http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.38Change: 0.05
R/$ = 11.57Change: -0.03
Au 1276.24 $/ozChange: -2.53
Pt 1262.50 $/ozChange: -7.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Aug 23, 2012

Safcol pins hopes on new business model to unlock R3bn project pipeline

Back
Africa|CoAL|Environment|Eskom|Housing|PROJECT|Public Enterprises|SAFCOL|Sustainable|Africa|Mozambique|South Africa|Stellenbosch University|Energy|Komatiland Forests|Maureen Manyama-Matome|Power
Africa|CoAL|Environment|Eskom|Housing|PROJECT|Sustainable|Africa|||Energy||Power
africa-company|coal|environment|eskom|housing|project|public-enterprises|safcol|sustainable|africa|mozambique|south-africa|stellenbosch-university-facility|energy|komatiland-forests-natural-feature|maureen-manyama-matome|power
© Reuse this



Stated-owned forestry company Safcol, which improved its financial performance in 2011/12 on the back of a recovery in lumber markets, expects to complete a review into its future role and structure by September, which could open the way for it to again invest in sawmilling and extend its Southern African portfolio.

The company has earmarked potential investment worth R3-billion, but currently does not have the mandate, nor the financial wherewithal to implement them.

However, the group’s shareholder Minister, Public Enterprises’ Malusi Gigaba, stressed that privatisation was not an option being contemplated by the review, which was being conducted by the Stellenbosch University.

Instead, it would interrogate the economic impact of allowing Safcol to pursue a strategy of vertical integration – a strategy from which it was instructed by a Cabinet memo in 2007 to desist, after its Komatiland Forests were earmarked for privatisation.

The analysis would seek to understand the potential impact such a strategy would have on the competitive environment, as well as on job creation and the potential for downstream economic spinoffs.

It is understood that the plan would also be canvassed with South Africa’s competition authorities and other stakeholders.

Safcol, which comprises 18 plantations covering 187 320 ha, currently has one sawmill and rents capacity at two others. It is also an 80% shareholder in Industrias Florestias de Manica (Ifloma), in the Manica province of Mozambique.

“Once we have received the review, we will then take a decision,” Gigaba said, adding that every effort would be made to ensure that the decision did not “impair competitive business activities within this sector”.

The objective was to use Safcol to meet government’s stated economic and development objectives, including further regional integration.

Therefore, under the new structure, emphasis was likely to be given to Safcol’s role within the region, both as an investor and as a competent manger of forestry assets.

Besides Ifloma, which had growth potential, Safcol had also been awarded forest assets management contracts in the region and it planned to pursue further such opportunities.

Various funding options would be considered to enable Safcol to make its growth-supporting investments, which could not depend only on fiscal support.

Acting CEO Maureen Manyama-Matome indicated the group had undergone far-reaching restructuring and reorganisation in 2011/12, in a bid to reduce costs and increase efficiencies.

The group, which made losses in 2009/10 and 2010/11, reported an accounting profit of R209-million in 2011/12, on the back of a 22% rise in revenue to R862-million. Its full results would be published in its annual report, which is due for release in September.

However, Manyama-Matome argued that vertical integration was necessary for the group to be placed on a more sustainable growth path.

The company, which would be led in future by Nomkhita Mona, was also keen to pursue green-energy investments and was in advanced discussions with Eskom about the potential of supplying biomass for co-firing in the power utility’s coal-fired power stations.

It also saw growth prospects in the promotion of timber-frame housing and forestry expansion.

However, 61% of Safcol’s land was also currently under land claim and Gigaba indicated that the group would need to review its business model to include potential new landowners to “ensure continuity, development and an inclusive partnership”.

He said prevailing land ownership uncertainty had already resulted in a decrease in land under forestry to around 9.1%.
 

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Agriculture News
Former South African Finance Minister Trevor Manuel
SABMiller chairperson John Manser expects Trevor Manuel’s experience in advising multilateral organisations on emerging market development and sustainability to be a “great asset” to the soft drinks and brewing giant’s board. The JSE-listed company announced on...
GIRTH GEARS Girth gears are used to drive large, rotating systems such as dryers, rotary kilns or horizontal mills
A flexible range of girth gears, used to assist with the transfer of drive torque from a gear motor to a rotary cylinder, has been developed by drive engineering company SEW-Eurodrive.
Kenya’s raw sugar production is expected to rise 4% to 617,039 tonnes in 2015, buoyed by extra factory capacity and improved supply of cane, the industry regulator said on Wednesday. East Africa's biggest economy has an annual sugar deficit of around 200 000 tonnes,...
Article contains comments
More
 
 
Latest News
Temporary power generation services provider Aggreko has extended the contract for its 200 MW gas-fired power project in Côte d'Ivoire by three years, with the option to extend this by a further two years.
Jeffrey Immelt
Troubled South African State power utility Eskom should place emphasis on stability ahead of improvement, GE chairperson and CEO Jeffrey Immelt suggested on Monday. Speaking at the Gordon Institute of Business Science (GIBS) in Johannesburg, the head of the...
A Competition Tribunal hearing into alleged cartel activity and price-fixing by several companies in the wire and wire products manufacturing industry was again postponed on Monday pending a decision by the Competition Appeal Court (CAC). Respondents Allens Meshco,...
More
 
 
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
 
 
 
 
 
This Week's Magazine
BRUCE BRADFORD The 3D printers have a clear upgrade path to eventually print in wood, ceramics and metal-alloys
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks