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The History of South African Forest Investments

The History of South African Forest Investments

The origin of SA Forest Investments is intimately linked to the fortunes of the gold mining industry in the Sabie and Pilgrims Rest areas. In the late 1800’s the Transvaal Gold Mining Estates operated mines under the control of The Corner House.

Underground mining required timber supports, initially obtained from the indigenous forests, but it was obvious that this source of timber was being exhausted and a start was made with the planting of trees.

In 1910, EB Glaeser heard about a tree-planting scheme planned by TGME at Elandsdrift, near Sabie. After a short interview with the man; he was appointed in the new post.

A prominent wattle grower, McKenzie from Dalton, drew up a report on tree planting for the farms Elandsdrift, Hendriksdal and Klipplaat. He considered the climatic conditions and nature of the soil well suited for growing wattle and eucalypts. He outlined the method by which the ground should be prepared by ploughing to a depth of 10 to 15 cm and harrowing it to a loose tilth.

Seed of black wattle was to be hand sown in rows 1m apart and rows 3,6 m apart. At the age of ten years the tree-would produce marketable tannin bark, and poles suitable for mining purposes. A hectare was expected to yield 8 to 12 tons of tannin bark and 40 tons of wood depending on depth and nature of soil.

After the directors decided to proceed with the project, Glaeser was instructed to start afforestation on Elandsdrift farm, 800 ha in extent. His headquarters was at the company’s gold mine, where he was initiated into a society of men whose language and manners ill befitted the life he had lived. They were not interested in the forestry project.

His work progressed satisfactorily. He had enough labour and implements, and duly completed planting 200 ha by the end of the first year. In 1916, the trees had reached the stage of yielding a return in tannin, bark and mining poles. He was instructed to visit leading wattle growers in Natal to acquire up-to-date knowledge of plant and machinery for processing the bark. Orders were placed with AF Poole for machinery and Merryweathers for specially built wagons for transport.

The bark had a high tannin content and found a ready sale to tanning factories in Port Elizabeth, Salt River, Silverton, and on the export market in Durban. Almost all the mining timber was railed to the company’s group of mines on the Rand.

Following the wattle-growing programme, a large commercial timber scheme was launched in 1919 with the planting of pines. The first profits appeared in the balance sheet in 1919, and by 1927 the entire capital cost had been recovered. As the plantations grew it became obvious that the general manager at Pilgrim’s Rest, whose preoccupation was mining, no longer controled the plantation activities. Nils Eckbo was offered the position of consultant and he proceeded to put the tree-planting programme on a scientific basis. The modest annual profits grew and by 1945 the plantations were earning over £60,000 a year.

A sawmill and a box factory was established on the farm Hendriksdal and in 1939 an arrangement was made with the Acme Box Company of Durban to manage the sawmill. Moshal Gevisser Holdings and Hillman Brothers owned the shares in Acme.

The success of the TGME forestry venture did not go unnoticed to the outside world to the extent that, shortly after World War II, a daring attempt was made to acquire control of these assets.

Robert Stephens was a pre-war Rhodes scholar forestry graduate from Oxford University. His account was that, while he was serving in the SA Engineering Corps in North Africa, he obtained a copy of a TGME annual report that detailed the financial success of their forestry activities. This so impressed him that, after the war, he became involved in mounting a take over.

Corner House became aware of this threat, and the chairman of TGME, Gordon Richdale, set about securing supporting votes from shareholders. The “Stephens syndicate” bought shares at 16s a share and sold them six months later at 35s after being defeated by a few votes at the annual general meeting in 1946. During the scramble for shares the price actually reached about 57s.

This incident had beneficial consequences in that a decision was made that TGME forestry assets were to be divorced from the mining holdings and a separate company, SA Forests Investments Ltd. was formed in 1948.

A professional management team was employed under Deon Hofmeyer who became the first general manager with offices in Sabie. Extensive changes in the management of these holdings were introduced similar in style to those in the Department of Forestry from which most of the forestry trained staff had been recruited. It was at this time that the Acme Box Companies sawmills at Hendriksdal and Driekop were incorporated into SAFI.

The shareholders in SAFI were Moshal Gevisser Holdings, Hillman Brothers, The Central Mining and Investment Corporation, Rand Mines and the Transvaal Gold Mining Estates. It had a capital of £125,000 in £1 shares.

In 1942 John Loseby took up the position of Estate Manager at Maggsleigh, the forestry undertaking of Charles Maggs Investments.

Some 800 ha of wattles had to be converted to pines and all open grazing land had to be planted. A small sawmill was developed and the ready demand for lumber made it profitable to convert a sizeable area of unsuitable softwoods to P. patula. There were also large compartments n young cypress trees for which a good market was found for the manufacture of army tent poles.

Due to the heavy programme of plantation operations a relatively large black workforce was maintained. Many of the men were married and their wives played a useful role in planting operations. The going rate for black labour was 1s 8d per day plus housing and rations. Meat. cost 9d per kg and mealie meal 8s 6d per bag.

In 1950, O’Connell Maggs broached the subject of his family’s intent to sell Maggsleigh. Their object in converting the estate to a potentially profitable pine-growing proposition had largely been fulfilled. Loseby was abashed at the figure he mentioned as a possibly acceptable selling price and told Maggs to go for double.

SAFI showed an interest and Maggs arranged that Loseby have discussions with WE Watt who was their consultant. They spent many hours together and in correspondence, but the gap between their respective thoughts narrowed only marginally. The delay in reaching any sort of agreement gave time for other developments to take place,and, in the end, the original figure was met in a deal concluded in 1952. Charles Engelhard was the purchaser and he turned the property over to SAFI in return for shares. He thus gained a foothold in SAFI.

The next major corporate change that took place was around 1956 when Gordon Richdale, who had left Corner House to join Engelhard Industries in America, returned to South Africa with Charles Engelhard and obtained control of SAFI.

This change brought about farther developments in both forests and sawmills. The Acme sawmilling structure was reviewed under the guidance of David Gevisser and John Loseby and a decision was taken to close down the Hendriksdal mill and con-centrate activities at a new mill in Sabie, retain Driekop and build a satellite mill at Doornlaagte, near Bushbuckridge. David Gevisser was subsequently appointed as head of SAFI. Ronnie Simmonds succeeded Hofmeyer as general manager in 1961.

The Engelhard era came to an end on his untimely death in 1971. His widow, Jane, disposed of the SAFI interests to the Anglo American Corporation in 1972. This change in corporate control had far reaching ramifications, resulting in the ultimate fragmentation of SAFI/Acme.

After David Gevisser resigned from Anglo American, Chris Griffiths restructured the forests and sawmills by consolidating SAFI, Acme and Peak Timbers Swaziland; he appointing Duncan Turner to head up the new organisation in 1978. Dave Lundie succeeded Turner when he retired.

At the beginning of 2001 a US investment company Global Environment Fund and Mondi (part of a Mondi-Anglo-American merger) formed a jointly owned forest products company called Global Forest Products.

Mondi’s assets of 60,000ha of pine sawlog plantations in the Mpumalanga province as well as Mondi’s sawmills at Sabie, Driekop and Jessievale were part of the deal. In 2006 the Peak Timbers Estate with two sawmills and 19,000ha of plantations were sold to Global Environmental Fund. Global Forest Products was sold to a Yorkcor consortium in 2007 and a new listed forestry company, York, consisting of the combined assets of Global Forest Products and Yorkcor was formed.

Gleaned from “There is Honey in the Forest” by Willem Olivier and other sources.

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