing an uptick in the demand for industrial grades.

Please keep the date of 18 June open in your diaries as that’s the date of our AGM and an important one it will be, so we need as many of you there as possible. Also, keep a look out for all correspondence from us here at SSA as we will be announcing visits to all the regions in the next couple of months.

In the meantime keep cutting straight and drying flat.

Roy Southey
Executive Director: Sawmilling South Africa

National news
Automation improves wood treatment processes


In their quest for accuracy, chemicals specialists from wood preservative chemicals company, Dolphin Bay Chemicals, have taken an innovative approach to determining the correct solution strength of Permacure CCA, is a wood preservative, which involves using existing technology and adapting it to its specific needs.


Manufacturing output contracts by lower-than-expected 0.5% y/y in February


Manufacturing production decreased by 0.5% year-on-year in February, mainly owing to a 2% contraction in petroleum, chemical products, rubber and plastic products output; an 8.9% contraction in the furniture and other manufacturing segment and a 2% contraction in wood and wood products, paper, publishing and printing output.

“The second consecutive month of [year-on-year contractions] in manufacturing production continues to reflect the pressures on the supply side of the economy, which continues to grapple with electricity supply disruptions, weak demand and poor productivity.


Mpact concludes new BEE deal


Paper and packaging group Mpact has concluded a broad-based black-economic empowerment (BBBEE) deal that will see a purpose-formed trust subscribing for 10% of the ordinary issued shares in group subsidiary Mpact Operations, which holds its South African businesses.

The company last month resolved to pursue a BBBEE ownership transaction by establishing the Mpact Foundation Trust, which would, through its wholly-owned subsidiary Mpact Foundation, act as the BBBEE partner to the group following the exit of its previous BBBEE partner Shanduka Packaging in 2012.


International news
Softwood lumber price in US still at low level


Frustration and angst grew among US traders of framing lumber, as the market remained in the doldrums. Oversupply was cited as the primary culprit, but demand fundamentals were also getting closer scrutiny. Traders were tired of hearing about weather holding back demand but for some, Mother Nature was still at the fore. Cold, winter-like weather conditions were still present in the Northeast, and rain pounded areas of the South. Tornado watches were in effect across the midsection of the US.


Tanzania to open up $1billion forestry sector

Tanzania is on the verge of formalising a fuel forestry business which is worth more than $1billion with aims of increasing government revenue obtained from forest resources. Tanzania Forestry Service Agency, Principal, Charles Ng’atigwa said the government is focusing on making the business sustainable to the environment.


Opengate Capital completes sale of Kotkamills


OpenGate Capital, a global private equity firm, announced on 23 March 2015, it has completed the sale of Kotkamills Oy, to MB Funds, an independent Finnish private equity firm focused on acquisitions in the Nordic market. Kotkamills, located in Kotka, Finland, is a manufacturer of specialty papers and wood-based products. Financial terms were not disclosed.

Acquired from Stora Enso in July of 2010, Kotkamills represents one of the most complex carve-out and transitions for OpenGate Capital to date. At acquisition, OpenGate launched its operations plan to consolidate Kotkamills’ five legal entities into a single business and establish entirely new IT, HR, treasury, finance, procurement, sales and logistics processes, separate from its parent company, Stora Enso.


China halts timber imports from three countries


On 8 April 2015 China’s National Endangered Species Office issued a directive suspending imports of CITES listed timber species (Pericopsis elata) and (Dalbergia cochinchinensis) from the Democratic Republic of Congo (DRC) and Laos.

The office reminded timber importers not import CITES listed timber from the two countries until the restriction is lifted.


US imported 8% more furniture in 2014


Following a 7% growth in 2013, US wooden furniture imports increased by 8% in 2014. Wooden furniture imports were worth $14.65 billion in 2014. Imports from all major suppliers increased. The largest growth was in imports from Vietnam and Mexico.


Tanzania and Kenya sign MoU on forest matters


Tanzania and Kenya have signed a memorandum of understanding (MoU) on the new forest cooperation agreement, which is set to improve the effectiveness of measures to tackle the rampant illegal logging and timber trade across the border. The MoU between the two governments was signed through their respective forest agencies in Arusha, Tanzania.


World largest CLT building


A 121-unit residential block, that when complete will be the largest cross laminated timber (CLT) building in the world, has started on site in Dalston Lane, Hackney in London. Designed by Waugh Thistleton Architects for property developer Regal Homes, the 16 000 square metres development includes 3 460 square metres of office space. Above a basement and ground floor of concrete, the building’s structure, designed with engineer Ramboll UK, is constructed from timber.


Equipment update


  Roll Wrapper Stanger Mill
  Inventory Controller Tugela Mill
  Business Analyst - Forest Operations Merebank, Durban (KZN)
  Head of Maintenance Ngodwana Mill
Upcoming events
Ligna 2015: Innovative edging technology improves wood utilisation and streamlines production


Price pressure and the high cost of raw materials and labour are having a major impact on the sawmill industry. When it comes to new investments, therefore, the wish list is headed off by equipment which can improve wood utilisation and resource efficiency or automate processes. Edging offers considerable optimisation potential, and many interesting innovations from sawmill equipment manufacturers and their partners can be explored at LIGNA 2015 from 11 to 15 May 2015.


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. Busby Sawmills (Pty) Ltd

4. Elandskraal Houtverwerkers

5. Evergreen Timbers

6. Franklin Sawmill

7. Midlands Pine Products (Pty) Ltd

8. Sapla Timbers

9. 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!

A doctor was addressing a large audience in Brisbane.

“The material we put into our stomachs is enough to have killed most of us sitting here, years ago.
Red meat is awful.
Soft drinks corrode your stomach lining.
Chinese food is loaded with MSG.
High fat diets can be disastrous and none of us realises the long-term harm caused by the germs in our drinking water.

However, there is one thing that is the most dangerous of all and we all have eaten or will eat it.
Can anyone here tell me what food it is that causes the most grief and suffering for years after eating it?”

After several seconds of quiet, a 75-year-old man in the front row raised his hand and softly said, “Wedding Cake”.

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