Forestry South Africa Forestry South Africa Roundwood Sales AnalysisRoundwood Sales Analysisfor the 2014 Financial Yearfor the 2014 Financial Year

Roger GodsmarkRoger Godsmark

Forestry South AfricaForestry South Africa

February 2015February 2015

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

20142014

Salient Points to NoteSalient Points to Note

Tonnage sales of 15.713 mt were 1 239 000 t (+8.6%) higher than in 2013 Tonnage sales of 15.713 mt were 1 239 000 t (+8.6%) higher than in 2013 and 813 000 t (+5.5%) more than the 14.9 mt budget for 2014.and 813 000 t (+5.5%) more than the 14.9 mt budget for 2014.

In comparison to 2013, all species showed increases in sales. Eucalyptus In comparison to 2013, all species showed increases in sales. Eucalyptus sales saw the biggest increase - up 990 000 t (+13.7%) – mainly due to a sales saw the biggest increase - up 990 000 t (+13.7%) – mainly due to a big increase in Euc pulpwood sales. Wattle sales were up 225 000 t big increase in Euc pulpwood sales. Wattle sales were up 225 000 t (+16.0%) whilst softwood sales increased marginally by 25 000 t (+0.4%). (+16.0%) whilst softwood sales increased marginally by 25 000 t (+0.4%).

By product, pulpwood sales showed the biggest increase – up 892 000 t By product, pulpwood sales showed the biggest increase – up 892 000 t (+9.4%). This was wholly attributable to hardwood pulpwood sales which (+9.4%). This was wholly attributable to hardwood pulpwood sales which increased by over a million tons (+14.0%). Softwood pulpwood sales increased by over a million tons (+14.0%). Softwood pulpwood sales actually decreased by 163 000 t (-8.3%). Sawlog sales were 337 000 t actually decreased by 163 000 t (-8.3%). Sawlog sales were 337 000 t (+8.2%) up on 2013 and sales of other products, up 10 000 t (+1.1%). (+8.2%) up on 2013 and sales of other products, up 10 000 t (+1.1%).

Despite the levy being decreased in 2014 to R1.73/t (from R1.76/t), Despite the levy being decreased in 2014 to R1.73/t (from R1.76/t), increased sales resulted in income for the year of almost R26.5m. This increased sales resulted in income for the year of almost R26.5m. This was almost R3.0m (+12.6%) more than in 2013 and R704 000 (+2.7%) was almost R3.0m (+12.6%) more than in 2013 and R704 000 (+2.7%) more than the 2014 budget. more than the 2014 budget.

Tonnage sales started to increase dramatically from the 2Tonnage sales started to increase dramatically from the 2ndnd half of half of 2013. This trend continued during the course of 2014. 2013. This trend continued during the course of 2014.

Roundwood Sales by SpeciesRoundwood Sales by Species20142014

Total Sales – 15 713 000 tonsTotal Sales – 15 713 000 tons

Roundwood Sales by ProductRoundwood Sales by Product20142014

Total Sales – 15 713 000 tonsTotal Sales – 15 713 000 tons

Roundwood Sales by Levy CategoryRoundwood Sales by Levy Category20142014

Total Sales – 15 713 000 tonsTotal Sales – 15 713 000 tons

Pulpwood Sales by SpeciesPulpwood Sales by Species20142014

Total Sales – 10 374 000 tonsTotal Sales – 10 374 000 tons

Sawlog Sales by SpeciesSawlog Sales by Species20142014

Total Sales – 4 438 000 tonsTotal Sales – 4 438 000 tons

Other Roundwood Sales by SpeciesOther Roundwood Sales by Species20142014

Total Sales – 902 000 tonsTotal Sales – 902 000 tons

Sales Comparisons 2014 vs. 2013Sales Comparisons 2014 vs. 2013Product 2013 2014 Diff tons Diff %

Sawlogs: Soft 3 666 775 3 821 046 154 271 4.2%

Sawlogs: Hard 434 145 616 955 182 810 42.1%

Sawlogs 4 100 920 4 438 001 337 081 8.2%

Pulpwood: Soft 1 951 355 1 788 472 -162 883 -8.3%

Pulpwood: Hard 7 530 295 8 585 329 1 055 034 14.0%

Pulpwood 9 481 649 10 373 802 892 153 9.4%

Mng: Timber : 258 853 271 290 12 437 4.8%

Poles :Soft 102 615 112 853 10 238 10.0%

Poles: Hard 367 894 315 067 -52 827 -14.4%

Poles 470 510 427 920 -420 590 -9.1%

Woodchips: Soft 120 175 123 389 3 214 2.7%

Other: Hard 42 015 78 958 36 943 87.9%

Grand Total 14 474 122 15 713 359 1 239 237 8.6%

Roundwood Sales by ContributorRoundwood Sales by Contributor20142014

Total Sales – 15 713 000 tonsTotal Sales – 15 713 000 tons

Roundwood Sales per MonthRoundwood Sales per Month2014 by Species2014 by Species

Highest salesHighest sales -- March March 1 398 000 t 1 398 000 tLowest salesLowest sales -- December December 1 189 000 t 1 189 000 t

Roundwood Sales per MonthRoundwood Sales per Month2014 by Product2014 by Product

Sales in 2014 1 239 000 t (+8.6%) higher than in Sales in 2014 1 239 000 t (+8.6%) higher than in 2013 and 813 000 t (+5.5%) more than budget2013 and 813 000 t (+5.5%) more than budget

Roundwood Sales per MonthRoundwood Sales per Month2014 Budget vs. Actual2014 Budget vs. Actual

Highest surplusHighest surplus -- March March + 156 000 t+ 156 000 tHighest deficitHighest deficit -- December December - 53 000 t - 53 000 t

Contributions Generated by Contributions Generated by Levy Category - 2014Levy Category - 2014

Total Income Generated – R26 481 000Total Income Generated – R26 481 000

Levy Income ComparisonLevy Income Comparison2014 Budget vs. Actual2014 Budget vs. Actual

Income in 2014 R 2 953 000 (+12.6%) higher than Income in 2014 R 2 953 000 (+12.6%) higher than in 2013 and R704 000 (+2.7%) more than budgetin 2013 and R704 000 (+2.7%) more than budget

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

20022002** - 2014 - 2014

* Year in which FSA formed

Roundwood Sales per YearRoundwood Sales per Year2002 - 20142002 - 2014

Full levy tonnage increased by 8.9% between 2013 & 2014Full levy tonnage increased by 8.9% between 2013 & 2014Lower levy tonnage increased by 3.3% over same period Lower levy tonnage increased by 3.3% over same period

Sales Comparisons per SpeciesSales Comparisons per Species2002 - 2014 2002 - 2014

Roundwood Sales 2002 - 2014Roundwood Sales 2002 - 2014EucalyptusEucalyptus

Roundwood Sales 2002 - 2014Roundwood Sales 2002 - 2014SoftwoodSoftwood

Roundwood Sales 2002 - 2014Roundwood Sales 2002 - 2014WattleWattle

Roundwood Sale Comparisons per SpeciesRoundwood Sale Comparisons per Species2014 vs. 20132014 vs. 2013

Up 225 000t

+16.0%

Up 990 000t

+13.7%

Up 25 000t

+0.4%

Overall increase of 1 239 000 000t or +8.6%Overall increase of 1 239 000 000t or +8.6%

Sales Comparisons per ProductSales Comparisons per Product2002 - 2014 2002 - 2014

Pulpwood growth over periodPulpwood growth over period + 53 000 tons + 0.5%+ 53 000 tons + 0.5%Sawlog growth over periodSawlog growth over period + 1 151 000 tons + 35.0%+ 1 151 000 tons + 35.0%MT & Other growth over period + 902 000 tons + 29.4%MT & Other growth over period + 902 000 tons + 29.4%

Roundwood Sales 2002 - 2014Roundwood Sales 2002 - 2014PulpwoodPulpwood

Roundwood Sales 2002 - 2014Roundwood Sales 2002 - 2014SawlogsSawlogs

Roundwood Sales 2002 - 2014Roundwood Sales 2002 - 2014Mining Timber & OtherMining Timber & Other

Roundwood Sale Comparisons per ProductRoundwood Sale Comparisons per Product2014 vs. 20132014 vs. 2013

Up 10 000t

+1.1%

Up 892 000t

+9.4%

Up 337 000t

+8.2%

Overall of increase 1 239 000t or +8.6%Overall of increase 1 239 000t or +8.6%

Levy Income Generated per YearLevy Income Generated per Year2002 - 20142002 - 2014

Levy income in 2014 R2 953 000 (+12.6%) more than in Levy income in 2014 R2 953 000 (+12.6%) more than in 2013 and R704 000 (+2.7%) more than budget2013 and R704 000 (+2.7%) more than budget

Levy Income ComparisonsLevy Income Comparisons2009 - 20142009 - 2014

Surpluses have only occurred in 3 of the last 6 years.Surpluses have only occurred in 3 of the last 6 years.Accumulated deficit over period – R1 765 000 Accumulated deficit over period – R1 765 000

Sales Tonnage ComparisonsSales Tonnage Comparisons2009 - 20142009 - 2014

Surpluses have only occurred in 3 of the last 6 years.Surpluses have only occurred in 3 of the last 6 years.Biggest deficit in 2012 – 865 000 tons Biggest deficit in 2012 – 865 000 tons

Sales Tonnage per ContributorSales Tonnage per Contributor2014 vs. 20132014 vs. 2013

Up 303 000t

+2.6%

Up 74 000t

+13.6%

Up 861 000t

+35.2%

Overall increase of 1 239 000t or +8.6%Overall increase of 1 239 000t or +8.6%

Income Generation per ContributorIncome Generation per Contributor2014 vs. 20132014 vs. 2013

Up R1 184 000

+6.4%

Up R165 000

+18.8%

Up R1 604 000 +39.0%

Overall increase of R2 953 000 or +12.6%Overall increase of R2 953 000 or +12.6%