Timber iQ August - September 2019 // Issue:45 | Page 40

FEATURES
themselves don’t have the necessary technical knowledge
required to successfully run the operation.
Paine explains that the general state of the economy had
been problematic in the past decade. “The banks have also
been very hesitant to lend money for housing bonds.
Legislation and general bureaucracy are also a huge issue, from
labour laws to NHBRC and BIBC compliance,” he adds.
According to Paine, another challenge is the approval of plans
through council with new zoning and energy regulations.
“Within timber frame specifically you still get some ignorance
about the method of construction and materials used from
potential clients and some junior or less experienced staff in
the banking and insurance fields.”
Some of the afore-mentioned challenges fall within the
macro-economic environment, which means there is little to
nothing that timber operations can do to control them. From an
economic point of view, Paine explains that the company has to
work extra hard to ensure that they offer better services than
their competitors. “I think our reputation has helped us a lot in
this regard. We have also expanded to take on a greater variety
of jobs including more additions and alterations,” he says.
“There is not much that we can do about the banks’
reluctance to give bonds, and for a while we only built for cash
clients.” The situation seems to be improving. “Now the banks
are starting to open up a bit more and there is even a bit of
competition between them on interest rates,” Paine adds.
Dobson believes that cooperative marketing can assist
small-scale timber operations. “Look into the history of the
formation of NCT for example, and their very successful export
contract with the Japanese,” he says.
ASSISTANCE FOR SMALL-SCALE TIMBER
OPERATIONS
The timber industry falls under the Department of Agriculture,
Forestry and Fisheries (DAFF), and to assist small-scale timber
operators, the department has established the Forestry
Enterprise Development (FED) programme. The aim of the FED
programme is to create opportunities for people to utilise
forests (indigenous forests, woodlands and plantations), and
forest-based resources for economic growth, income
generation and job creation in a manner that will take people
from a subsistence livelihood system into the market economy.
Included in the FED programme are two sub-programmes,
namely, afforestation and timber production and processing
(TPP). Afforestation focuses on afforestation activities
particularly in the KwaZulu-Natal (KZN) and Eastern Cape (EC)
provinces. The estimated land suitable for new afforestation is
approximately 100 000 ha in the EC and 40 000 in KZN. This
sub-programme will seek to ensure that enterprise
development takes place in accordance with the undertakings
of the forestry BBBEE.
The TTP sub-programme focuses on timber business
development. The aim of this programme is to identify and
utilise opportunities that are provided by the timber resources
in the country, and turn them into businesses that have a
positive impact on the forestry sector across the value chain
and at both small, medium and micro level as well as high level
forestry industry.
In terms of funding, the FED programme works closely with
the Small Enterprise Development Agency (SEDA) and the
Industrial Development Corporation (IDC). Small-scale timber
operations can approach the two organisations for financial
assistance support.
According to the yearbook, 692 000 people in rural
communities rely on forestry to earn a living. This figure is an
indication of the significance of small-scale timber operations
in South Africa. Although the industry continues to face
challenges which could negatively affect small-scale
operations starting up, with proper guidance and financial
support, they too can thrive like established businesses.
Timber farming in South Africa has been happening since the 16th century.
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AUGUST / SEPTEMBER 2019 //
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