CrickMay Supply Chain Evolution

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Forestry Sector

Some of our clients
Mondi Business Paper
Forestal Oriental
Hans Merensky
Mondi Shanduka Newsprint
 Department of Water Affairs and Forestry

Crickmay’s involvement in the timber industry started with its 20 year association in this industry, representing 20 million tons of timber per year.  They have also been involved in the Uruguayan timber industry since February 2004 and this has been characterised by innovative thinking.

By understanding the challenges, Crickmay has helped advance these industries through its supply and demand studies, initiation of the Forestry Contractor Productivity Initiatives and more recently the co-development of the Road Transport Management System (RTMS), which realised a 40% reduction in heavy vehicle overloading.  The implementation of the logistics improvement process with Forestal Oriental (Uruguay)  has had a significant impact with a 50% reduction in vehicle fleeting being achieved.

"Crickmay & Associates has produced a comprehensive report on Commercial Roundwood Supply and Demand in South Africa for the period 2008 to 2038 which should be essential reading for timber industry stakeholders. It forecasts a widening gap between supply and demand, and highlights the key challenges facing the industry. In 2004, Crickmay & Associates produced a supply and demand study of softwood sawlogs and sawn timber in South Africa. In 2005, they expanded this study to project supply and demand for roundwood, chips and wood waste, which included sawlogs and sawn timber. These studies provided the timber industry with a useful insight into the resources available to the industry and provided demand projections that showed a widening gap between supply and demand over a thirty year period.

Subsequent to these studies, there have been significant changes which have and will continue to have an impact on the demand and supply of roundwood. For instance, the changing dynamics of pests and diseases and in particular, the impact of Sirex and Fusarium on roundwood resources; the major fires experiences in 2007 and 2008; the worldwide recession and resulting decline in markets; the experiences of land reform.

The Crickmay & Associates team has now produced a new report which tracks Commercial Roundwood Supply and Demand in South Africa for the period July 2008 to end June 2038, which takes into account all the changes and developments that have occurred in recent years. The authors note that long term forecasts are unlikely to be totally accurate, but they have confidence in the macro view they have come up with in the report. On the supply side, they have calculated a ‘sustainable supply’ projected from known areas, genus and ages based on average MAIs. This projection takes into account increased areas due to proposed afforestation and a reduction in areas due to the phasing out of Pine sawlog areas and implementation of environmental standards, fire and severe weather damage.

A second supply scenario attempts to quantify the effects of climate change and land reform, and is referred to as the ‘likely supply’. Two demand scenarios are provided, based on annual GDP growth rates of 2.5% and 4.5%. The conclusions reached are that demand for commercial roundwood in South Africa, which includes sawlogs, pulpwood, poles, mining timber and roundwood used to manufacture charcoal, will far outstrip supply, with the gap widening going forward. This will provide stakeholders with a sobering view of the timber industry, and highlights the urgency of managing threats and maximising the opportunities that exist to grow the resource."

SA Forestry magazine, June 2010

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