SOUTH AFRICAN FORESTRY AND FOREST PRODUCTS INDUSTRY 2016

SOUTH AFRICAN FORESTRY AND FOREST PRODUCTS INDUSTRY 2016 Image: Mondi SEPTEMBER 2017 By Roger Godsmark

Presentation Outline Introduction The importance of the Forestry Industry The importance of the Forest Products Industry Industry Contribution to Employment Investment Industry Contribution to GDP Industry Contribution to Foreign Trade

Section 1 INTRODUCTION

Land Use in South Africa Grazing Arable Nature Conservation Other Forestry 13.9% 9.6% 6.9% 1.0% Total RSA land area 122.3 million ha 1 220 726 ha 68.6%

Land Use in Mpumalanga Grazing Arable Nature Conservation Other Forestry 28.5% 3.9% 21.9% 6.1% 495 247 ha Total MP land area 8.2 million ha (6.7% of total) 39.6%

Land Use in KwaZulu Natal Grazing Arable Nature Conservation Other Forestry 12.9% 15.1% 8.5% 5.3% 486 956 ha Total KZN land area 9.1 million ha (7.5% of total) 58.3%

Land Use in the Eastern Cape Grazing Arable Nature Conservation Other Forestry 6.8% 3.7% Total E. Cape land area 17.1 million ha (13.9% of total) 8.7% 0.8% 141 408 ha 80.0%

Land Use in the Western Cape Grazing Arable Nature Conservation Other Forestry 20.1% 5.6% 3.5% 0.3% Total W. Cape land area 12.9 million ha (10.6% of total) 70.4% 44 030 ha

Land Use in Limpopo Grazing Arable Nature Conservation Other Forestry 14.3% 9.7% Total Limpopo land area 12.0 million ha (9.8% of total) 74.0% 1.5% 0.4% 53 085ha

Plantation area as % of land area by province Mpumalanga 6.05% KZN 5.32% E.Cape 0.83% Limpopo 0.44% W. Cape 0.34% 0% 1% 2% 3% 4% 5% 6% 7% % of Land Area Afforested

Land use comparisons: 2006, 2011 & 2016 2016 2011 2006 Maize 2.032 2.213 2.859 Forestry 1.221 1.273 1.282 Wheat Sugar 0.508 0.605 0.765 0.362 0.376 0.424 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Million Hectares Drop in forestry area: 61 000 ha (4.8%)

Plantation Area Comparisons 2016 China India Russia USA Japan Indonesia Brazil Thailand Ukraine Iran RSA 46.670 32.578 17.340 16.238 10.682 9.871 4.982 4.920 4.425 2.284 1.221 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Million Hectares

Section 2 THE FORESTRY INDUSTRY

Plantation Area by Species 2016 Pine Eucalyptus Wattle Other 7.1% 0.4% 42.7% 49.8% Total 1 220 726 ha

Plantation Area by Ownership 2016 Corporate Commercial Farmers Corporate (Ex Safcol) SAFCOL State/ Municipalities Small Growers 17.0% 11.7% 10.5% Total 1 220 726 ha 50.2% 7.0% 3.7%

Plantation Area by Province 2016 Limpopo Mpumalanga KZN E. Cape W. Cape 11.6% 3.6% 4.3% 40.6% Total 1 220 726 ha 39.9%

Plantation Area by Province and Genera 2016 Hardwood Softwood Mpumalanga 193 242 302 005 KZN 115 922 371 034 E.Cape Limpopo W. Cape 23 408 23 668 29 417 1 559 42 471 118 000 0 100 000 200 000 300 000 400 000 500 000 Hectares Total 607 815 ha (softwood); Total 612 911 ha (hardwood)

Plantation Area by Province and Genera 2016 Softwood Hardwood Mpumalanga 495 247 KZN 486 956 E.Cape 141 408 Limpopo 53 085 W. Cape 44 030 0 100 000 200 000 300 000 400 000 500 000 600 000 Hectares Total 607 815 ha (softwood); Total 612 911 ha (hardwood)

Planted Area Comparisons by Province & Species 2016 KZN Mpumalanga E Cape W Cape Limpopo Pine 42 471 29 417 115 922 118 000 302 005 Eucalyptus 20 933 1 311 23 550 178 123 297 430 Wattle 12 509 1 971 71 20 72 531 Other 1 073 2 610 505 176 98 0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 Hectares

Pine Plantation Area by Province 2016 Mpumalanga KZN E Cape W Cape Limpopo 7.0% 4.8% 19.4% 49.7% Total 607 815 ha (49.8% of total) 19.1%

Eucalyptus Plantation Area by Province 2016 Mpumalanga KZN E Cape W Cape Limpopo 57.1% 4.0% 0.3% 4.5% Total 521 347 ha (42.7% of total) 34.2%

Wattle Plantation Area by Province 2016 Mpumalanga KZN E Cape W Cape Limpopo 83.3% Total 87 101 ha (7.1% of total) 2.3% 0.1% 0.0% 14.4%

Other Hardwood Plantation Area by Province 2016 Mpumalanga KZN E Cape W Cape Limpopo 24.0% 58.5% Total 4 463 ha (0.4% of total) 3.9% 2.2% 11.3%

Plantation Area by Management Objectives 2016 Pulpwood Sawlogs Mining Timber Poles Other 38.0% Total 1 220 726 ha 56.8% 2.3% 2.1% 0.8%

Softwood Plantation Area by Management Objectives 2016 Pulpwood Poles Sawlogs Other 73.5% 0.0% Total 607 815 ha 26.1% 0.4%

Hardwood Plantation Area by Management Objectives 2016 Pulpwood Sawlogs Mining Timber Poles Other 2.9% 4.6% 4.1% 1.2% Total 612 911 ha 87.2%

Plantation Area by Province and Ownership 2016 Private Public Mpumalanga 132 179 362 765 KZN 31 560 455 396 E.Cape Limpopo W. Cape 27 226 28 598 24 487 43 449 581 114 182 Leased Safcol packages included in Private KLF included in Public 0 100 000 200 000 300 000 400 000 500 000 600 000 Hectares Total Private 1 004 389 ha (82.3%) Total Public 216 337 ha (17.7%)

Percentage Plantation Ownership by Province 2016 Publicly Owned Privately Owned 100% 80% 54% 60% 73% 81% 94% 99% 40% 20% 0% Province Total Private 1 004 389 ha (82.3%) Total Public 216 337 ha (17.7%)

Plantation Area by Species and Ownership 2016 Private Public Pine 159 605 448 211 Other Hard. 3 641 822 Eucalyptus 51 450 469 897 Wattle 4 461 82 640 0 100 000 200 000 300 000 400 000 500 000 600 000 Hectares Total Private 1 004 389 ha (82.3%) Total Public 216 337 ha (17.7%)

Percentage Plantation Ownership by Species 2016 Public Private 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 74% 82% 90% 95% Pine Other Hard. Eucalyptus Wattle Species Total Private 1 004 389 ha (82.3%) Total Public 216 337 ha (17.7%)

Planted Area Comparisons by Province & Product 2016 KZN Mpumalanga E Cape W Cape Limpopo Pulpwood 20 092 11 3 449 255 392 414 411 Sawlogs Mining Timber Other 65 781 107 457 43 657 39 129 1 947 23 722 1 416 4 1 172 4 817 7 792 12 443 358 9 335 208 339 0 100 000 200 000 300 000 400 000 500 000 Hectares

Roundwood Production by Product 2016 Pulpwood 10.881 Sawlogs 4.447 Mining Timber 0.433 Poles 0.328 Other 0.353 0 2 4 6 8 10 12 14 Million m3 Total 6.6 million m3 / 6.9 mt (softwood) Total 9.8 million m3 / 7.3 mt (hardwood)

Total 6.6 million m3 / 6.9 mt (softwood) Total 9.8 million m3 / 7.3 mt (hardwood) Roundwood Production by Province and Genera 2016 Hardwood Softwood KZN 1.532 6.887 Mpumalanga 2.297 2.964 E. Cape 0.188 1.318 Limpopo 0.430 0.299 W. Cape 0.003 0.524 0 1 2 3 4 5 6 7 8 9 Million m3

Roundwood Production by Province and Genera 2016 Softwood Hardwood KZN 8.419 Mpumalanga 5.261 E. Cape 1.507 Limpopo 0.729 W. Cape 0.527 0 2 4 6 8 10 Million m3 Total 6.6 million m3 / 6.9 mt (softwood) Total 9.8 million m3 / 7.3 mt (hardwood)

Roundwood Production ex Plantations by Province & Product 2016 Pulpwood Sawlogs Other KZN 0.265 0.895 7.259 Mpum 0.402 1.749 3.110 E. Cape 0.505 0.896 0.105 Limpopo 0.007 0.415 0.307 W. Cape 0.000 0.492 0.035 0 1 2 3 4 5 6 7 8 Million m3 Total 16.4 million m3 or 14.2 million tons

Roundwood Production ex Plantations by Province & Product 2016 Other Sawlogs Pulpwood KZN 8.419 Mpum 5.261 E. Cape 1.507 Limpopo 0.729 W. Cape 0.527 0 2 4 6 8 10 Million m3 Total 16.4 million m3 or 14.2 million tons

Total Roundwood Production ex Plantations by Province 2016 KZN Mpumalanga E. Cape Limpopo W. Cape 11.5% 31.4% 3.9% 0.8% 52.5% Total 17.9 million m3 or 15.3 million tons

Total Roundwood Production ex Plantations by Product 2016 Pulpwood Sawlogs Mining Timber Poles Other 27.0% 2.6% 2.0% 2.1% 66.2% Total 16.4 million m3 or 14.2 million tons

Softwood Roundwood Production ex Plantations by Product 2016 Sawlogs Pulpwood Poles Other 34.5% 0.8% 0.9% 63.7% Total 6.6 million m3 or 6.9 million tons

Hardwood Roundwood Production ex Plantations by Product 2016 Pulpwood Mining Timber Poles Sawlogs Other 4.4% 2.8% 2.2% 3.0% 87.6% Total 9.8 million m3 or 7.3 million tons

Total Roundwood Production ex Plantations by Species 2016 Pine Eucalyptus Wattle Other 54.1% 5.2% 0.4% 40.4% Total 16.4 million m3 or 14.2 million tons

Composition of Roundwood Production by Product 2016 100% Softwood Hardwood 80% 60% 40% 95% 20% 21% 17% 17% 0.0% 0% Sawlogs Pulpwood Other Poles Mining Timber Product Overall: Softwood = 40% & Hardwood = 60%

Hectares Total Plantation Area 1980 to 2016 1 600 000 1 500 000 19.6% decrease 1 400 000 1 300 000 1 200 000 1 100 000 59 319 ha increase 297 412 ha decrease 1 000 000 1980 1985 1990 1995 2000 2005 2010 2015 Years Total increase in planted area over period 59 319 ha (5.1%)

Total Roundwood Production ex Plantations 1980 to 2016 Million m3 24 22 20 18 16 14 12 10 1980 1985 1990 1995 2000 2005 2010 2015 Years Total increase in production over period: 38.4% Total increase in afforested area over period: 5.1%

1980 = 100 Index of Roundwood Production vs. Plantation Area 1980 to 2016 200 Plantation Area Plantation Production 180 160 140 120 100 80 1980 1985 1990 1995 2000 2005 2010 2015 Years Total increase in production over period: 38.4% Total increase in afforested area over period: 5.1%

m3 per hectare Average Productivity per Hectare 1980-2016 18 17 16 15 14 13 12 11 10 9 8 1980 1985 1990 1995 2000 2005 2010 2015 Years Total increase in productivity over period 3.2 m 3 per ha p.a. (32%)

Production Comparisons 2006, 2011 & 2016 2016 2011 2006 Sugar Forestry 14.861 16.016 14.222 16.013 19.573 21.052 Maize 6.947 7.740 10.924 Wheat 1.918 2.014 2.114 0 5 10 15 20 25 Million tons

Value of Roundwood Production 2016 Pulpwood Mining Timber Other Sawlogs 22.9% 3.2% 2.3% Total R9.0 billion (R0.5bn less than 2015) 71.6%

Value of Roundwood Production ex Plantations by Product 2016 Pulpwood 6.465 Sawlogs 2.029 Poles 0.231 Mining Timber 0.204 Other 0.060 0 1 2 3 4 5 6 7 8 Billion Rands Total R8 988 million

Value of Roundwood Production ex Plantations by Province 2016 KZN 4 835 Mupumlanga 2 830 Eastern Cape 754 Limpopo 330 Western Cape 239 0 1 000 2 000 3 000 4 000 5 000 6 000 Million Rands Total R8 988 million

Value of Roundwood Production ex Plantations by Province & Product 2016 Pulpwood Sawlogs Other KZN 114 408 4 312 Mupumlanga 184 798 1 848 Eastern Cape 45 300 409 Limpopo 4 189 137 Western Cape 0 15 224 0 1 000 2 000 3 000 4 000 5 000 Million Rands Total R8 988 million

Value of Roundwood Production ex Plantations by Province & Product 2016 Other Sawlogs Pulpwood KZN 4 835 Mupumlanga 2 830 Eastern Cape 754 Limpopo 330 Western Cape 239 0 1 000 2 000 3 000 4 000 5 000 6 000 Million Rands Total R8 988 million

Billion Rand (2014/15 Rands) Value of Roundwood Production 1980 to 2016 Nominal Real 12.0 10.0 8.0 6.0 4.0 2.0 0.0 1980 1985 1990 1995 2000 2005 2010 2015 Years Nominal increase over period: R8.8 bn (5 364%) Real increase over period: R5.0 bn (124%)

Thousand Hectares New Afforestation by Region 1980 to 2016 Northern KZN Cape Total 50 40 30 AVERAGE 20 10 0 1980 1985 1990 1995 2000 2005 2010 2015 Years New afforestation over period: 390 912 ha Average per year: 10 565 ha

Total New Afforestation by Region 1980 to 2016 KZN Mpumalanga & Limpopo E&W Cape 11.8% 33.6% 54.6% Total 390 912 ha

Total New Afforestation by Region 10 Yr Period - 2007 to 2016 KZN Mpumalanga & Limpopo E&W Cape 24.2% 0.7% Total 17 299 ha 75.1%

Thousand Hectares New Afforestation by Region 10 Year Period 2007 to 2016 Northern KZN Cape Total 5 4 3 AVERAGE 2 1 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years New afforestation over period: 17 299 ha Average per year: 1 730 ha

New Afforestation by Province 2016 W. Cape KZN Limpopo Mpumalanga E. Cape 1.4% 30.4% 0.0% 0.0% Total 1 107 ha 68.2%

Thousand Hectares New Afforestation by Species 1980 to 2016 Pine Eucalyptus Wattle/Other Total 50 45 40 35 30 25 20 15 10 5 0 AVERAGE PER ANNUM 1980 to 1985: 10 974 ha (16.8% of total) 1986 to 1990: 24 558 ha (31.4% of total) 1991 to 1995: 24 406 ha (31.2% of total) 1996 to 2000: 7 019 ha (9.0% of total) 1980 1985 1990 1995 2000 2005 2010 2015 Years

Total New Afforestation by Species 1980 to 2016 Pine Eucalyptus Wattle Other 8.6% 1.0% 46.8% Total 390 912 ha 43.7%

New Afforestation by Species 2016 Eucalyptus Wattle Pine Other Hardwood 0.5% 10.1% 47.5% Total 1 107 ha 41.9%

Thousand Hectares New Afforestation by Product 1980 to 2016 Pulpwood Sawlogs Mining Timber Other Total 50 45 40 35 30 25 20 15 10 5 0 AVERAGE PER ANNUM 2001 to 2005: 5 044 ha (6.5% of total) 2006 to 2010: 2 225 ha (3.3% of total) 2011 to 2016: 1 163 ha (1.8% of total) 1980 1985 1990 1995 2000 2005 2010 2015 Years

Total New Afforestation by Product 1980 to 2016 Pulpwood Sawlogs Mining Timber Other 13.8% 5.6% 23.0% 57.6% Total 390 912 ha

New Afforestation by Product 2016 Pulpwood Sawlogs Poles 56.3% 0.5% Total 1 107 ha 43.1%

Hectares Area Converted Out of Timber Production by Species 1980 to 2016 7 000 6 000 5 000 Pine Eucalypts Wattle/Other Total 4 000 3 000 2 000 1 000 0 1980 1985 1990 1995 2000 2005 2010 2015 Years Area converted over period: 92 257 ha Average p.a.: 2 493 ha

Hectares Area Converted Out of Timber Production by Species 2007 to 2016 4 000 3 500 3 000 Pine Eucalypts Wattle/Other Total 2 500 2 000 1 500 1 000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Area converted over period: 7 906ha Average p.a.: 791 ha

Total Area Converted out of Timber Production by Species 1980 to 2016 Pine Eucalypts Wattle Other 2.5% 23.9% 45.6% Total 92 253 ha 28.0%

Total Area Converted out of Timber Production by Species 2016 Pine Eucalypts Other Hardwood Wattle 0.0% 29.0% 57.7% Total 638 ha 13.3%

Thousand Hectares Net New Afforestation by Species 1980 to 2016 Pine Eucalypts Wattle/Other Total 45 40 35 30 25 20 15 10 5 0-5 -10 1980 1985 1990 1995 2000 2005 2010 2015 Years Net new afforestation over period: 98 657 ha

Thousand Hectares Net New Afforestation by Species 2007 to 2016 Pine Eucalypts Wattle/Other Total 5 4 3 2 1 0-1 -2-3 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Net new afforestation over period: 9 391 ha Average p.a.: 939 ha

Net New Afforestation by Species 1980 to 2016 Pine Eucalypts Wattle Other 47.1% 0.5% 3.9% Total 298 657 ha 48.5%

Hectares Net New Afforestation by Species 2016 500 400 441 300 279 200 100 0 5-100 -200-300 -256 Pine Eucalypts Wattle Other Species Total net new afforestation - 469 ha

Hectares Area Converted Out of Timber Production by Region 1980 to 2016 7 000 6 000 5 000 North KZN Cape Total 4 000 3 000 2 000 1 000 0 1980 1985 1990 1995 2000 2005 2010 2015 Years Area converted over period: 92 257 ha

Hectares Area Converted Out of Timber Production by Region 2007 to 2016 4 000 3 500 3 000 North KZN Cape Total 2 500 2 000 1 500 1 000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Area converted over period: 7 910 ha Average p.a.: 791 ha

Total Area Converted out of Timber Production by Region 1980 to 2016 Mpumalanga & Limpopo KZN E&W Cape 27.5% 42.5% Total 92 257 ha 29.9%

Thousand Hectares Net New Afforestation by Region 1980 to 2016 45 40 35 30 25 20 15 10 5 0-5 -10 North KZN Cape Total 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 Years Net new afforestation over period: 298 657 ha Average p.a.: 8 072 ha

Thousand Hectares Net New Afforestation by Region 2007 to 2016 North KZN Cape Total 5 4 3 2 1 0-1 -2-3 -4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Net new afforestation over period: 9 389 ha Average p.a.: 939 ha

Net New Afforestation by Region 1980 to 2016 Mpumalanga & Limpopo KZN W&E Cape 7.0% 34.7% Total 298 657 ha 58.3%

Thousand Hectares Conversion of Plantations out of Production & to Other Species 1980 to 2016 Pine Eucalyptus Wattle/Other Total 15 10 5 0-5 -10-15 -20 1980 1985 1990 1995 2000 2005 2010 2015 Years Net loss to production area over period: 92 254 ha Average p.a.: 2 493 ha

Thousand Hectares Conversion of Plantations out of Production & to Other Species 2007 to 2016 Pine Eucalyptus Wattle/Other Total 10 8 6 4 2 0-2 -4-6 -8 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Net loss to production area over period: 7 907 ha Average p.a.: 791 ha

Total Area Converted out of Production & to Other Species 1980 to 2016 Hectares 60 000 40 000 42 956 20 000 0-20 000-40 000-60 000-80 000-100 000-80 408-57 687 2 885 Pine Eucalypts Wattle Other Species Net loss to production area over period: 92 254 ha Average p.a.: 2 493 ha

Hectares Area Converted out of Production & to Other Species 2016 2 000 1 500 1 379 1 000 500 0 5-500 -1 000-1 500-2 000-538 -1 484 Pine Eucalypts Wattle Other Species Land taken out of timber production: 638 ha

Hectares Net Addition to Planted Area by Species 1980 to 2016 Pine Eucalyptus Wattle/Other Total 50 40 30 20 10 0-10 -20 1980 1985 1990 1995 2000 2005 2010 2015 Years Total net addition to production area: 298 656 ha Average p.a.: 8 072 ha

Hectares Net Addition to Planted Area by Species 2007 to 2016 Pine Eucalyptus Wattle/Other Total 12 10 8 6 4 2 0-2 -4-6 -8 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Total net addition to production area: 9 390 ha Average p.a.: 939 ha

Total Net Addition to Planted Area by Species 1980 to 2016 Hectares 250 000 200 000 213 696 150 000 100 000 102 384 50 000 0-50 000 6 600-24 004 Pine Eucalyptus Wattle Other Species Total net addition to production area: 298 656 ha Average p.a.: 8 072 ha

Hectares Net Addition (Loss) to Planted Area by Species 2016 2 000 1 491 1 500 1 000 500 0-500 -74 10-1 000-1 500-2 000-958 Pine Eucalyptus Wattle Other Species Total net gain in production area: Plus 469 ha

Thousand Hectares Damage to Plantations by Genera 1980 to 2016 Softwood Hardwood Total 120 100 80 60 40 20 0 1980 1985 1990 1995 2000 2005 2010 2015 Years Total area damaged over period: 1 117 434 ha Average p.a.: 30 201 ha

Thousand Hectares Damage to Plantations by Fires 1980 to 2016 Fire Other Causes Total 120 100 80 60 40 20 0 1980 1985 1990 1995 2000 2005 2010 2015 Years Total area damaged over period: 1 117 434 ha Total area damaged fire: 653 294 ha (58%) Total area damaged - other causes: 464 140 ha (42%)

Thousand Hectares Damage to Plantations by Fires 2007 to 2016 Fire Other Causes Total 120 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Total area damaged over period: 384 412 ha Total area damaged fire: 261 674 ha (68%) Total area damaged - other causes: 122 738 ha (32%)

Damage to Plantations by Fires 1980 to 2016 Fire Other Causes 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1980 1985 1990 1995 2000 2005 2010 2015 Years

Damage to Plantations by Genera 2016 Softwood Hardwood 35.6% Total 64.4% 27 802 ha (2.3% of total planted area)

Damage to Plantations by Cause 2016 Fire Other Causes 48.8% Total 27 802 ha 51.2%

Damage to Plantations by Fire 2016 Arson Accidental Natural Unknown 39.2% 22.9% Total 14 223 ha 5.3% 32.7%

Number of Certificates FSC Certificates RSA vs. Africa: as at September 2017 Africa South Africa 250 200 150 100 50 52 RSA 38% of African Total 20 197 RSA 58% of African Total 115 0 Farm Managment Unit Chain of Custody RSA FMU certificates cover 1.417 million ha or 18% of African total coverage of 7.709 million ha

FSC Certified Forest Areas in Africa as at September 2017 DRC 2 479 Gabon 2 043 RSA 1 417 Cameroon 1 130 Other Tanzania Swaziland Mozambique 281 184 124 51 0 500 1 000 1 500 2 000 2 500 3 000 Thousand Hectares Total FSC certified area in Africa: 7 708 888 ha

FSC Certified Forest Areas in Selected Countries as at September 2017 Brazil 7 081 Chile 2 281 RSA NZ Australia Uraguay 1 417 1 271 1 231 934 China Argentina 507 468 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 Thousand Hectares Total FSC certified area in world: 198 million ha

FSC Certified Forest Areas Top 5 Countries as at September 2017 Canada 54.804 Russia 44.092 USA 13.549 Sweden 12.260 Belarus 7.773 0 10 20 30 40 50 60 70 Million Hectares Total FSC certified area in world: 198 million ha

FSC Certified Forests by Region as at September 2017 Europe 94.501 North America 69.015 Latin America 14.299 Asia 9.629 Africa 7.709 Oceania 2.665 0 10 20 30 40 50 60 70 80 90 100 110 Million Hectares Total FSC certified area: 198 million ha in 84 countries

FSC Certified Forests by Ownership: as at September 2017 Private Cos Private Cos (ex SAFCOL) SAFCOL (KLF) Group Schemes 15.4% 13.2% 12.8% 58.6% Certified Area 1 416 953 ha (incl. planted & non-planted areas)

FSC Certified Forests by Ownership as at September 2017 Private Cos 830.358 Group Schemes 218.214 SAFCOL (KLF) 187.417 Private Cos (ex SAFCOL) 180.964 0 100 200 300 400 500 600 700 800 900 1 000 Thousand Hectares Total FSC certified area: 1 416 953 ha

Section 3 THE FOREST PRODUCTS INDUSTRY

Number of Processing Plants by Type 2016 Sawmills 75 Pole Plants 35 Pulp, Paper & Board Mills 17 Mining Timber Mills 17 Charcoal Plants 4 Veneer Plants 2 Match Factories 1 0 10 20 30 40 50 60 70 80 90 Number of Plants Total number of plants: 151

Million m3 Intake of Roundwood into Processing Plants 1980 to 2016 25 Pulp & Paper Mills Sawmills Mng. Timber Mills Other Total 20 15 10 5 0 1980 1985 1990 1995 2000 2005 2010 2015 Years Total increase in intake over period: 5.3 m m 3 (48%) Biggest increase that of pulpwood: 7.0 m m 3 (166%)

Intake of Roundwood into Processing Plants 2016 Pulp, Paper & Board Mills Sawmills Mng. Timber Mills Other 24.6% 2.9% 3.8% Total 16.4 million m 3 68.6%

Roundwood Intake into Processing Plants by Province & Product 2016 Pulpwood Sawlogs Other KZN 0.214 0.942 8.954 Mpum E Cape Limpopo W Cape 0.506 0.305 0.513 0.016 0.021 0.640 0.285 0.000 0.355 0.081 1.947 1.580 0 2 4 6 8 10 Million m3 Total 16.4 million m 3

Roundwood Intake into Processing Plants by Province & Product 2016 Other Sawlogs Pulpwood KZN 10.110 Mpum 4.034 Limpopo 0.947 E Cape 0.834 W Cape 0.436 0 2 4 6 8 10 12 Million m3 Total 16.4 million m 3

Average Size of Plant by Intake 1980 vs. 2016 2016 1980 Pulp & Paper Mills 351 660 Average All Other Plants Sawmills Mng. Timber Mills 46 53 26 53 25 28 72 109 Overall average intake has increased by: 137% Average intake of Sawmills has increased by: 112% Only average intake of MT Mills has declined by: 61% Pole Plants 10 7 0 100 200 300 400 500 600 700 800 Thousand m3

Thousand Units Sales of Certain Products from Processing Plants 1980 to 2016 6 000 Pulp (t) Lumber (m3) Mng. Timber (t) Chips (t) 5 000 4 000 3 000 2 000 1 000 0 1980 1985 1990 1995 2000 2005 2010 2015 Years Biggest increase that of chips: 1.8 million tons (+335%) Biggest decrease that of mining timber: 1.3 million tons (-79%)

Value of Sales from Primary Processing Plants 2016 Pulp Chips Lumber Panels Mng. Timber Poles Other 23.4% 5.9% 7.1% 1.5% 4.2% 0.9% Total R25.5 billion 56.9%

Value of Sales from Primary Processing Plants 2016 Pulp 14.529 Lumber 5.971 Panels 1.824 Chips 1.506 Poles 1.080 Mng. Timber 0.383 Other 0.242 Total R25.5 billion 0 4 8 12 16 Billion Rand

Billion Rand (2015/16 Rands) Value of Sales from Primary Processing Plants 1980 to 2016 Nominal Real 40 35 30 25 20 15 10 5 0 1980 1985 1990 1995 2000 2005 2010 2015 Years Nominal increase over period R24.8 bn (3 563%) Real increase over period R8.5 bn (50%)

Value of Roundwood Sales from Processing Plants by Product & Province 2016 Pulp / Boards / Chips Sawn Timber Other KZN 450 1 395 14 188 Mpum 554 3 085 2 341 Limpopo E. Cape W. Cape 33 949 556 484 760 36 0 526 180 Total R25.5 billion 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 Million Rands

Value of Roundwood Sales from Processing Plants by Product & Province 2016 Other Sawn Timber Pulp / Boards / Chips KZN 16 033 Mpum 5 980 Limpopo 1 538 E. Cape 1 279 W. Cape 706 Total R25.5 billion 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 Million Rands

Gross Value of Output Comparisons 2006, 2011 & 2016 2016 2011 2006 For. Prods. 15.679 21.407 25.535 Maize 7.419 16.725 28.094 Forestry 8.988 7.012 5.167 Wheat 7.129 4.774 3.223 Sugar Cane 6.792 4.990 3.654 0 5 10 15 20 25 30 35 Billion Rand

Gross Value of Output Comparisons per Planted Hectare 2006, 2011 & 2016 2016 2011 2006 For. Prods. 12 230 16 816 20 913 Sugar 8 618 13 271 18 762 Wheat 4 213 7 891 14 033 Maize 3 651 5 850 12 695 Forestry 5 508 4 030 7 361 0 5 000 10 000 15 000 20 000 25 000 Rands per Hectare

Value Addition in Primary Processing Industry 2016 Input Output Total Industry 8 988 25 535 Pulp / Paper Mills 6 465 17 858 Sawmills Pole Plants M. T. Mills Charcoal Plants 2 029 231 1 080 204 383 46 54 5 841 0 5 000 10 000 15 000 20 000 25 000 30 000 Million Rand Note: excludes secondary processing (e.g. paper manufacturing)

Value Addition Comparisons in Primary Processing Industry 2016 Pole Plants 4.67 Sawmills 2.88 Total Industry 2.84 Pulp / Paper Mills 2.76 M. T. Mills 1.88 Charcoal Plants 1.18 0.0 1.0 2.0 3.0 4.0 5.0 Output as ratio of Input Note: Based only on input value of raw fibre (i.e. excludes all other input costs)

Section 4 CONTRIBUTION TO EMPLOYMENT

Forest Sector Employment RSA 2016 Sub-sector No. of employees Total Employment Direct Indirect Forestry 60,200 28,000 88,200 Pulp and Paper 13,200 10,800 24,000 Sawmilling 20,000 8,000 28,000 Timber Board 6,000 n/a 6,000 Mining Timber 2,200 n/a 2,200 Other 10,000 n/a 10,000 Total 111, 600 46,800 158 400 Direct jobs in Forestry = 60 200 Indirect jobs in Forestry (158 400 less 60 200) = 98 200

Direct Employment in Forestry Industry by Province 2016 KZN Mpumalanga E Cape Limpopo W Cape 37.0% 9.1% 4.0% 2.6% Total 60 200 47.2%

Direct Employment in Forestry Industry by Region 2016 KZN 28 430 Total Employment 2 556 000 Mpumalanga 22 300 1 180 000 E. Cape 5 500 1 366 000 Limpopo 2 420 1 293 000 W. Cape 1 550 2 257 000 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 Number of Direct Jobs Total est. direct jobs in industry: 60 200

Direct Employment in Forestry Industry as % of Those Employed in 2016 Mpumalanga 1.89% KZN 1.11% E. Cape 0.40% RSA 0.39% Limpopo 0.19% W. Cape 0.07% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% % of Total Employed in Formal Sector Total employed in RSA: 15 545 000

Indirect Employment Created by Forestry Industry by Province 2016 KZN 44 850 Total Employment 2 556 000 Mpumalanga 31 040 1 180 000 E. Cape 7 880 1 366 000 Limpopo 9 660 1 293 000 W.Cape 4 770 2 257 000 0 10 000 20 000 30 000 40 000 50 000 60 000 Number of Indirect Jobs Total estimated indirect jobs created by industry in forestry and wood processing activities 98 200

Indirect Employment Created by Forestry Industry as % of Those Employed in 2016 Mpumalanga 2.63% KZN 1.75% Limpopo 0.75% RSA 0.63% E. Cape 0.58% W. Cape 0.21% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% % of Total Employed in Formal Sector

Direct & Indirect Jobs in & Created by Forestry Industry by Province 2016 Direct Indirect Total Employment KZN 73 290 2 556 000 Mpumalanga 53 340 1 180 000 E. Cape 13 380 1 366 000 Limpopo 12 090 1 293 000 W. Cape 6 320 2 257 000 0 20 000 40 000 60 000 80 000 100 000 Number of Jobs Estimated total 158 400 jobs

Total Employment in Industry as % of Those Employed in Formal Sector 2016 Direct Indirect Mpumalanga 4.99% KZN 4.16% E. Cape 2.21% RSA 1.02% Limpopo 0.94% W. Cape 0.28% 0% 1% 2% 3% 4% 5% 6% % of Total Employed in Formal Sector

Dependants of Those Working in Forestry Industry by Province 2016 Direct job dependents Indirect job dependants KZN 248 300 Mpumalanga 182 300 E. Cape 45 600 Limpopo 38 700 W. Cape 19 000 0 50 000 100 000 150 000 200 000 250 000 300 000 Number of Dependants Est. total 534 000 dependants

Total Number of People Dependent on Forestry Industry by Province 2016 Workers Dependents KZN 327 200 Mpumalanga 236 700 E. Cape 71 100 Limpopo 34 300 W. Cape 22 600 0 100 000 200 000 300 000 400 000 Number of People Dependent on Industry Est. total 692 000 livelihoods

Estimated % of Population Dependent on Forestry Industry 2016 Mpumalanga 5.45% Total Population 4 328 000 KZN 2.90% 11 080 000 RSA 1.24% 55 909 000 Limpopo 0.88% 7 061 000 E. Cape 0.84% 5 804 000 W. Cape 0.40% 0% 1% 2% 3% 4% 5% 6% 7% % of Provincial Population 6 293 000 Total RSA population: 55.9 million

Section 5 INVESTMENT IN THE SECTOR

Investment in RSA Forestry Industry 2016 Trees Land Roads Fixed Assets Moveable Assets 37.6% 7.9% 4.1% 1.5% Total Investment R42.9 billion 48.8%

Investment in RSA Forestry Industry 2016 Pine Long Gum Short Pine Short Wattle Gum Long 33.6% 13.1% 6.1% 1.9% Total Investment R42.9 billion 45.3%

Investment in RSA Forestry Industry 2016 Mpumalanga KZN E. Cape W. Cape Limpopo 13.3% 35.8% 4.4% 4.7% Total Investment R42.9 billion 41.8%

Mpumalanga = highest investment (41.8% of total) Investment in Plantations By Province 2016 Mpumalanga 17.925 KZN 15.390 E. Cape 5.699 Limpopo 2.029 W. Cape 1.890 0 5 10 15 20 Billion Rand

Investment in Mpumalanga Forestry 2016 Pine Long Pine Short Gum Short Gum Long Wattle 19.2% 27.8% 1.3% 2.1% Total Investment R17.9 billion 49.6%

Investment in KZN Forestry 2016 Pine Long Pine Short Gum Short Gum Long Wattle 0.2% 55.5% 14.2% Total Investment R15.4 billion 11.8% 18.2%

Investment in E. Cape Forestry 2016 Pine Long Pine Short Gum Short Gum Long Wattle 6.8% 10.8% 1.0% 0.1% 81.4% Total Investment R5.7 billion

Investment in W. Cape Forestry 2016 Pine Long Pine Short Gum Short Gum Long Wattle 97.0% Total Investment R1.9 billion 0.0% 0.2% 2.7% 0.1%

Investment in Limpopo Forestry 2016 Pine Long Pine Short Gum Short Gum Long Wattle 23.9% 0.0% 13.3% 62.7% Total Investment R2.0 billion 0.0%

Investment in Forest Products Sector by Type of Processing Plant 2016 Pulp & Board Sawmills & Veneer Other Pole Plants Mng. Timber 10.4% Total book value of investments R21.8 billion 85.2% 3.4% 0.9% 0.2%

Investment in Forest Products Sector by Investment Category 2016 Machinery & Equipment Land & Buildings Moveable Assets Other 11.9% 1.7% 2.9% Total book value of investments R21.8 billion 83.5%

Section 6 CONTRIBUTION TO GDP

Composition of RSA GDP 2016 Agric Mining Other Secondary Manufacturing Finance Other Tertiary 43.8% 2.2% 7.5% 16.2% Total GDP R3 813 billion (R3.8 trillion) 18.1% 12.1%

% Contribution to GDP Contribution to GDP 1980 to 2016 Forestry to Agric. GDP FP to Mnfg. GDP FP to total GDP 14% 12% 10% 8% 6% 4% 2% 0% 1980 1985 1990 1995 2000 2005 2010 2015 Years Increase in Forestry to Ag GDP over period from 4.5% to 10.2% Decrease in For. Prod. to Mfg GDP over period from 6.3% to 5.1%

Forest Products vs. Other Manufacturing GGP per Region 2016 100% 90% 80% 70% 60% 50% 40% 30% Forest Products Other Manufacturing 20% 10% 0% 20.0% 16.8% 16.1% 5.5% 4.1% 1.0% Limpopo Mupumlanga KZN RSA E. Cape W. Cape Province

Gross Value of Output by Sector & Province 2016 Forest Products Forestry KZN 4 835 16 033 Mupumlanga 2 830 5 980 Eastern Cape 1 279 754 Limpopo 330 1 538 Western Cape 706 239 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 Million Rands Forestry: R9.0bn Forest Products: R25.5bn

Gross Value of Output by Sector & Province 2016 Forestry Forest Products KZN 20 868 Mupumlanga 8 810 Eastern Cape 2 033 Limpopo 1 865 Western Cape 945 0 4 000 8 000 12 000 16 000 20 000 24 000 Million Rands

Forestry Industry Contribution to Agricultural GGP per Region - 2016 Mpum 37.23% KZN 22.81% E. Cape 15.39% RSA 10.83% Limpopo 5.59% W. Cape 1.32% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% % of Regional GGP

Forest Industry Contribution to Total GGP per Region - 2016 Forest Products Forestry KZN 0.79% 2.60% Mpumalanga 0.99% 2.09% RSA 0.24% 0.67% Eastern Cape 0.44% 0.26% Limpopo Western Cape 0.12% 0.14% 0.05% 0.57% 0.0% 1.0% 2.0% 3.0% % of Regional GGP

Forest Industry Contribution to Total GGP per Region - 2016 Forestry Forest Products KZN 3.39% Mpumalanga 3.08% RSA Eastern Cape Limpopo 0.91% 0.70% 0.69% Importance of forestry and forest products sector has been declining in all provinces in which it operates over a number of years. Western Cape 0.19% 0% 1% 1% 2% 2% 3% 3% 4% 4% % of Regional GGP

Section 7 CONTRIBUTION TO FOREIGN TRADE

Exports of Forest Products 2015 vs. 2016 2016 2015 Pulp 10.262 12.278 Paper 8.894 8.405 Solid Wood & Other 7.098 7.913 2015 R25.8bn 2016 R29.1bn 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Billion Rand Exports in 2016 R3.322 bn or 13% up on 2015

Imports of Forest Products 2015 vs. 2016 2016 2015 Pulp 1.556 1.378 Paper 13.132 12.342 Solid Wood & Other 5.107 4.786 2015 - R18.5bn 2016 - R19.8bn 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Billion Rand Imports in 2016 R1.290bn or 7.0% up on 2015

Billion Rand Imports vs. Exports of Forest Products Trade Balance 2015 vs. 2016 2015 2016 32 28 24 20 16 18.506 19.795 25.763 29.085 12 8 4 7.258 9.290 0 Imports Exports Trade Balance Trade balance in 2016 R2.0bn or 28% more than in 2015.

Billion Rand Imports vs. Exports of Forest Products Trade Balance 2014, 2015 & 2016 2014 2015 2016 32 28 25.763 29.085 24 20 16 19.795 18.506 16.935 22.825 12 8 5.890 7.258 9.29 4 0 Imports Exports Trade Balance

Imports vs. Exports of Forest Products 2016 Exports Imports Pulp 1.556 12.278 Paper 8.894 13.132 Solid Wood & Other 5.107 7.913 Exports R29.1bn Imports R19.8bn 0.0 5.0 10.0 15.0 Billion Rand Positive trade balance in 2016 = R9 290 billion

Forest Product Exports by Product 2016 Pulp Paper Solid Wood Other 30.6% 23.9% 3.3% Total R29.1 billion 42.2%

Forest Product Imports by Product 2016 Pulp Paper Solid Wood Other 25.7% 0.1% 7.9% Total R19.8 billion 66.3%

Billion Rand Trade Balance in Forest Products 1992 to 2016 (nominal) Imports Exports Trade Balance 35 30 25 20 Increase in imports - R18.4 billion (1 298%) Increase in exports - R26.7 billion (1 143%) Increase in trade balance - R8.4 billion (907%) 15 10 5 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Years

Billion Rand (2015 Rands) Trade Balance in Forest Products 1992 to 2016 (real) 35 30 25 20 15 10 5 0 Imports Exports Trade Balance Increase in imports - R13.6 billion (217%) Increase in exports - R18.8 billion (182%) Increase in trade balance - R 5.2 billion (128%) 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Years

Export Comparisons 2006, 2011 & 2016 2016 2011 2006 Coal 21.3 56.8 54.6 Fruit & Veg 8.2 16.8 45.4 Forest Prods 9.9 15.0 29.1 Sugar 3.6 1.7 2.7 0 10 20 30 40 50 60 70 Billion Rand

Image: Sappi Image: Sappi THANK YOU! www.forestry.co.za www.forestryexplained.co.za