FORESTRY SOUTH AFRICA | AGM | 6 MAY 2009

OUTLINE

Historical Context

Opportunity

Stakeholders and Players

Goal

Obstacles

Solutions

Call to action

OWNERSHIP AND CONTROL

MTO

30 000 ha

Amathole

15 000 ha

PG Bison

35 000 ha

Hans

Merensky

15 000 ha

Hans

Merensky 15 000 ha

DWAF

30 000 ha

0

5000

10000

15000

20000

25000

30000

35000

hectares

Total Area: 129 334 ha

Private State

CONTROL OF PLANTATIONS

REVENUES AND PROVINCIAL SPEND

0

200

400

600

800

1000

Revenue Wages

R millions

Costs @20%

Local Spend

Beginning of State

Plantations

& Woodlots

NECF

10

30

50

70

90

110

130

150

‘000 ha

???

HISTORICAL CONTEXT

200719941994

FORESTRY POTENTIAL

Production (000 cubic m/a)Plantations (hectares)

100 000

Existing

• 66 wood processors

• 8000 employed

• Revenues of R900m/a

770

Potential

• 80% more plantations

• 1.8 X more wood

• 4000 new direct

forestry jobs

1500

Optimisation

• 1.5 X more wood

• Spike in new jobs

1180

130 000

THE OPPORTUNITIES

100 000 ha new plantations

30 000 ha rehabilitated

Value-add where possible

Optimization of processing

THE GOALS

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

110000

2010 2015 2020 2025

Identification

Scoping Resourcing

Establishment

hectares

IMPLEMENTATION PLANS

DWAF

DTI

Private Sector

DLA

Municipalities

Service Providers

Research, Education Institutions

Traditional Leadership

DFIs

STAKEHOLDERS AND PLAYERS

• Identifying and addressing blockages

• Providing and leveraging of funding

• Facilitation of 3rd party involvement and support

• Provision of support to govt departments, communities

ASGISA EC ROLE

Principle Comments

Best practice, optimal ROIs• Commerically viable, sustainable projects

• Scale >300 ha, depending on context

Transparency to land beneficiaries • Clear, written project descriptions

Maximize benefits to land beneficiaries

• I.t.o ownership, profit-share,

empowerment, employment

• KEY to Risk Management

Maximize independence of growers• Market commitment, management

• KEY to empowerment, ownership

Mitigate against weaknesses/gaps

• Finance, management and technical

support

• KEY to Best practice, ROIs

Facilitate support from 3rd parties:

– empowering local people

– ensuring returns to 3rd parties

– by way of formal, negotiated agreements

• Depending on project requirements

• Should be open, fair and worthwhile to

both parties

ASGISA EC OPERATING PRINCIPLES

Community

ProjectFunding

Shareholding

Management

Product Market

ASGISA

Strategic

Partner

Community

Community

Trust

Strategic

Partner

IDC

ASGISA

DBSA

StratPartner

DWAF

DedicatedFree

1st Refusal

ASGISA

Where

necessary

ASGISA EC PROJECT MODEL

Funding

Licensing

Communal Tenure

Skills & Capacity

OBSTACLES, ISSUES AND SOLUTIONS

R3-5 Billion

High risk for investors

State funding sources

• IDC, DWAF, AsgiSA

Funding

FUNDING

Still relatively new

Criteria unclear

Capacity of Authorities

Volume of applications

Lack of data

DWAF galvanizing

FSA/DWAF/AsgiSA teaming

Pre-emptive screening

Class assessments

Licensing

LICENSING

Unfamiliar for sector

Management mindsets

Process intensive

Temptation of shortcuts

Widespread interest

Forestry Protocols

Co role reviews

Government principles

Most NB Risk Mitigation

Communal Tenure

COMMUNAL TENURE

Community readiness

National capacity drain

Fragmented distribution

Economies of scale

3rd party support

Sector interest high

Latent/hidden expertise

Support/control balance

Formal training

Skills & Capacity

SKILLS & CAPACITY

CALL TO ACTION

• Funders - go the distance

• Licensing Authorities – Maintain the efforts at facilitating,

reduce the obstacles

• Promoters – Get serious about empowering

• 3rd parties – Register your interest, flush out people with

experience