13, Aug 2022 -

Sawmilling South Africa - Annual Report 2021/2022

Sawmilling South Africa - Annual Report 2021/2022


Chairman's Report
The sawmilling industry has been relatively stable over the past 12 months, which has had a positive impact on employment, enhanced growth (albeit small) and stimulated economic activity in the regions we operate.

Although margins have improved, they must be seen against a background of below average returns for more than five years. It would appear that, as a result, sawmillers are investing in their own operations to do much needed improvements to their assets, as well as focus on efficiencies.

The latter has occurred against a background of excessive damage to property during the July 2021 insurrections as
well as from excessive summer rainfall. In addition, the poorly managed electricity network (Eskom) is pushing up operating costs, which is exacerbated by the dramatic increases in diesel. Production cost increases will have to be carefully managed over the next year to ensure we remain profitable and stable. Projected interest rate increases, as well as the continued high unemployment in the regions we operate, are also a big concern.

Our members have continued to be innovative and resilient – much needed in a business environment where the private
sector generally receives limited support from government. It has been encouraging that our association is growing –
the recent renewal of the membership of Hans Merensky is particularly gratifying. As Sawmilling South Africa (SSA)
is recognised by government as the representative of the sawmilling industry, it is vital that we have the support of the
majority of the sawmilling companies in South Africa.

Our relationships with the various industry bodies (Forestry South Africa, the South African Wood Preservers Association, the Institute of Timber Construction, the Paper Manufacturers Association of South Africa, etc.), as well as a number of government departments, have continued to strengthen, and are slowly delivering positive results.

Our association has had a productive year with numerous ongoing initiatives, which will impact on our businesses. These
are detailed in the Executive Director’s report.

I would like to highlight a few of these matters:

Skills and Technical Development through FP&M Seta
Our industry suffers from a serious lack of skilled persons in various production and maintenance occupations. The programme to implement apprenticeships and learnerships continues to be delayed by government red tape and incompetence. This needs urgent intervention by the Forest Sector Charter Council and Higher Education Ministry. The irony is that unemployment is relatively low for persons with higher education qualifications. It would therefore have been expected that government fast-track these courses. This training must start in 2022.

New plantings – Forestry Master Plan (FMP)
We are all aware that growth in our industry is linked to increasing our plantation areas. This would either be through new plantings or reviving existing forestry areas (Western and southern Cape fire damaged and exit areas; old Category B and C plantations). Both the DFFE and DTIC are very important in this process – again little progress is evident. It is hoped that SSA and FSA, through the PPGI forum, will be the catalyst for this process to be sped up, with extensive development during the next 12 months.

Marketing initiatives
One of the key activities for SSA is marketing of our products. The new branding is fresh and modern, and should position SSA (and its members) as a forward and outward thinking association.

The recent facilitation of an exercise to investigate exporting various products to Australia is extremely exciting. If successful, supplying sawmills could add value to their existing product range while broadening their customer base.

In addition, the Wood App will become operational this year. This will have a significant impact on the knowledge base for our products, as well as provide online training. Initially, training will focus on architects and designers/engineers, with a plan to broaden the target market in future.

I would again like to thank our Exco members for all their input over the past year. We continually strive to ensure our association will add value to our members’ companies while maintaining an objective and balanced approach. It is a relief that the ‘Age of Zoom/Teams’ will slowly be replaced by physical meetings, where discussion tends to be more interactive and hopefully more productive.

The work done by Roy, our ED, is also much appreciated. He has been instrumental in a number of new initiatives such as the export project, association branding and the Wood App, while at same time growing our member base and managing regular association business.

Although Covid is still very much part of our lives in 2022, it is hoped that sawmilling companies and their employees will act as responsible citizens to ensure that the pandemic is managed appropriately to ensure individuals remain healthy and active.

We have an association that we can be proud of, and which continues to make a difference in our industry. I believe we will continue to have a significant impact on our economy and in the regions where we operate. We need to actively contribute to creating an environment where all role players will benefit!

Duncan Mackay
June 2022

Read the full report HERE

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