Forestry in South Africa
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May : FSA Annual Report 2013

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23 May, 2014

FSA Annual Report 2013

When the global financial crisis started in 2008, some analysts predicted that it would take three to five years before there were any signs of recovery in the world's major markets and that the recovery would be very slow when it started. This has certainly been the case for the Forestry Industry and after a gruelling five years, we started to see some early encouraging signs in the market at the close of 2013. While it is still early to be proclaiming a turnaround, the changes seen in 2013 (admittedly helped by a weak Rand in respect of exported forest products) were, nonetheless, a welcome respite from the years of deflation and recession that we have endured in Forestry in South Africa.

There was even better news in South Africa's collective response to this challenge. Our team in FSA has engaged tirelessly with Government in trying to address the many social, economic and environmental
challenges facing the sector. After years of lobbying both by Industry and by dedicated officials in Government, we received positive news in the research, development and innovation arena. In December the Department of Science and Technology (DST) approved FSA's application to establish a Sector Specific Innovation Fund. This will contribute to the development of further innovations in the fields of forest protection, species and site productivity, engineering and many other fields critical to improving our global competitiveness. Given the limitations for physical expansion of plantations in the country, RDI presents our best chances for improving our competitiveness.

Our sincerest thanks go to Dr Phil Mjwara and his officials in the DST for this generous and crucial support and to Dr Nthabiseng Motete of DAFF and her officials for supporting our application. Similarly, following years of lobbying, Transnet Freight Rail have demonstrated great vision in their dealing with the Industry. Where the Industry saw a major shift from rail to road due to decreased efficiencies, exorbitant tariff increases, closing of branch lines and sidings and reductions in forestry rolling stock, after meetings with the Group CEO in 2012 and senior TFR officials in 2013, they have put in place major efforts to address these challenges. These have reduced the logistics costs for many of our members. Our sincere thanks go to Brian Molefe, the Group CEO of Transnet, and to his team in TFR for these initiatives. We hope they herald a new era of co-operation between Transnet and the Forestry Industry, resulting in an increase in timber on rail, in the interests of both our Industry and the country at large.

These and other major achievements in the year are covered in more detail in this Report. There are significant new challenges which have arisen in 2013 relating to shifts in legislation, most importantly in relation to land restitution, broad-based black economic empowerment and changes in afforestation licencing requirements. These and other challenges are again described in detail in this Report, together with our action in this regard. We remain confident that with the excellent staff that we have in FSA, under the leadership of Michael Peter, and with the continued support from all Industry players, we can overcome these challenges in ways that make the Industry more resilient and ensure its sustainability. I would also like to acknowledge and thank our Vice-Chair, Mr Murray Mason, who has been an invaluable support to me and FSA on a number of occasions when pressing issues required our attention. I look forward to working closely with him and Watson
Nxumalo, as the new Chair and Vice-Chair respectively, in the year ahead. I urge you all to give your active support to our Industry body. We need the active participation of all our members. Through our co-operative efforts, we continue to have influence way beyond our relative size, bringing important benefits to our members and ensuring our perspective is heard and understood in relevant national debates.

Wishing you all a prosperous and safe 2014.

Viv McMenamin
Forestry South Africa

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