CHAIRMAN’S REPORT | Duncan Mackay

As we pause and look back on the past 12 months, our earlier apprehension around prospects for the sawmilling industry proved to be quite justified, with limited opportunities for growth. We were instead mostly involved in ensuring that our companies survived to see another year.

Our members’ products should be in demand across a broad spectrum of markets – the affordable housing market, the traditional building sector, government carbon-friendly projects and in niche export markets. In addition, the exciting developments around mass structural lumber should further enhance demand.

The reality is that demand has been static over the past few years, with formal sawmills uncertain of the future. A plea to government to urgently address a number of these matters with practical interventions has unfortunately not produced anything substantial.

A review of industry statistics indicates several concerning issues:

• More than 1 700 job losses due to sawmill closures over the past four years, with formal
  sawmills being the most affected.
• Informal sawmill market volumes of more than 25% of the total lumber sales market. This
  includes unregulated bush mills producing ungraded structural size lumber, wet-off saw
  products, and packaging material.
• Structural product prices have largely remained unchanged over the past three years.
• Continued above inflation sawlog price increases.
• Regulated costs such as sawlogs, electricity, minimum wages, diesel and interest rates
  are an ever-increasing percentage of sawmill production costs.

We have continued to focus on initiatives to reverse the above trends, with several new action plans. A detailed report of these activities is in our Executive Director’s Report. Briefly these are:

• Interaction with the Department of Trade, Industry and Competition (the dtic), Forestry South Africa and the Department of Public Enterprises to promote growth in the sawmilling industry with focus on construction using locally produced products.
• To expand our information on export opportunities to include Africa and Asian markets
• The continuation of our webinars and the Wood App. We are extremely grateful for the input and involvement of various people and institutions. I would like to specifically note the role played by the universities of Pretoria and Stellenbosch that have taken this information transfer to the next level

We are still an active participant in the Forest Sector Charter Council, the Department of Forestry, Fisheries and the Environment (custodian of the Forestry Master Plan), the Fibre Processing & Manufacturing Sector Education and Training Authority (FP&M Seta), the South African Bureau of Standards and others to promote the importance of growth in our industry.

We will continue to focus on setting up apprenticeships and learnerships to ensure that our industry can attract suitably skilled persons who will have a role to play in helping us become more efficient and cost-effective.

The Forestry Master Plan remains our roadmap to increased economic growth and job creation in the rural communities of the provinces in which we operate. It promotes the production of sawlogs, sawmill viability and downstream beneficiation for our products, while ensuring that our operations are secure and safe. It would be wonderful if the key role players in government were to understand the importance of this document and urgently implement its action plans.

We are extremely grateful for the strong relationships we have with forestry industry bodies – Forestry South Africa, the South African Wood Preservers Association, the Institute of Timber Construction and the Paper Manufacturers Association of South Africa. We are reassured by the continuing support we have received during the past year.

I would like to note my appreciation for the time and input of our executive committee. The unwavering commitment of each person to our respective companies is reflected in the quality of input and contributions to our association. There is no doubt that we all believe in the desire to promote growth while becoming more efficient – we will eventually all benefit. Many thanks to our executive director, Roy Southey, who has overseen the shift in focus of our promotion strategy and relationships with government. Progress is slow, which is frustrating to us all, but we remain committed to these projects as there is no doubt that they have enormous potential as seen in other countries.

Sawmilling South Africa continues to be an association focused on promoting members’ interests, while at the same time playing a wider role in the communities where we operate. We continue to be recognised by government as the sawmilling sector’s representative, with our input being highly valued. I believe that the year ahead has the potential to provide a positive business environment in which we all can share.

June 2024

Download the SSA – Annual Report – 2023 I 2024