The South African Forestry and Forest Products Industry 2011 Produced By Roger Godsmark Forestry South Africa, February 2013

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 Total RSA land area – 122.3 million ha

Total Mpum. land area – 8.2 million ha (6.7% of total) Land Use in Mpumalanga 518 994 ha Total Mpum. land area – 8.2 million ha (6.7% of total)

Land Use in KwaZulu Natal 503 212 ha Total KZN land area – 9.1 million ha (7.5% of total)

Land Use in the Eastern Cape 141 413 ha Total E. Cape land area – 17.1 million ha (13.9% of total)

Land Use in the Western Cape 61 455 ha Total W. Cape land area – 12.9 million ha (10.6% of total)

Total Limpopo land area – 12.0 million ha (9.8% of total) Land Use in Limpopo 48 284ha Total Limpopo land area – 12.0 million ha (9.8% of total)

Plantation Area as % of Land Area by Province

Drop in Forestry Area – 79 000 ha (5.8%) Land Use Comparisons 2001, 2006 & 2011 Drop in Forestry Area – 79 000 ha (5.8%)

Plantation Area Comparisons 2011

Section 2 The Forestry Industry

Plantation Area by Species 2011 Total – 1 273 357 ha

Plantation Area by Ownership 2011 Total – 1 273 357 ha

Plantation Area by Province 2011 Total – 1 273 357 ha

Plantation Area by Province and Genera 2011 Total – 650 898 ha (softwood) Total – 622 468 ha (hardwood)

Planted Area Comparisons by Province & Species 2011

Pine Plantation Area by Province 2011 Total – 650 898 ha (51.1% of total)

Eucalyptus Plantation Area by Region 2011 Total – 516 638 ha (40.4% of total)

Wattle Plantation Area by Region 2011 Total – 106 600 ha (7.9% of total)

Other Hardwood Plantation Area by Region 2011 Total – 5 216 ha (0.4% of total)

Plantation Area by Management Objectives 2011 Total – 1 273 357 ha

Softwood Plantation Area by Management Objectives 2011 Total – 650 898 ha

Hardwood Plantation Area by Management Objectives 2011 Total – 622 460 ha

Plantation Area by Province and Ownership 2011 Leased Safcol packages included in “Private” KLF included in “Public” Total Private – 1 057 279 ha (83.0%) Total Public – 216 078 ha (17.0%)

Percentage Plantation Ownership by Province 2011 Total Private – 1 057 279 ha (83.0%) Total Public – 216 078 ha (17.0%)

Plantation Area by Species and Ownership 2011 Total Private – 1 057 279 ha (83.0%) Total Public – 216 078 ha (17.0%)

Percentage Plantation Ownership by Species 2011 Total Private – 1 057 279 ha (83.0%) Total Public – 216 078 ha (17.0%)

Planted Area Comparisons by Province & Product 2011

Roundwood Production by Product 2011 Total – 7.6 million m3 / 7.8mt (softwood) Total – 10.9 million m3 / 8.2mt (hardwood)

Roundwood Production by Province and Genera 2011 Total – 7.6 million m3 / 7.8mt (softwood) Total – 10.9 million m3 / 8.2mt (hardwood)

Roundwood Production by Province and Genera 2011 9.975 6.208 1.353 0.578 0.403 Total – 7.6 million m3 / 7.8mt (softwood) Total – 10.9 million m3 / 8.2mt (hardwood)

Roundwood Production ex Plantations by Province & Product 2011 Total – 18.5 million m3 or 16.0 million tons

Roundwood Production ex Plantations by Province & Product 2011 Total – 18.5 million m3 or 16.0 million tons

Total Roundwood Production ex Plantations by Province 2011 Total – 18.5 million m3 or 16.0 million tons

Total Roundwood Production ex Plantations by Product 2011 Total – 18.5 million m3 or 16.0 million tons

Softwood Roundwood Production ex Plantations by Product 2011 Total – 7.6 million m3 or 7.8 million tons

Hardwood Roundwood Production ex Plantations by Product 2011 Total – 10.9 million m3 or 8.2 million tons

Total Roundwood Production ex Plantations by Species 2011 Total – 18.5 million m3 or 16.0 million tons

Composition of Roundwood Production by Product 2011

Total Plantation Area 1980 to 2011 244 780 ha decrease 111 950 ha increase Total increase in afforested area over period : 111 950 ha Total % increase in afforested area over period : 9.6%

Total Roundwood Production ex Plantations 1980 to 2011 Total increase in production over period : 55.9% Total in increase in afforested area over period : 9.6%

Roundwood Production vs. Plantation Area 1980 to 2011 Total increase in production over period : 55.9% Total in increase in afforested area over period : 9.6%

Average Productivity per Hectare 1980 - 2011 Total increase in productivity over period – 4.3 m3 per ha p.a. (42%)

Production Comparisons 2001, 2006 & 2011

Value of Roundwood Production 2011 Total – R7.0 billion

Value of Roundwood Production ex Plantations by Product 2011 Total – R7 012 million

Value of Roundwood Production ex Plantations by Province 2011 Total – R7 012 million

Value of Roundwood Production ex Plantations by Province & Product 2011 Total – R7 012 million

Value of Roundwood Production ex Plantations by Province & Product 2011 Total – R7 012 million

Value of Roundwood Production 1980 to 2011 Nominal increase over period : R6.8 bn (4 157%) Real increase over period : R4.1 bn (138%)

New Afforestation by Region 1980 to 2011 AVERAGE New afforestation over period - 385 511 ha Average per year - 12 047 ha

Total New Afforestation by Region 1980 to 2011 Total – 385 511 ha

Total New Afforestation by Region 10 Yr Period - 2002 to 2011 Total – 34 223 ha

New Afforestation by Region 10 Year Period – 2002 to 2011 AVERAGE New afforestation over period - 34 223 ha Average per year - 3 422 ha

New Afforestation by Province 2011 Total – 1 573 ha

New Afforestation by Species 1980 to 2011 Average p.a. 1980 to 1985 - 10 974 ha (17.1% of total) Average p.a. 1986 to 1990 - 24 558 ha (31.9% of total) Average p.a. 1991 to 1995 - 24 406 ha (31.7% of total)

Total New Afforestation by Species 1980 to 2011 Total – 385 511 ha

New Afforestation by Species 2011 Total – 1 573 ha

New Afforestation by Product 1980 to 2011 Average p.a. 1996 to 2000 - 7 019 ha (9.1% of total) Average p.a. 2001 to 2005 - 5 044 ha (6.5% of total) Average p.a. 2006 to 2011 - 2 910 ha (3.8% of total)

Total New Afforestation by Product 1980 to 2011 Total – 385 511 ha

New Afforestation by Product 2011 Total – 1 573 ha

Area Converted Out of Timber Production by Species 1980 to 2011 Area converted over period - 90 383 ha Average p.a. - 2 824 ha

Area Converted Out of Timber Production by Species 2002 to 2011 Area converted over period - 21 126 ha Average p.a. - 2 112 ha

Total Area Converted out of Timber Production by Species 1980 to 2011 Total – 90 383 ha

Total Area Converted out of Timber Production by Species 2011 Total – 554 ha

Net New Afforestation by Species 1980 to 2011 Net new afforestation over period - 295 123 ha Average p.a. - 9 223 ha

Net New Afforestation by Species 2002 to 2011 Net new afforestation over period - 13 095 ha Average p.a. - 1 310 ha

Net New Afforestation by Species 1980 to 2011 Total – 295 123 ha

Net New Afforestation by Species 2011 Total net new afforestation - 1 019 ha

Area Converted Out of Timber Production by Region 1980 to 2011 Area converted over period - 90 383 ha Average p.a. - 2 824 ha

Area Converted Out of Timber Production by Region 2002 to 2011 Area converted over period - 21 129 ha Average p.a. - 2 113 ha

Total Area Converted out of Timber Production by Region 1980 to 2011 Total – 90 383 ha

Net New Afforestation by Region 1980 to 2011 Net new afforestation over period - 295 124 ha Average p.a. - 9 223 ha

Net New Afforestation by Region 2002 to 2011 Net new afforestation over period - 13 094 ha Average p.a. - 1 309 ha

Net New Afforestation by Region 1980 to 2011 Total – 295 124 ha

Conversion of Plantations out of Production & to Other Species 1980 to 2011 Net loss to production area over period - 90 383 ha Average p.a. - 2 824 ha

Conversion of Plantations out of Production & to Other Species 2002 to 2011 Net loss to production area over period - 21 129 ha Average p.a. - 2 113 ha

Total Area Converted out of Production & to Other Species 1980 to 2011 Net loss to production area over period - 90 383 ha Average p.a. - 2 824 ha

Area Converted out of Production & to Other Species 2009 Land taken out of timber production - 554 ha

Net Addition to Planted Area by Species 1980 to 2011 Total net addition to production area - 295 123 ha Average p.a. - 9 223 ha

Net Addition to Planted Area by Species 2002 to 2011 Total net addition to production area - 13 094 ha Average p.a. - 1 309 ha

Total Net Addition to Planted Area by Species 1980 to 2011 Total net addition to production area - 295 124 ha Average p.a. - 9 223 ha

Net Addition (Loss) to Planted Area by Species 2011 Total net gain in production area Plus 1 019 ha

Damage to Plantations by Genera 1980 to 2011 Total area damaged over period - 994 008 ha Average p.a. - 31 063 ha

Damage to Plantations by Fires 1980 to 2011 Total area damaged over period - 994 008 ha Total area damaged by fire - 579 728 ha (58%) Total area damaged by other causes - 414 280 ha (42%)

Damage to Plantations by Fires 2002 to 2011 Total area damaged over period - 448 379 ha Total area damaged by fire - 317 850 ha (71%) Total area damaged by other causes - 130 529 ha (29%)

Damage to Plantations by Fires 1980 to 2011

Damage to Plantations by Genera 2011 Total – 40 178 ha (3.2% of total planted area)

Damage to Plantations by Cause 2011 Total – 40 178 ha

Damage to Plantations by Fire 2011 Total – 15 348 ha

FSC Certificates RSA vs. Africa: as at February 2013 of African Total RSA 43% of African Total RSA FMU certificates cover 1.5 million hectares or 21% of African total coverage of 7.2 million hectares

FSC Certified Forests by Ownership: as at February 2013 Certified Area – 1 511 739 ha (incl. planted & non-planted areas)

The Forest Products Industry Section 3 The Forest Products Industry

Number of Processing Plants by Type 2011 Total number of plants: 159

Intake of Roundwood into Processing Plants 1980 to 2011 Total increase in intake over period - 7.5 million m3 (67%) Biggest increase that of pulpwood - 8.9 million m3 (211%)

Intake of Roundwood into Processing Plants 2011 Total – 18.6 million m3

Roundwood Intake into Processing Plants by Province & Product 2011 Total – 18.6 million m3

Roundwood Intake into Processing Plants by Province & Product 2011 Total – 18.6 million m3

Average Size of Plant by Intake 1980 vs. 2011 Overall average intake has increased by: - 154% Average intake of PP & Board Mills has increased by: - 107% Only average intake of MT Mills has declined – by - 13%

Sales of Certain Products from Processing Plants 1980 to 2011 Biggest increase that of chips - 2.5 million tons (471%) Biggest decrease that of mining timber - 1.2 million tons (-77%)

Value of Sales from Primary Processing Plants 2011 Total – R21.4 billion

Value of Sales from Primary Processing Plants 2011 Total – R21.4 billion

Value of Sales from Primary Processing Plants 1980 to 2011 Nominal increase over period - R20.7 bn (2 971%) Real increase over period - R9.0 bn (72%)

Value of Roundwood Sales from Processing Plants by Product & Province 2011 Total – R21.4 billion

Value of Roundwood Sales from Processing Plants by Product & Province 2011 Total – R21.4 billion

Gross Value of Output Comparisons 2001, 2006 & 2011

Gross Value of Output Comparisons per Planted Hectare 2001, 2006 & 2011

Value Addition in Primary Processing Industry 2011 Note : excludes secondary processing (e.g. paper manufacturing)

Value Addition Comparisons in Primary Processing Industry 2011 Note : Based only on input value of raw fibre (i.e. excludes all other input costs)

Contribution to Employment Section 4 Contribution to Employment

Forest Sector Employment – RSA 2011 Sub-sector No. of employees Total Employment Direct Indirect Forestry 62,700 30,000 92,700 Pulp and Paper 13,200 10,800 24,000 Sawmilling 20,000 10,000 Timber Board 6,000 n/a Mining Timber 2,200 Other 11,000 Total 115,100 50,800 165,900 Direct jobs in Forestry = 62 700 Indirect jobs in Forestry (165 900 less 62 700) = 103 200

Direct Employment in Forestry Industry by Province 2011 Total – 62 700

Direct Employment in Forestry Industry by Region 2011 Total Employment 2 520 000 953 000 1 298 000 1 018 000 1 815 000 Total estimated direct jobs in Industry – 62 700

Direct Employment in Forestry Industry as % of Those Employed in 2011 Total employed in RSA – 13 447 000

Indirect Employment in Forestry Industry by Province 2011 Total Employment 2 520 000 953 000 1 298 000 1 018 000 1 815 000 Total estimated indirect jobs created by Industry – 103 200

Total employed in Mpumalanga – 953 000 Indirect Employment in Forestry Industry as % of Those Employed in 2011 Total employed in Mpumalanga – 953 000

Direct & Indirect Jobs in Forestry Industry by Province 2011 Total Employment 2 520 000 953 000 1 298 000 1 018 000 1 815 000 Estimated total – 165 900 jobs

Total Employment in Industry as % of Those Employed in Formal Sector 2011

Dependents of Those Working in Forestry Industry by Province 2011 25 000 Estimated total – 558 000 dependents

Total Number of People Dependent on Forestry Industry by Province 2011 Estimated total – 652 000 livelihoods

Estimated % of Population Dependent on Forestry Industry 2011 Total Population 4 040 000 10 267 000 51 771 000 6 562 000 5 405 000 5 823 000 Total RSA population – 51.8 million

Section 5 Investment in Sector

Investment in RSA Forestry Industry 2011 Total Investment - R25.6 Billion

Investment in RSA Forestry Industry 2011 Total Investment - R25.6 Billion

Investment in RSA Forestry Industry 2011 Total Investment - R25.6 Billion

Investment in Plantations – By Province 2011 Mpumalanga has highest investment - 42% of total

Investment in Mpumalanga Forestry 2011 Total Investment - R10.7 Billion

Investment in KZN Forestry 2011 Total Investment - R9.0 Billion

Investment in E. Cape Forestry 2011 Total Investment - R3.3 Billion

Investment in W. Cape Forestry 2011 Total Investment - R1.5 Billion

Investment in Limpopo Forestry 2011 Total Investment - R1.1 Billion

Investment in Forest Products Sector by Type of Processing Plant 2011 Total Book Value of Investments - R15.2 Billion

Investment in Forest Products Sector by Investment Category 2011 Total Book Value of Investments - R15.2 Billion

Section 6 Contribution to GDP

Total GDP – R2 661 Billion (i.e. R2.7 Trillion) Composition of RSA GDP 2011 Total GDP – R2 661 Billion (i.e. R2.7 Trillion)

Contribution to GDP 1980 to 2011 Increase in Forestry to Ag GDP over period from 4.5% to 12.3% Decrease in For. Prod. To Mfg GDP over period from 6.3% to 6.2%

Forestry vs. Other Agricultural GGP per Region 2011 Forestry in Mpumalanga of major importance

Forest Products vs. Other Manufacturing GGP per Region 2011

Gross Value of Output by Sector & Province 2011

Gross Value of Output by Sector & Province 2011

Forest Industry Contribution to Total GGP per Region - 2011

Forest Industry Contribution to Total GGP per Region - 2011

Contribution to Foreign Trade Section 7 Contribution to Foreign Trade

Exports of Forest Products 2012 vs.2011 - R15.0bn - R13.8bn Exports in 2012 R1.2 bn or 7.7% down on 2011

Imports of Forest Products 2012 vs. 2011 - R10.5bn - R11.6bn Imports in 2012 R1.1 bn or 10.4% up on 2011

Imports vs. Exports of Forest Products Trade Balance 2012 vs. 2011 Trade balance in 2012 R2.2bn or 50% less than in 2011

Imports vs. Exports of Forest Products 2012 Exports R13.8bn Imports R11.6bn Positive trade balance in 2012 = R2.21 billion

Forest Product Exports 2012 Total – R13.8 billion

Forest Product Imports 2012 Total – R11.6 billion

Trade Balance in Forest Products 1992 to 2012 (nominal) Increase in imports - R10.2 billion (720%) Increase in exports - R11.5 billion (491%) Increase in trade balance - R1.3 billion (140%)

Trade Balance in Forest Products 1992 to 2012 (real) Increase in imports - R6.6 billion (131%) Increase in exports - R5.5 billion (66%) Decrease in trade balance - R1.1 billion (-33%)

Export Comparisons 2002, 2007 & 2012