Forestry and Related Services Industry in South Africa 2024

Challenges

High input costs. Inconsistent electricity supply. Reduced local demand for timber. Shortage of roundwood. Underperformance by Transnet’s rail and port operations.

Introduction

Sales of some forestry products are on an upward trend, largely due to increasing exports. In 2023, the value of exported forestry products reduced. The forestry and sawmilling industries face challenges, including the rail and ports crisis, inconsistent electricity supply, high input costs, reduced local demand for timber, and a shortage of roundwood. Well-known companies involved in the forestry and sawmilling industries include Mondi South Africa and Sappi Southern Africa.

Opportunities

Plans by the state to allow private companies to establish plantations on 22,000ha in the Western Cape.

Outlook

The World Bank expects log prices to rise in 2024 and 2025. Companies expect strained local demand for forestry products in 2024 as disposable income remains low and trading conditions in the agricultural, industrial and mining industries continue to be tough. In the medium to long term, local demand is forecast to increase with greater use of timber in building construction. South African exporters should benefit from the expected increase in global prices.

Report Coverage

This report on the forestry industry and related services, such as sawmilling, includes information on the location, size and state of the industry, production, income and trade. There is information on notable players and corporate actions, opportunities for SMEs and influencing factors such as the economic environment, rail and port issues and inconsistent electricity supply. Profiles of 18 companies include major players such as Sappi and Mondi, and well-known companies including the NCT Forestry Agricultural Co-operative, Lion Match, York Timbers, PG Bison and Merensky Timber.

Trends

An increasing number of small-scale and community forestry schemes are being certified by the Forest Stewardship Council. The proliferation of informal sawmills. The use of timber in building construction is increasing.