Thabang Mokopanele And Mathabo Le Roux
31 July 2007
Johannesburg — PAPER, pulp and timber companies are set to incur losses running into millions of rands as a result of damage caused by this weekend's devastating bush fires in Mpumalanga, Swaziland and KwaZulu-Natal, which destroyed thousands of hectares of plantations.
The destruction also bodes ill for the construction industry, with York Timber Organisation warning that damage at one of the timber group's sawmills and the destruction of its plantations would compound the long-term softwood lumber shortage already facing the country.
York CE Lance Cooper said limited production would be restored at the damaged sawmill this week and extra shifts at the company's other seven mills were being planned to bolster production volumes to avoid disruption of supplies.
York said it lost 10% of production after fires damaged an estimated 6000ha of its 90000ha under plantation.
A portion of the company's Driekop sawmill near Graskop was also affected, with the damage amounting to R50m-R70m .
Paper and pulp companies Sappi and Mondi, which listed earlier this month, were also affected by the fires.
Mondi's division for business paper, Mondi Business Paper, lost 8300ha in Graskop, Barberton, Aswete, Piet Retief, Paulpietersburg and Tigerskloof.
However, spokesman Louise Brugman said that many of its plantations were unaffected and the percentage of scorched timber comprised only 2% of the company's total area under plantation in the country of 357000ha.
The group, which releases its results tomorrow, was not in a position yet to quantify the losses.
Paper group Sappi said 15 fires on the Highveld and Lowveld had ravaged the group's plantations at Piet Retief, Badplaas, Barberton, Sabie and Sudwala.
Some of the fires were still ravaging and Sappi spokesman Andre Oberholtzer said it was too "A change in weather conditions may cause some of the fires to start up again. We will only be in a position to quantify the damage once it is all under control." Oberholtzer said that the group would likely be in a position to give an indication of the fires' effect on Monday, when Sappi released quarterly results.
Sappi was also hit earlier this month when 5500ha of forest were destroyed in runaway fires in KwaZulu-Natal, with the group putting the losses at R35m.
York's mill was insured for loss of profits and asset insurance, however, Cooper said there was no insurance company covering plantations. The plantations are insured by way of an internal self-insurance risk pool, due to the high cost of premiums and the ability of the company to salvage a lot of the burnt timber. The company said it was too early to estimate how much it had lost in monetary value.
"We will ensure that the salvage operations are effective and the wastage of timber is kept to a minimum," Cooper said.
The sawmill would take six to 12 months to replace, Cooper said.
Provincial and Local Government Minister Sydney Mufamadi yesterday said the government was considering declaring fire-ravaged parts of Mpumalanga disaster zones.
He said he wanted immediate assistance to be the focus of relief efforts, while damage assessments would indicate if resources needed to be allocated from national government as well as local government.
Be the first to Write a Comment!
Copyright © 2007 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
