Forestry South Africa Forestry South Africa Roundwood Sales AnalysisRoundwood Sales Analysisfor the 2009 Financial Yearfor the 2009 Financial Year

Roger GodsmarkRoger Godsmark

Forestry South AfricaForestry South Africa

February 2010February 2010

Analysis of Roundwood Sales and Analysis of Roundwood Sales and Income GeneratedIncome Generated

20092009

Salient Points to NoteSalient Points to Note

Tonnage sales of 14.261 mt were not only 638 000t below the budget of 14.9 mt Tonnage sales of 14.261 mt were not only 638 000t below the budget of 14.9 mt but a massive 2 398 000t (14.4%) less than the corresponding figure for 2008.but a massive 2 398 000t (14.4%) less than the corresponding figure for 2008.Sales across all species were down in comparison to 2008, the biggest decrease Sales across all species were down in comparison to 2008, the biggest decrease being attributable to eucalyptus sales which were over 1.7 mt or 19.6% down on being attributable to eucalyptus sales which were over 1.7 mt or 19.6% down on last year. last year. In terms of sales per product, all products saw a decline in sales as compared to In terms of sales per product, all products saw a decline in sales as compared to 2008, the biggest decrease being attributable to pulpwood with a drop in sales of 2008, the biggest decrease being attributable to pulpwood with a drop in sales of over 1.9 mt (15.5%). Year on year, the biggest decline was that of Euc over 1.9 mt (15.5%). Year on year, the biggest decline was that of Euc Pulpwood which dropped 1.4 mt or 17.7%. Pulpwood which dropped 1.4 mt or 17.7%. Despite the levy having increased by 16.4% between 2008 & 2009 (110 cents to Despite the levy having increased by 16.4% between 2008 & 2009 (110 cents to 128 cents per ton), total income generated of R17.85 million was actually R55 128 cents per ton), total income generated of R17.85 million was actually R55 000 less than that generated the previous year. It was also over R1.2 milion 000 less than that generated the previous year. It was also over R1.2 milion (6.4%) less than that budgeted for in 2009.(6.4%) less than that budgeted for in 2009.Overall levy coverage, as one would have expected given the depressed market Overall levy coverage, as one would have expected given the depressed market conditions, decreased from 94% in 2008 to 82% in 2009 *.conditions, decreased from 94% in 2008 to 82% in 2009 *.** Note: Caution should, however, be exercised with this comparison as it Note: Caution should, however, be exercised with this comparison as it compares DWAF figures for 2007/8 with FSA’s 2009 figures.compares DWAF figures for 2007/8 with FSA’s 2009 figures.

The SA Forestry Industry did not escape the ravages of the The SA Forestry Industry did not escape the ravages of the international economic crisis that came to a head in September 2008. international economic crisis that came to a head in September 2008.

Roundwood Sales by SpeciesRoundwood Sales by Species20092009

42.4%

8.4%

49.2%

Softwood Eucalyptus Wattle

Total Sales – 14 261 000 tonsTotal Sales – 14 261 000 tons

Roundwood Sales by ProductRoundwood Sales by Product20092009

74.0%

20.4%

1.8%

3.7%

Pulpwood Sawlogs Mining Timber Other

Total Sales – 14 261 000 tonsTotal Sales – 14 261 000 tons

Pulpwood Sales by SpeciesPulpwood Sales by Species20092009

29.2%

59.7%

11.1%

Softwood Eucalyptus Wattle

Total Sales – 10 559 000 tonsTotal Sales – 10 559 000 tons

Sawlog Sales by SpeciesSawlog Sales by Species20092009

92.1%

7.9%

Softwood Eucalyptus

Total Sales – 3 220 000 tonsTotal Sales – 3 220 000 tons

Other Roundwood Sales by SpeciesOther Roundwood Sales by Species20092009

35.6%

60.2%

4.2%

Softwood Eucalyptus Wattle

Total Sales – 792 000 tonsTotal Sales – 792 000 tons

Sales Comparisons 2008 vs. 2009Sales Comparisons 2008 vs. 2009Product 2008 2009 Diff tons Diff %Sawlogs: Soft 2 945 228 2 682 158 -263 070 -8.9%

Sawlogs: Hard 276 704 228 628 -48 075 -17.4%

Sawlogs 3 221 932 2 910 787 -311 145 -9.7%Pulpwood: Soft 3 433 277 3 079 425 -353 853 -10.3%

Pulpwood: Hard 9 068 340 7 479 602 -1 588 738 -17.5%

Pulpwood 12 501 617 10 559 027 -1 942 591 -15.5%Mng: Timber : 330 428 261 206 -69 222 -20.9%Poles :Soft 147 463 116 968 -30 494 -20.7%

Poles: Hard 241 704 215 490 -26 214 -10.8%

Poles 389 167 332 458 -56 708 -14.6%Woodchips: Soft 167 775 165 234 -2 541 -1.5%Other: Hard 48779 32 916 -15 863 -32.5%Grand Total 16 659 698 14 261 628 -2 398 070 -14.4%

Roundwood Sales by ContributorRoundwood Sales by Contributor20092009

82.9%

15.6%

1.6%

Corporates Co-ops Independents

Total Sales – 14 261 000 tonsTotal Sales – 14 261 000 tons

Roundwood Sales per MonthRoundwood Sales per Month2009 by Species2009 by Species

0

500

1 000

1 500

J F M A M J J A S O N D

Month

Thou

sand

Ton

s

Softwood Eucalyptus Wattle Total

Highest salesHighest sales -- March March 1 433 000 t 1 433 000 tLowest salesLowest sales -- JulyJuly 1 036 000 t 1 036 000 t

Roundwood Sales per MonthRoundwood Sales per Month2009 by Product2009 by Product

0

500

1 000

1 500

J F M A M J J A S O N D

Month

Thou

sand

Ton

s

Pulpwood Sawlogs Other Total

Highest salesHighest sales -- March March 1 433 000 t 1 433 000 tLowest salesLowest sales -- JulyJuly 1 036 000 t 1 036 000 t

Roundwood Sales per MonthRoundwood Sales per Month2009 Budget vs. Actual2009 Budget vs. Actual

1 000

1 100

1 200

1 300

1 400

1 500

J F M A M J J A S O N D

Month

Thou

sand

Ton

s

Budget Actual

Highest surplusHighest surplus -- March March 191 000 t191 000 tHighest deficitHighest deficit -- July July 206 000 t206 000 t

Contributions Generated by Contributor - Contributions Generated by Contributor - 20092009

82.6%

15.9%

1.5%

Corporates Co-Ops Independents

Total Income Generated – R17 850 000Total Income Generated – R17 850 000

Levy Income Generated per MonthLevy Income Generated per Month2009 Budget vs. Actual2009 Budget vs. Actual

1 200

1 300

1 400

1 500

1 600

1 700

1 800

1 900

J F M A M J J A S O N DMonth

Thou

sand

Ran

ds

Budget Actual

Highest IncomeHighest Income -- March R1 798 000March R1 798 000Lowest IncomeLowest Income -- JulyJuly R1 289 000 R1 289 000

Budgeted FSA Expenditure vs. Actual Budgeted FSA Expenditure vs. Actual Levy Income - 2009Levy Income - 2009

1 000

1 200

1 400

1 600

1 800

2 000

2 200

2 400

2 600

J F M A M J J A S O N D

Month

Thou

sand

Ran

ds

Budgeted Exp. Actual Income

Accumulated deficit by year end - R3 907 000Accumulated deficit by year end - R3 907 000(Excludes approved but unbudgeted expenditure nor(Excludes approved but unbudgeted expenditure nor

attributable income)attributable income)

Tonnage & Levy Income ComparisonTonnage & Levy Income Comparison2009 Budget vs. Actual2009 Budget vs. Actual

10

11

12

13

14

15

16

17

18

19

20

Tonnage Rands

Mill

ion

Ran

d / T

ons

Actual Budget

638 000 Ton Deficit

R1 222 000 Deficit

Tonnage @ 128 cents per tonTonnage @ 128 cents per ton -- 13 497 000 t13 497 000 tTonnage @ 75 cents per tonTonnage @ 75 cents per ton - 764 000 t- 764 000 t

Roundwood Sales ComparisonsRoundwood Sales Comparisons2007/08 DWAF vs. 2009 FSA by Species2007/08 DWAF vs. 2009 FSA by Species

0.771

9.163

7.524

1.204

6.043

7.014

0 2 4 6 8 10 12

Wattle

Softwood

Eucalyptus

Million Tons

DWAF FSA

Sales ex Plantations 2007/08 (DWAF) - 17.5 m tonsSales ex Plantations 2007/08 (DWAF) - 17.5 m tonsFSA based sales 2009FSA based sales 2009 - 14.3 m tons - 14.3 m tons

93% of DWAF

66% of DWAF

156% of DWAF

Overall coverage 82% (94% last yr)

Roundwood Sales ComparisonsRoundwood Sales Comparisons2007/08 DWAF vs. 2009 FSA by Product2007/08 DWAF vs. 2009 FSA by Product

0.387

0.352

0.427

5.427

10.881

0.330

0.332

0.261

2.911

10.559

0 2 4 6 8 10 12 14 16

Other

Poles

Mining Timber

Sawlogs

Pulpwood

Million Tons

DWAF FSA

97% of DWAF

54% of DWAF

61% of DWAF

94% of DWAF

85% of DWAF

Sales ex Plantations 2007/08 (DWAF) - 17.5 m tonsSales ex Plantations 2007/08 (DWAF) - 17.5 m tonsFSA based sales 2009FSA based sales 2009 - 14.3 m tons - 14.3 m tons

Analysis of Roundwood Sales and Analysis of Roundwood Sales and Income GeneratedIncome Generated

2002 - 20092002 - 2009

Roundwood Sales per YearRoundwood Sales per Year2002 - 20092002 - 2009

14.261

16.66016.04016.60016.54116.47616.994

14.305

02468

101214161820

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

Tons

@ lower levy @ full levy

Lower levy excludes a contribution to the ICFRLower levy excludes a contribution to the ICFR

Sales Comparisons per SpeciesSales Comparisons per Species2002 - 2009 2002 - 2009

0

2

4

6

8

10

12

2002 2003 2004 2005 2006 2007 2008 2009Year

Mill

ion

Tons

Eucalytpus Softwood Wattle

Roundwood Sales 2002 - 2009Roundwood Sales 2002 - 2009EucalyptusEucalyptus

6.889

9.2379.010

8.8288.511

8.065

8.725

7.014

6

7

8

9

10

2002 2003 2004 2005 2006 2007 2008 2009

Years

Mill

ion

Tons

Roundwood Sales 2002 - 2009Roundwood Sales 2002 - 2009SoftwoodSoftwood

5.900

6.208

5.995

6.229

6.664 6.6676.526

6.043

5.5

6.0

6.5

7.0

2002 2003 2004 2005 2006 2007 2008 2009

Years

Mill

ion

Tons

Roundwood Sales 2002 - 2009Roundwood Sales 2002 - 2009WattleWattle

1.517

1.575

1.471 1.484

1.425

1.309

1.409

1.2041.2

1.3

1.4

1.5

1.6

1.7

2002 2003 2004 2005 2006 2007 2008 2009

Years

Mill

ion

Tons

Roundwood Sale Comparisons per SpeciesRoundwood Sale Comparisons per Species2008 vs. 20092008 vs. 2009

1.409

6.526

8.725

1.204

6.043

7.014

0

1

2

3

4

5

6

7

8

9

10

Wattle Softwood Eucalyptus

Mill

ion

Tons

2008 2009

Down 205 000t

- 14.6%

Down 1 711 000t

-19.6%

Down 483 000t

- 7.4%

Overall decrease of 2 398 000t or 14.4%Overall decrease of 2 398 000t or 14.4%

Sales Comparisons per ProductSales Comparisons per Product2002 - 2009 2002 - 2009

0

2

4

6

8

10

12

14

2002 2003 2004 2005 2006 2007 2008 2009Year

Mill

ion

Tons

Pulpwood Sawlogs MT & Other

Pulpwood growth over periodPulpwood growth over period + 238 000 tons + 2.3%+ 238 000 tons + 2.3%Sawlog decline over periodSawlog decline over period - 376 000 tons - 11.4%- 376 000 tons - 11.4%MT & Other growth over period + 95 000 tons +13.6%MT & Other growth over period + 95 000 tons +13.6%

Roundwood Sales 2002 - 2009Roundwood Sales 2002 - 2009PulpwoodPulpwood

10.321

12.667 12.67412.381

11.70711.391

12.502

10.559

9

10

11

12

13

14

2002 2003 2004 2005 2006 2007 2008 2009

Years

Mill

ion

Tons

Roundwood Sales 2002 - 2009Roundwood Sales 2002 - 2009SawlogsSawlogs

3.2873.429

3.0393.228

3.991

3.638

3.222

2.911

2.00

2.50

3.00

3.50

4.00

4.50

2002 2003 2004 2005 2006 2007 2008 2009

Years

Mill

ion

Tons

Roundwood Sales 2002 - 2009Roundwood Sales 2002 - 2009Mining Timber & OtherMining Timber & Other

0.697

0.924

0.763

0.9310.901

1.011

0.936

0.792

0.60

0.70

0.80

0.90

1.00

1.10

2002 2003 2004 2005 2006 2007 2008 2009

Years

Mill

ion

Tons

Roundwood Sale Comparisons per ProductRoundwood Sale Comparisons per Product2008 vs. 20092008 vs. 2009

0.936

3.222

12.502

0.792

2.911

10.559

0

2

4

6

8

10

12

14

Other Sawlogs Pulpwood

Mill

ion

Tons

2008 2009

Down 144 000t

-15.4%

Down 1 943 000t -15.5%

Down 311 000t

- 9.7%

Overall decrease of 2 398 000t or 14.4%Overall decrease of 2 398 000t or 14.4%

Levy Income Generated per YearLevy Income Generated per Year2002 - 20092002 - 2009

9.570

11.855 11.46812.249

13.002

17.905 17.850

15.607

8

10

12

14

16

18

20

2002 2003 2004 2005 2006 2007 2008 2009

Year

Mill

ion

Ran

d

Levy income in 2009 actually R55 000 less than in Levy income in 2009 actually R55 000 less than in 2008 and R1 222 000 under budget2008 and R1 222 000 under budget

Sales Tonnage per ContributorSales Tonnage per Contributor2008 vs. 20092008 vs. 2009

0.220 0.222

13.581

2.859

11.822

2.218

0

2

4

6

8

10

12

14

16

Corporates Co-ops Independents

Mill

ion

Tons

2008 2009

Down 1 759 000t

-13.0%

Up 2 000t

+09%

Down 641 000t

-22.4%

Overall decrease of 2 398 000t or 14.4%Overall decrease of 2 398 000t or 14.4%

Income Generation per ContributorIncome Generation per Contributor2008 vs. 20092008 vs. 2009

14.549

3.145

0.211

14.745

2.839

0.2660

2

4

6

8

10

12

14

16

Corporates Co-ops Independents

Mill

ion

Ran

d

2008 2009

Up R196 000

+1.3%

Up R55 000

+26.1%

Down R306 000

-9.7%

Overall decrease of R55 000 or 0.3%Overall decrease of R55 000 or 0.3%