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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


AsgiSA EC forestry presentation to Forestry SA