1. Forestry South Africa Roundwood Sales Analysis for the 2009 Financial Year Roger Godsmark Forestry South Africa February 2010

2. Analysis of Roundwood Sales and Income Generated 2009

3. Salient Points to Note Tonnage sales of 14.261 mt were not only 638 000t below the budget of 14.9 mt but a massive 2 398 000t (14.4%) less than the corresponding figure for 2008. Sales across all species were down in comparison to 2008, the biggest decrease being attributable to eucalyptus sales which were over 1.7 mt or 19.6% down on last year. In terms of sales per product, all products saw a decline in sales as compared to 2008, the biggest decrease being attributable to pulpwood with a drop in sales of over 1.9 mt (15.5%). Year on year, the biggest decline was that of Euc Pulpwood which dropped 1.4 mt or 17.7%. Despite the levy having increased by 16.4% between 2008 & 2009 (110 cents to 128 cents per ton), total income generated of R17.85 million was actually R55 000 less than that generated the previous year. It was also over R1.2 milion (6.4%) less than that budgeted for in 2009. Overall levy coverage, as one would have expected given the depressed market conditions, decreased from 94% in 2008 to 82% in 2009 *. *Note: Caution should, however, be exercised with this comparison as it compares DWAF figures for 2007/8 with FSA’s 2009 figures. The SA Forestry Industry did not escape the ravages of the international economic crisis that came to a head in September 2008.

4. Roundwood Sales by Species 2009 Total Sales – 14 261 000 tons

5. Roundwood Sales by Product 2009 Total Sales – 14 261 000 tons

6. Pulpwood Sales by Species 2009 Total Sales – 10 559 000 tons

7. Sawlog Sales by Species 2009 Total Sales – 3 220 000 tons

8. Other Roundwood Sales by Species 2009 Total Sales – 792 000 tons

9. Sales Comparisons 2008 vs. 2009 Product20082009Diff tonsDiff % Sawlogs: Soft2 945 2282 682 158-263 070-8.9% Sawlogs: Hard276 704228 628-48 075-17.4% Sawlogs3 221 9322 910 787-311 145-9.7% Pulpwood: Soft3 433 2773 079 425-353 853-10.3% Pulpwood: Hard9 068 3407 479 602-1 588 738-17.5% Pulpwood12 501 61710 559 027-1 942 591-15.5% Mng: Timber :330 428261 206-69 222-20.9% Poles :Soft147 463116 968-30 494-20.7% Poles: Hard241 704215 490-26 214-10.8% Poles389 167332 458-56 708-14.6% Woodchips: Soft167 775165 234-2 541-1.5% Other: Hard4877932 916-15 863-32.5% Grand Total16 659 69814 261 628-2 398 070-14.4%

10. Roundwood Sales by Contributor 2009 Total Sales – 14 261 000 tons

11. Roundwood Sales per Month 2009 by Species Highest sales-March 1 433 000 t Lowest sales-July 1 036 000 t

12. Roundwood Sales per Month 2009 by Product Highest sales-March 1 433 000 t Lowest sales-July 1 036 000 t

13. Roundwood Sales per Month 2009 Budget vs. Actual Highest surplus-March 191 000 t Highest deficit-July 206 000 t

14. Contributions Generated by Contributor - 2009 Total Income Generated – R17 850 000

15. Levy Income Generated per Month 2009 Budget vs. Actual Highest Income-March R1 798 000 Lowest Income-July R1 289 000

16. Budgeted FSA Expenditure vs. Actual Levy Income - 2009 Accumulated deficit by year end - R3 907 000 (Excludes approved but unbudgeted expenditure nor attributable income)

17. Tonnage & Levy Income Comparison 2009 Budget vs. Actual 638 000 Ton Deficit R1 222 000 Deficit Tonnage @ 128 cents per ton-13 497 000 t Tonnage @ 75 cents per ton- 764 000 t

18. Roundwood Sales Comparisons 2007/08 DWAF vs. 2009 FSA by Species Sales ex Plantations 2007/08 (DWAF) - 17.5 m tons FSA based sales 2009 - 14.3 m tons 93% of DWAF 66% of DWAF 156% of DWAF Overall coverage 82% (94% last yr)

19. Roundwood Sales Comparisons 2007/08 DWAF vs. 2009 FSA by Product 97% of DWAF 54% of DWAF 61% of DWAF 94% of DWAF 85% of DWAF Sales ex Plantations 2007/08 (DWAF) - 17.5 m tons FSA based sales 2009 - 14.3 m tons

20. Analysis of Roundwood Sales and Income Generated 2002 - 2009

21. Roundwood Sales per Year 2002 - 2009 Lower levy excludes a contribution to the ICFR

22. Sales Comparisons per Species 2002 - 2009

23. Roundwood Sales 2002 - 2009 Eucalyptus

24. Roundwood Sales 2002 - 2009 Softwood

25. Roundwood Sales 2002 - 2009 Wattle

26. Roundwood Sale Comparisons per Species 2008 vs. 2009 Down 205 000t - 14.6% Down 1 711 000t -19.6% Down 483 000t - 7.4% Overall decrease of 2 398 000t or 14.4%

27. Sales Comparisons per Product 2002 - 2009 Pulpwood growth over period+ 238 000 tons + 2.3% Sawlog decline over period- 376 000 tons - 11.4% MT & Other growth over period + 95 000 tons +13.6%

28. Roundwood Sales 2002 - 2009 Pulpwood

29. Roundwood Sales 2002 - 2009 Sawlogs

30. Roundwood Sales 2002 - 2009 Mining Timber & Other

31. Roundwood Sale Comparisons per Product 2008 vs. 2009 Down 144 000t -15.4% Down 1 943 000t -15.5% Down 311 000t - 9.7% Overall decrease of 2 398 000t or 14.4%

32. Levy Income Generated per Year 2002 - 2009 Levy income in 2009 actually R55 000 less than in 2008 and R1 222 000 under budget

33. Sales Tonnage per Contributor 2008 vs. 2009 Down 1 759 000t -13.0% Up 2 000t +09% Down 641 000t -22.4% Overall decrease of 2 398 000t or 14.4%

34. Income Generation per Contributor 2008 vs. 2009 Up R196 000 +1.3% Up R55 000 +26.1% Down R306 000 -9.7% Overall decrease of R55 000 or 0.3%