• Out of the woods

    As an agribusiness that has the power to change lives on the continent, create jobs and drive economic growth, the forestry sector holds massive potential.

    Out of the woods

    ‘Amazing! We’re very happy. Things are going well. You won’t believe the change in people’s attitudes around here.’ A beaming Moses Ntombela is proud of his community. As chairperson of the kwaZiqongwana Community Trust, which runs a forestry business on 4 920 ha of land in Babanago, Zululand, he has seen the trust come to symbolise a successful land-claims resolution.

    When the kwaZiqongwana community took ownership of the estate in 2010, it had no experience of running a forestry operation, and so entered into a post-settlement agreement with its existing owner, international packaging and paper group Mondi. The group would lease the land and manage the forestry operations for 20 years, paying an annual rental and a stumpage fee based on the annual timber harvest.

    The company would also provide empowerment and support services that would enable the community – operating as Makhwetha Trading – to participate in the forestry operations. At the end of the lease period, the community should be in a position to manage the estate on their own and drive their own development.

    The issue of land claims has been put forward as an obstacle to expanding South Africa’s forestry industry but models such as this illustrate just how effective the forestry industry can be in driving growth and development in rural communities. This is just one of many of a growing number of commercial forestry enterprises owned and controlled by local rural communities in South Africa.

    However, it’s not just empowering, inclusive models that are starting to distinguish forestry in South Africa. It is also a sector with a strong social conscience.

    The South African Forestry Company – whose Komatiland Forests are the biggest industry employers and commercial plantation operators – reportedly spends more than ZAR22 million on CSR each year, with the focus on building schools, as well as priority areas identified by communities.

    Paper giant Sappi has strong links with numerous small growers through its Project Grow programme. This is a tree-farming scheme that initially focused on supporting subsistence farmers in South Africa who had access to 1 ha to 20 ha of land on which to grow trees. It has since expanded to include community forestry projects and forestry projects handed to land-reform beneficiaries.

    For its part, Mondi South Africa’s development arm, Mondi Zimele, is supporting and mentoring communities. It aims to encourage job creation and local economic development through the support of small businesses in surrounding communities, develop sustainable small businesses in its forestry value chain, and facilitate the increased availability of sustainable fibre for Mondi mills from private growers, with the emphasis on new community forestry businesses.

    The 14th World Forestry Congress – aptly themed Forests and People: Investing in a Sustainable Future – was held in Africa in September this year. There’s massive symbolic importance to this at a time when the world’s forests are being decimated by global warming and deforestation – and Africa is among the biggest culprits.

    According to the UN’s Food and Agriculture Organisation, about 3.4 million ha of tropical forest were lost annually in Africa between 2000 and 2010 because of illegal logging and other unsustainable practices in the forest sector. This accounts for approximately 26% of global forest loss.

    Though forests across the continent are under increasing pressure because of mining, logging, unsustainable agricultural expansion and climate change, solutions do exist. Africa offers major opportunities for restoration, with many examples of best practice already existing on the continent.

    There is no doubt that forestry is a key driver of the development of South Africa’s local economies, particularly in rural areas where poverty is compounded by a lack of employment opportunities.

    The Industrial Development Corporation reports that while the sector contributes only a modest 1% to the GDP, it is a crucial player in rural areas, both through the establishment of new plantations as well as the secondary processing and value-add industries resulting from increased timber resources.

    Forestry is a key driver of the development of South Africa’s local economies, particularly in rural areas

    The industry employs approximately 165 000 people, of which 92 700 jobs are attributed to the forestry sector in particular. Sawmilling, mining timber, pulp and paper and other related industries account for the remaining 72 300 jobs, according to Forestry South Africa (FSA).

    It’s the organic effect that is so effective, though, says FSA’s operations director Roger Godsmark. ‘While this number is directly involved in this industry, forestry also drives a whole series of other industries, processing industries, so we are looking at considerably more than that.’

    The biggest block to the sector is the fact that it has reached its peak in terms of geographic growth potential. Areas of commercial forestry plantations have been declining for 20 years. Owing to this limited footprint, efforts are now focused on innovations and making current operations more efficient, says Godsmark.

    This takes place through growing (new tree species) and processing (extracting more from mills, for example, so as to increase their efficiency).

    Experts say the barriers to entry into the commercial forestry are issues around land reform, environmental impact assessments and water licences, high staff turnover and scarce skills.

    Brian Aitken, former chairman of FSA, MD of family-owned Manzini Estate and chairman of Mozambique Tree Farming Group, also points to the issue of restrictive labour legation in South Africa – which has a stifling effect – as a hindrance to expansion. He believes that the potential growth in South Africa will come – and is coming – from small-scale community operators.

    Right now though, wearing his hat as chairman of the Mozambique Tree Farming Group, he’s also looking to Mozambique for growth. And he’s not alone.

    The NGO World Rainforest Movement (WRM) reports that Mozambique has been targeted by investors in Europe and the US (as well as South Africa) wanting to increase the acreage of industrial monoculture tree plantations in Mozambique.

    To guide investors, notes WRM, the Finnish forestry consulting firm Pöyry noted that there is growing interest in investing in Africa due to the availability of land, relatively low labour costs and fast rates of tree growth.

    Tree plantations in Africa could help meet the growing demand for biomass as an energy source in Europe, to supply the pulpwood and timber markets in Asia, and to develop local markets, it adds.

    Niassa is one of the Mozambican provinces that has attracted the most interest for the expansion of industrial tree plantations in recent years. Some companies have come under fire as their expansion of pine and eucalyptus plantations in the region has reportedly resulted in various negative impacts, particularly land conflicts with impoverished local communities.

    Illegal logging is also a massive problem in Mozambique, with forests being stripped to feed an insatiable demand in Asia. According to the British Environmental Investigation Agency, Mozambique has lost about EUR113 million in tax revenues since 2007 because of illegal timber exports – ‘money that could have financed Mozambique’s national forest programmes for 30 years’.

    As most of the continent’s commercial plantations are government-owned, it seems there is plenty of opportunity to establish privately owned ones.

    A company that is tapping into this in a big way is New Forest Company (NFC). Currently operating in Mozambique, Tanzania, Uganda and Rwanda, the company has reportedly created approximately 2 500 jobs and invested more than US$85 million in the development of plantations.

    One of its key aims is to improve the lives of its workers. To that end, it announced recently that it would double the wages of its lowest-paid workers over the next five years. NFC sells poles for use in the countries’ large-scale electrification projects. The company has built its own pole processing and treatment plants, and is currently building sawmills in all countries, to process timber into planks and added-value products such as pallets.

    Tanzania’s village forest reserves are also a model of best practice. According to forestry analyst Juliette Clarke, reporting on the country’s forestry model for SA Forestry Magazine, Tanzania is unique in Southern and East Africa in having a legal and administrative basis for full village ownership and control of land and forests.

    Unlike rural villages elsewhere in Africa, Tanzanian villages can register and form corporate entities through elected village councils. Registered villages can take transfer of village land, forests and other assets and start commercial enterprises.

    The evidence for a thriving continent-wide forestry industry is glaring: there is land, there are global markets, and Africa offers some smart solutions to uplifting and empowering its people – sustainably.

    By Tracy Melass
    Image: Kim Thunder/Independent Contributors/Africa Media Online