the impact of the 2007 plantation fires on the sa forestry & forest products industry
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The Impact of the 2007 Plantation Fires on the SA Forestry & Forest Products Industry. Roger Godsmark Forestry South Africa, August 2007. Fire Damage in 2007. Introduction & History of Fire Damage Areas Affected Direct Current Cost of Fire Damage Loss of Timber Rehabilitation Costs - PowerPoint PPT PresentationTRANSCRIPT
The Impact of the 2007 Plantation The Impact of the 2007 Plantation Fires on the SA Forestry & Forest Fires on the SA Forestry & Forest
Products IndustryProducts Industry
Roger GodsmarkRoger Godsmark
Forestry South Africa, August 2007Forestry South Africa, August 2007
Fire Damage in 2007Fire Damage in 2007
Introduction & History of Fire DamageIntroduction & History of Fire DamageAreas AffectedAreas AffectedDirect Current Cost of Fire DamageDirect Current Cost of Fire Damage– Loss of TimberLoss of Timber– Rehabilitation CostsRehabilitation CostsFuture Costs of Fire DamageFuture Costs of Fire Damage– Foregone volume and income ex plantationsForegone volume and income ex plantations– Foregone volume and income ex processorsForegone volume and income ex processors
Other ImpactsOther ImpactsSummarySummary
Section 1 Section 1 Introduction & History of Fire Introduction & History of Fire
Damage Damage
Economic Impact of Forest Fires 1Economic Impact of Forest Fires 1
Impact on Forestry IndustryImpact on Forestry Industry Value of timber volume losses (present and future)Value of timber volume losses (present and future) Cost of unplanned harvesting and transportCost of unplanned harvesting and transport Cost of replantingCost of replanting Disruption caused by unplanned age-class distribution Disruption caused by unplanned age-class distribution
changeschanges
Impact on Forest Products IndustryImpact on Forest Products Industry Lost intakeLost intake Value of lost productionValue of lost production
Fires that damage plantations have a serious economic, Fires that damage plantations have a serious economic, environmental and social impactenvironmental and social impact
1. Economic Impacts1. Economic Impacts
Economic Impact of Forest Fires 2Economic Impact of Forest Fires 2
Atmospheric pollutionAtmospheric pollution
Loss of biodiversityLoss of biodiversity
Damage to soilDamage to soil
Unsightly landscape (reduced tourism)Unsightly landscape (reduced tourism)
2. Environmental Impacts2. Environmental Impacts
3. Social Impacts3. Social Impacts
Loss of lifeLoss of life
Loss of jobsLoss of jobs
Loss of livelihoods (business owners)Loss of livelihoods (business owners)
Damage to Plantations by Fires Damage to Plantations by Fires 1980 to 20071980 to 2007
0
10
20
30
40
50
60
70
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Years
Thou
sand
Hec
tare
s
Total area damaged to 2006Total area damaged to 2006 - 733,000 ha- 733,000 haTotal area damaged by fire to 2006Total area damaged by fire to 2006 - 387,000 ha (53%)- 387,000 ha (53%)Average fire damage 1980 to 2006Average fire damage 1980 to 2006 - 14,300 ha p.a.- 14,300 ha p.a.
As at August 14th 2007
64 000 ha in RSA +
20 000 ha in Swaziland
Section 2 Section 2 Areas Affected Areas Affected
Total Area Damaged by FireTotal Area Damaged by Fireby Genus & Provinceby Genus & Province
20,280
47,760
13,948
2,2560
10,000
20,000
30,000
40,000
50,000
60,000
Mpumalanga KZN Cape SwazilandProvince
Hec
tare
s
Pine Euc Wattle
Total area damaged by fire in RSA = 63,964 haTotal area damaged by fire in RSA = 63,964 ha
Pine area 39,257 ha
Euc. area 22,140 ha
Wattle area 2,567 ha
Total Area Damaged by FireTotal Area Damaged by Fireby Province & Genusby Province & Genus
2,267
22,140
39,257
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Pine Euc WattleGenus
Hec
tare
s
Mpumalanga KZN Cape
Total area damaged including Swaziland = 84,244 haTotal area damaged including Swaziland = 84,244 ha
Swaziland: Pine 19,000 ha
Swaziland: Euc 1,240 ha
Swaziland: Wattle 40 ha
Total Area Damaged by FireTotal Area Damaged by Fireby Product & Provinceby Product & Province
20,280
47,760
13,948
2,2560
10,000
20,000
30,000
40,000
50,000
60,000
Mpumalanga KZN Cape SwazilandProvince
Hec
tare
s
Sawlogs Pulpwood Other
Total area damaged by fire in RSA = 63,964 haTotal area damaged by fire in RSA = 63,964 ha
Sawlog area 30,455 ha
Pulpwood area 28,760 ha
Other area 4,749 ha
Total Area Damaged by FireTotal Area Damaged by Fireby Province & Productby Province & Product
4,749
28,76030,455
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Sawlogs Pulpwood OtherProduct
Hec
tare
s
Mpumalanga KZN Cape
Total area damaged including Swaziland = 84,244 haTotal area damaged including Swaziland = 84,244 ha
Swazi: Saw 15,000 ha
Swazi: Pulp 5,280 ha
Areas Burnt as % of Total Area Planted Areas Burnt as % of Total Area Planted by Provinceby Province
0.00%
0.62%
2.09%
2.84%
9.16%
0% 2% 4% 6% 8% 10%
Limpopo
E.Cape
W. Cape
KZN
Mpumalanga
% of Total Planted Area
Forestry in Mpumalanga hit hardestForestry in Mpumalanga hit hardest
Areas Burnt as % of Total Area Planted Areas Burnt as % of Total Area Planted by Genusby Genus
0.00%
2.45%
4.63%
5.70%
0% 1% 2% 3% 4% 5% 6% 7%
Other
Wattle
Euc
Pine
% of Total Planted Area
Pine areas hit hardestPine areas hit hardest
Areas Burnt as % of Total Area Planted Areas Burnt as % of Total Area Planted by Productby Product
4.23%
4.30%
6.19%
0% 1% 2% 3% 4% 5% 6% 7%
Pulpwood
Other
Sawlogs
% of Total Planted Area
Sawlog areas hit hardestSawlog areas hit hardest
Areas Damaged by FireAreas Damaged by Fireby Product and Severity of Damageby Product and Severity of Damage
30,455
21,140
8,802
2,567
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Pine Saw Gum Pulp Pine Pulp Wattle PulpProduct
Hec
tare
s
Salvageable Total write-off
Total area totally destroyed = 24,620 ha (38%)Total area totally destroyed = 24,620 ha (38%)
34%
45%
34%
Areas Damaged by FireAreas Damaged by Fireby Product and Severity of Damageby Product and Severity of Damage
20,100
12,177
5,809
1,258
10,355 9,963
2,9931,309
0
5,000
10,000
15,000
20,000
25,000
Pine Saw Gum Pulp Pine Pulp Wattle PulpProduct
Hec
tare
s
Salvageable Total write-off
Total area totally destroyed = 24,620 ha (38%)Total area totally destroyed = 24,620 ha (38%)
Section 3 Section 3 Direct Current Cost of Fire Damage Direct Current Cost of Fire Damage
to Plantations to Plantations
Cost of Fire DamageCost of Fire Damageby Genus & Provinceby Genus & Province
R51m
R285m
R1,047m
R465m
0
200
400
600
800
1,000
1,200
Mpumalanga KZN Cape SwazilandProvince
Ran
d M
illio
n
Pine Euc Wattle
Total cost of lost timber in RSA = R1.4 billionTotal cost of lost timber in RSA = R1.4 billion
76% of total loss in RSA
Total Cost of Fire DamageTotal Cost of Fire Damageby Province & Genusby Province & Genus
R34m
R440m
R910m
0
200
400
600
800
1,000
Pine Euc WattleGenus
Ran
d M
illio
n
Mpumalanga KZN Cape
Total cost of lost timber in RSA = R1.4 billionTotal cost of lost timber in RSA = R1.4 billion
66% of total loss in RSA
Total Cost of Fire DamageTotal Cost of Fire Damageby Product & Provinceby Product & Province
R51m
R285m
R1,047m
R465m
0
200
400
600
800
1,000
1,200
Mpumalanga KZN Cape SwazilandProvince
Ran
d M
illio
n
Sawlogs Pulpwood Other
Total cost of lost timber in RSA = R1.4 billionTotal cost of lost timber in RSA = R1.4 billion
76% of total loss in RSA
Total Cost of Fire DamageTotal Cost of Fire Damageby Province & Productby Province & Product
R746m
R622m
R15m0
200
400
600
800
1,000
Sawlogs Pulpwood OtherProduct
Ran
d M
illio
n
Mpumalanga KZN Cape
Total cost of lost timber in RSA = R1.4 billionTotal cost of lost timber in RSA = R1.4 billion
54% of total loss in RSA
Cost of Damage as % of Annual Sales Cost of Damage as % of Annual Sales from Plantations from Plantations (2006)(2006)
7.08%
26.26%
16.26%
60.71%
0% 10% 20% 30% 40% 50% 60% 70%
Other
Average All
Pulpwood
Sawlogs
% of Annual Sales in 2006
Total sales in 2006 = R5.3 billionTotal sales in 2006 = R5.3 billion
Cost of Damage as % of Annual Sales Cost of Damage as % of Annual Sales from Plantations from Plantations (2006)(2006)
10.7%
12.5%
26.3%
54.9%
0% 10% 20% 30% 40% 50% 60% 70%
KZN
Cape
Average All
Mpumalanga
% of Annual Sales in 2006
Total sales in 2006 = R5.3 billionTotal sales in 2006 = R5.3 billion
Harvesting & Re-establishment CostsHarvesting & Re-establishment CostsAssociated With Written-Off AreasAssociated With Written-Off Areas
R 4
R 10
R 33
R 34
R 2
R 48
R 37
R 80
0 20 40 60 80 100
Wattle Pulpwood
Pine Pulpwood
Gum Pulpwood
Pine Sawlogs
Million Rands
Re-establishment Harvesting
Total additional costs = R248 millionTotal additional costs = R248 million
Harvesting & Re-establishment CostsHarvesting & Re-establishment CostsAssociated With Written-Off AreasAssociated With Written-Off Areas
R 10
R 33
R 34
R 48
R 37
R 80
0 20 40 60 80 100 120 140
Wattle Pulpwood
Pine Pulpwood
Gum Pulpwood
Pine Sawlogs
Million Rands
Re-establishment Harvesting
Total additional direct costs = R248 millionTotal additional direct costs = R248 million
R70
R115
R58
R7
Harvesting & Re-establishment CostsHarvesting & Re-establishment CostsAssociated With Written-Off AreasAssociated With Written-Off Areas
R 19
R 60
R 41
R 121
0 50 100 150 200
Cape
KZN
Mpumalanga
Million Rands
Re-establishment Harvesting
Mpumalanga’s costs greatest at 73% of total Mpumalanga’s costs greatest at 73% of total
R181
R60
R8
Total Current Cost of Fire DamageTotal Current Cost of Fire Damageby Product by Product
R1,227
R345
R600
200
400
600
800
1,000
1,200
1,400
Mpumalanga KZN CapeProvince
Mill
ion
Ran
ds
Fire Losses Addditional Costs
Total current fire damage costs – R1.6 billionTotal current fire damage costs – R1.6 billion
75% of total cost of damage
Section 4 Section 4 Costs Associated with Future Costs Associated with Future
Volumes and Incomes ForegoneVolumes and Incomes Foregoneex Plantationsex Plantations
ex Processing plantsex Processing plants
Future Volume Affected by FireFuture Volume Affected by Fireby Product and Severity of Damageby Product and Severity of Damage
4.73m m3
2.82 m t
1.64 m t
90 000 t0
1
2
3
4
5
6
Pine Saw Pine Pulp Gum Pulp Wattle PulpProduct
Mill
ion
m3
/ ton
s
Salvageable Total write-off
Future volume lost = 3.3 million tonsFuture volume lost = 3.3 million tons
Future volume lost comes ONLY from areas totally destroyed (i.e. written off)
Future Volume Affected by FireFuture Volume Affected by Fireby Product and Severity of Damageby Product and Severity of Damage
0.046
0.740
0.959
1.609
0.044
0.904
1.861
3.124
0 1 2 3 4
Wattle Pulpwood
Gum Pulpwood
Pine Pulpwood
Pine Sawlogs
Million m3 / tons
Total write-off Salvageable
Future volume lost = 3.3 million tonsFuture volume lost = 3.3 million tons
Volume to be harvested from salvageable areas
= 5.9 million tons
Future Value Foregone ex Plantations of Future Value Foregone ex Plantations of Timber Volume Lost on Written-Off AreasTimber Volume Lost on Written-Off Areas
R 21
R 235
R 252
R 676
0 100 200 300 400 500 600 700 800
Wattle Pulpwood
Gum Pulpwood
Pine Pulpwood
Pine Sawlogs
Million Rand
Total future income foregone = R1.2 billion Total future income foregone = R1.2 billion
Future Output Volume of Timber Products Future Output Volume of Timber Products Foregone from Processing PlantsForegone from Processing Plants
12
185
274
756
46
740
959
1,609
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800
Wattle Pulp
Gum Pulp
Pine Pulp
Pine SawnTimber
Thousand m3 / tons
Output Foregone Input Foregone
Future output volume foregone ex processors =1.2m tFuture output volume foregone ex processors =1.2m t
Future Output Value of Timber Products Future Output Value of Timber Products Foregone from Processing PlantsForegone from Processing Plants
R 51
R 816
R 1,209
R 1,600
0 500 1,000 1,500 2,000
Wattle Pulp
Gum Pulp
Pine Pulp
Pine SawnTimber
Million Rand
Future income foregone ex processors = R3.7 billionFuture income foregone ex processors = R3.7 billion
Future Volume Foregone as % of 2006 Future Volume Foregone as % of 2006 Sales Volume ex PlantationsSales Volume ex Plantations
4.8%
10.0%
26.4%
29.2%
0% 5% 10% 15% 20% 25% 30% 35%
Wattle Pulpwood
Gum Pulpwood
Pine Pulpwood
Pine Sawlogs
% of Sales from Plantations in 2006
Future volume foregone ex forests = 3.3 million tonsFuture volume foregone ex forests = 3.3 million tons
Future Value Foregone as % of 2006 Future Value Foregone as % of 2006 Sales Value ex ProcessorsSales Value ex Processors
23.4%
28.2%
57.0%
0% 10% 20% 30% 40% 50% 60% 70%
All Products
Pulp
Sawn Timber
% of Sales from Processing Plants in 2006
Future income foregone ex processors = R3.7 billionFuture income foregone ex processors = R3.7 billion
Total Future Foregone Income Losses as a Result Total Future Foregone Income Losses as a Result of Fire Damageof Fire Damage
R3,482
R1,211
R1660
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Mpumalanga KZN CapeProvince
Mill
ion
Ran
ds
To Processors To Forests
Total future income foregone – R4.9 billionTotal future income foregone – R4.9 billion
72% of total
Section 5Section 5Other ImpactsOther Impacts
On jobsOn jobsOn GGPOn GGP
On InvestmentOn Investment
Potential Jobs at Risk from Fire Damaged AreasPotential Jobs at Risk from Fire Damaged Areasby Provinceby Province
728
135
1,165
3,333
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Mpumalanga KZN Cape SwazilandProvince
No.
Job
s
ex Written-off areas ex Salvageable areas
Total jobs affected in RSA = 4,634 haTotal jobs affected in RSA = 4,634 ha
Potential Livelihoods at Risk from Fire Damaged Potential Livelihoods at Risk from Fire Damaged Areas by ProvinceAreas by Province
21,100
3,900
33,800
96,700
0
20,000
40,000
60,000
80,000
100,000
120,000
Mpumalanga KZN Cape SwazilandProvince
No.
Peo
ple
Direct jobs Indirect jobs Dependents
Total people that could be affected in RSA = 134,400Total people that could be affected in RSA = 134,400
Impact of Fires on Forestry Contribution to Impact of Fires on Forestry Contribution to Provincial GGP’sProvincial GGP’s
1,871
2,823
419
969
2,591
371
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Mpumalanga KZN CapeProvince
Mill
ion
Ran
d
Before Fires After Fires
48% drop
8% drop
12% drop
Note: impact would be felt over a number of years so impact will not be Note: impact would be felt over a number of years so impact will not be so marked as indicated so marked as indicated
Impact of Fires on Agricultural Contribution to Impact of Fires on Agricultural Contribution to Provincial GGP’sProvincial GGP’s
3,500
9,800
2,8002,597
9,568
2,751
0
2,000
4,000
6,000
8,000
10,000
12,000
Mpumalanga KZN CapeProvince
Mill
ion
Ran
d
Before Fires After Fires
25.8% drop
2.4% drop
1.7% drop
Note: impact would be felt over a number of years so impact will not be Note: impact would be felt over a number of years so impact will not be so marked as indicated so marked as indicated
Impact of Fires on Forest Products Contribution Impact of Fires on Forest Products Contribution to Provincial GGP’sto Provincial GGP’s
2,841
860262 744
11,300 10,321
0
2,000
4,000
6,000
8,000
10,000
12,000
Mpumalanga KZN CapeProvince
Mill
ion
Ran
d
Before Fires After Fires
91% drop
9% drop
14% drop
Note: impact would be felt over a number of years so impact will not be Note: impact would be felt over a number of years so impact will not be so marked as indicated so marked as indicated
Impact of Fires on Manufacturing Sector’s Impact of Fires on Manufacturing Sector’s Contribution to Provincial GGP’sContribution to Provincial GGP’s
18.9
54.257.8
16.3
53.257.7
0
10
20
30
40
50
60
70
Mpumalanga KZN CapeProvince
Bill
ion
Ran
d
Before Fires After Fires
13.6% drop
1.8% drop
0.2% drop
Note: impact would be felt over a number of years so impact will not be Note: impact would be felt over a number of years so impact will not be so marked as indicated so marked as indicated
Impact of Fires on Total Investment in Plantation Impact of Fires on Total Investment in Plantation Forests 2006Forests 2006
7,211
3,519
6,165
3,467
5,875 5,590
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Mpumalanga KZN CapeProvince
Mill
ion
Ran
d
Before Fires After Fires
Note: impact felt immediately – total investment of R17.4bn reduced by Note: impact felt immediately – total investment of R17.4bn reduced by R1.4bn or by 8.0%R1.4bn or by 8.0%
14.5% drop
4.9% drop
1.5% drop
Impact of Fires on Investment in Industry’s Tree Impact of Fires on Investment in Industry’s Tree Resource 2006Resource 2006
4.05
2.14
9.60
3.002.08
8.22
2.99 2.70
0
2
4
6
8
10
12
Mpumalanga KZN Cape RSAProvince
Bill
ion
Ran
d
Before Fires After Fires
Note: impact felt immediately – total investment of R9.6bn reduced by Note: impact felt immediately – total investment of R9.6bn reduced by R1.4bn or by 14.4%R1.4bn or by 14.4%
25.8% drop
9.5% drop
14.4% drop
2.4% drop
Section 6 Section 6 Summary of 2007 Fire Related Summary of 2007 Fire Related
Costs and Losses Costs and Losses
Summary of Fire Damage 2007Summary of Fire Damage 2007Areas AffectedAreas Affected
ProvinceProvince Areas Damaged (ha)Areas Damaged (ha) TotalTotalSalvageableSalvageable Write-off Write-off
MpumalangaMpumalanga 29,70829,708 18,05218,052 47,76047,760KZNKZN 8,1648,164 5,7845,784 13,94813,948E. & W. CapeE. & W. Cape 1,4721,472 784784 2,2562,256Total RSATotal RSA 39,34439,344 24,62024,620 63,96463,964SwazilandSwaziland 12,24212,242 7,0387,038 20,28020,280Total AllTotal All 52,58652,586 31,65831,658 84,24484,244
Summary of Fire Damage 2007Summary of Fire Damage 2007Current Cost of LossesCurrent Cost of Losses
ProvinceProvince Losses (R million)Losses (R million) TotalTotalTimberTimber Add. Costs Add. Costs
MpumalangaMpumalanga R1,047R1,047 R181R181 R1,228R1,228KZNKZN R285R285 R60R60 R345R345E. & W. CapeE. & W. Cape R52R52 R8R8 R60R60Total RSATotal RSA R1,384R1,384 R249R249 R1,633R1,633
Summary of Fire Damage 2007Summary of Fire Damage 2007Future Potential LossesFuture Potential Losses
ProvinceProvince Future Losses (R million)Future Losses (R million) TotalTotalForestsForests Processors Processors
MpumalangaMpumalanga R903R903 R2,579R2,579 R3,482R3,482KZNKZN R232R232 R979R979 R1,211R1,211E. & W. CapeE. & W. Cape R49R49 R117R117 R166R166Total RSATotal RSA R1,184R1,184 R3,675R3,675 R4,859R4,859