Business Day (Johannesburg)

7 July 2005

South Africa: Sawmill Workers Face Axe As Log Yields Fall Off

Johannesburg — A GROUP of independent sawmills could close today with the loss of 2500 jobs following Komatiland Forest Products's decision to stop supplying raw materials, the director of one of the sawmills, Manny Ferreirinha, said yesterday.

State-owned Komatiland told at least 10 sawmills in Mpumalanga and Limpopo that it would not renew their contracts for the 2005-06 financial year.

Ferreirinha said that Komatiland's move was abrupt and did not give them time to explore alternatives.

Komatiland CEO Kobus Breed said last night that the company was "obliged" to reduce the number of logs sold to customers due to a fall in production caused by forest fires two years ago.

Breed said that in the 2005-06 financial year, Komatiland was expecting a reduction of nearly 300 000 cubic metres of lumber, or 16%, because of fires.

"Naturally, this has a material effect on the sustainable yield from our plantations.

"Indications are that the negative effect of the fires may reduce volumes even further in future years, before available volumes increase again," he said.

The sawmills' representatives have already met the water affairs and forestry department to discuss the looming closures.

Komatiland is one of the forests government is privatising.

The plans hit a snag last year when the Competition Commission rejected the acquisition of the company by the Bonheur consortium, the preferred bidder that included Global Forest Products and Global Sawmills.

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