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Sawmillers on the ropes

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Sawmillers large and small are under pressure as a result of rising input costs, load shedding, round log resource constraints and tough market conditions.

A ‘perfect storm’ of rising input costs, roundlog resource challenges, unreliable electricity supply, declining exchange rates, high prime lending interest rates and shrinking markets has put South Africa’s sawmilling industry under severe pressure. Many sawmilling businesses are operating at break-even or worse, resulting in business closures and mounting job losses.

This is the sad story shared by Sawmilling South Africa’s Chairperson Duncan MacKay and Executive Director Roy Southey at the SSA AGM held in Pretoria recently.

“We have seen a reduction in saw log volume throughput, resulting in sawmill closures and further job losses,” said Duncan, who is a Director at White River Sawmills. The most affected provinces are Mpumalanga, Limpopo, KwaZulu-Natal and Eastern Cape, where unemployment is already running at more than 40%, he said.

As a consequence of the extremely difficult economic conditions, sawmills have been engaged in alternative power supply projects and cost management, devoting less attention to replacing or improving production technology, said Duncan.

He said that SSA has an active relationship with government and participates in a number of government/business initiatives, and has highlighted the plight of sawmillers at these forums, but to no avail.

“It would appear that Government does not understand the urgency of the situation - or has little or no interest in our sector,” said Duncan. “It is therefore becoming increasingly obvious that our industry will have to take the initiative by taking appropriate steps to enhance our own interests. Interaction and input from our members is becoming more critical to ensure prosperity for our companies.”

Promoting use of structural timber
In order to boost demand SSA is taking a proactive role in promoting the use of structural timber products with architects and designers, and facilitating access to export markets for value added timber products to boost economic growth and create jobs.

To this end SSA has almost concluded the sampling phase of negotiations with Wespine to have timber originating in South Africa graded to Australian specifications. This will allow South African sawmills to export sawn timber to Australia.

Apprenticeships and learnerships
SSA members have also been engaged in the development of apprenticeships and learnerships that are seen as crucial for the growth and development of the sector. The first of these, a Saw Doctor

Apprenticeship, should be ready for implementation by the end of 2023. Additional funding received from the FP & M Seta will enable work to continue in the development of the kiln drying and wet and dry mill operator programmes.

Executive Director Roy Southey reported that SSA’s individual sawmill membership has remained fairly constant through the year at 47. However Roy said they had lost the membership of Limpopo-based Stevens Lumber Mills which closed temporarily in April citing load shedding challenges and problems with round log procurement as the main reasons. Stevens Lumber Mills is one of the oldest sawmills in South Africa, and has been operating for over 60 years.

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Sawmilling SA Chairperson Duncan MacKay (left) and Executive Director Roy Southey.

On a happier note, Roy welcomed back Geelhoutvlei Timbers sawmill in the southern Cape, which has completed a rebuild after it was gutted by fire in 2018.

“2023 has certainly been the toughest year ever for the sawmilling sector in South Africa and one in which we have seen the closure of a number of mills with the resultant devastating effect on rural economies. Sawmilling, which for many years has been a driver of job and wealth creation in many rural areas from the Limpopo to the Cape, is under pressure from a multitude of challenges,” said Roy.

“However, not all is lost. If you consider the groundswell of interest in timber building driven by the green economy, the rapid development of the mass timber movement, the advances in recovery from log mechanisation, the development of export markets, and the move towards additional timber-based products, the future does not look quite so bleak.

“The challenge for us as sawmillers is to rise and grasp these opportunities and gear our businesses to take advantage of this shift away from commodities towards value-added products. Then we will certainly survive,” concluded Roy.

This silver lining of optimism amidst the storm clouds of our troubled land was echoed by Forestry South Africa’s Executive Director, Michael Peter, who presented the keynote address at the SSA AGM. Ever the optimist, Michael is heavily involved in several public/private sector initiatives set up to tackle the energy, rail and ports challenges, and he maintains that real progress is being made on all these fronts and that solutions are achievable.

He also pointed out that the Department of Environment, Forestry and Fisheries has recently called for expressions of interest from the private sector to partner with local communities to bring the so-called exit-reversal state plantations located in the Western Cape back into production. That represents 22 000 ha of mainly pine plantations that – once fully operational - will go some way towards alleviating the shortage of round log resources in the Cape region at least.

Sawmill Productivity Improvement Award

The annual Sawmilling Productivity Improvement Award was presented to the Tekwani owned e'Mpuluzi Sawmill in Mpumalanga, during the SSA AGM.

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Andrew Crickmay (left) of Crickmay & Associates presents the Sawmilling Productivity Improvement Award to Sean Hoatson of Tekwani Timbers..

Runners up were (in alphabetical order):
• Bracken Timbers
• Eswatini Plantations
• Eswatini Treated Timber
• Dulini (GNG)
• Jessievale (York Timbers)
• Langeni (Merensky)
• George Sawmill (MTO)
• RF Gevers
• Thornville (Tekwani)

The purpose of the Sawmill Productivity Improvement Award is to give recognition to mills that show improvement that serves to make them more competitive. As the focus is on improvement, the winning mill is not necessarily the most profitable mill. The award is based on results from the Intermill Comparison, a quarterly benchmarking report produced by Crickmay & Associates. The floating trophy was first awarded in 1991.

The post Sawmillers on the ropes appeared first on SA Forestry Online.
 
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