South Africa: A Vertical Challenge?

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Johannesburg — FROM the tree to the consumer in the street. This is how Steinhoff CEO Markus Jooste described subsidiary PG Bison. PG Bison is one of Steinhoff International's most vertically integrated business units. It boasts the trees it cuts down, the plant to shred, pummel and compact the pine into chipboard, and the outlets through which it sells the end products. Its recent opening of a R1,5bn particle board plant in Eastern Cape fits this plan.

The plan was cunningly simple: Mondi had allowed 33000ha of forest to grow unaided. So PG Bison bought the forest, and then built a plant. Now it can produce up to 1000m' of board a day as 6500 trees are sent through the plant. It can also eliminate imports, consider exports and save on tax, not too mention saving on not having to buy raw wood.

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