SA pushes forestry investment

2 March 2007

South Africa has identified the Eastern Cape and KwaZulu-Natal provinces as key for development in the forestry, wood and paper sector, with reforestation a vital part of the strategy.

Business Day reported this week that the government envisages between R20- and R30-billion of investment by the private sector, including the Industrial Development Corporation, over the next five years to develop the economies of the two provinces.

Forestry is one of the sectors identified as a key growth area in terms of the Accelerated and Shared Growth Initiative for South Africa (Asgi-SA), which aims to reduce poverty and unemployment and help the country achieve an economic growth rate of 6% per annum.

In addition, the Department of Trade and Industry (DTI) has drafted a separate sector strategy to deal with challenges facing an industry that has been neglected over the past decade.

According to the Department of Water Affairs and Forestry, the sector employs about 170 000 people and contributes more than R16-billion annually to the South African economy.

Speaking to journalists during the Eastern Cape Forestry and Timber Processing Summit in Mthatha on Monday, Water Affairs and Forestry Minister Lindiwe Hendricks said that developing the industry in the Eastern Cape had the potential to create about 26 000 direct jobs at plantation level and a further 1 700 jobs at processing level.

Business Day reports that up to 15 400 such jobs could be created in KwaZulu-Natal.

“In SA the backlog is bad, as we have not planned new trees over the past decade,” DTI deputy director-general Lionel October said during the summit. “There is the immediate potential for the forestation of more than 100 000 hectares [in the Eastern Cape].”

October told Business Day that while an explosion in global industrial development and construction, led by China, had boosted demand for timber and wood products, South Africa had not taken advantage of this situation.

He said the DTI would work with Water Affairs and Forestry and the private sector to ensure increased downstream processing opportunities for small businesses as well as black economic empowerment companies.

The development of downstream industries will require massive investment, however, and it is hoped that foreign investors will come to the party. According to October, delegations from Finland and Indonesia have already visited South Africa and have shown an interest in investing in the industry.

SouthAfrica.info reporter

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