FORESTRY SOUTH AFRICA | AGM | 6 MAY 2009
OUTLINE
Historical Context Opportunity
Stakeholders and Players Goal Obstacles Solutions Call to action
OWNERSHIP AND CONTROL
Hans Merensky 15 000 ha PG Bison 35 000 ha
Amathole 15 000 ha
Hans Merensky 15 000 ha
DWAF 30 000 ha MTO 30 000 ha
CONTROL OF PLANTATIONS
Total Area: 129 334 ha hectares 35000 30000 25000 20000 15000 10000 5000 0
Private
State
REVENUES AND PROVINCIAL SPEND
Local Spend
R millions
1000 800 600 400 200 0 Revenue
Wages
Costs @20%
HISTORICAL CONTEXT
‘000 ha 150
???
130
NECF
110 90 70 50 30 10
Beginning of State Plantations & Woodlots
FORESTRY POTENTIAL
1994
2007
THE OPPORTUNITIES
Plantations (hectares)
Production (000 cubic m/a)
1180 100 000 1500 130 000
Existing • 66 wood processors • 8000 employed • Revenues of R900m/a
770
Optimisation • 1.5 X more wood • Spike in new jobs
Potential • 80% more plantations • 1.8 X more wood • 4000 new direct forestry jobs
THE GOALS 100 000 ha new plantations
30 000 ha rehabilitated
Value-add where possible
Optimization of processing
IMPLEMENTATION PLANS
hectares 110000 100000
Identification
90000
Scoping
80000
Resourcing Establishment
70000 60000 50000
40000 30000 20000 10000
0 2010
2015
2020
2025
STAKEHOLDERS AND PLAYERS
DWAF DTI
Private Sector DLA Municipalities
Service Providers Research, Education Institutions Traditional Leadership DFIs
ASGISA EC ROLE
• • • •
Identifying and addressing blockages Providing and leveraging of funding Facilitation of 3rd party involvement and support Provision of support to govt departments, communities
ASGISA EC OPERATING PRINCIPLES
Principle
Comments
Best practice, optimal ROIs
• Commerically viable, sustainable projects • Scale >300 ha, depending on context
Transparency to land beneficiaries
• Clear, written project descriptions
Maximize benefits to land beneficiaries
• I.t.o ownership, profit-share, empowerment, employment • KEY to Risk Management
Maximize independence of growers
• Market commitment, management • KEY to empowerment, ownership
Mitigate against weaknesses/gaps
• Finance, management and technical support • KEY to Best practice, ROIs
Facilitate support from 3rd parties: – empowering local people – ensuring returns to 3rd parties – by way of formal, negotiated agreements
• Depending on project requirements • Should be open, fair and worthwhile to both parties
ASGISA EC PROJECT MODEL
Community Trust
Strategic Partner
Where necessary ASGISA
Shareholding IDC ASGISA DBSA
Funding
Community Project
Management
Community
StratPartner DWAF
Product Market Dedicated
1st Refusal
Strategic Partner
Free ASGISA
OBSTACLES, ISSUES AND SOLUTIONS
Funding Licensing
Communal Tenure Skills & Capacity
FUNDING
R3-5 Billion High risk for investors
Funding
State funding sources • IDC, DWAF, AsgiSA
LICENSING
Still relatively new Criteria unclear Capacity of Authorities Volume of applications Lack of data
Licensing
DWAF galvanizing FSA/DWAF/AsgiSA teaming Pre-emptive screening Class assessments
COMMUNAL TENURE
Unfamiliar for sector Management mindsets Process intensive Temptation of shortcuts
Communal Tenure
Widespread interest Forestry Protocols Co role reviews Government principles Most NB Risk Mitigation
SKILLS & CAPACITY
Community readiness National capacity drain Fragmented distribution Economies of scale
Skills & Capacity
3rd party support Sector interest high Latent/hidden expertise Support/control balance Formal training
CALL TO ACTION
• Funders - go the distance • Licensing Authorities – Maintain the efforts at facilitating, reduce the obstacles • Promoters – Get serious about empowering • 3rd parties – Register your interest, flush out people with experience