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TRANSCRIPT
JANE MOLONY EXECUTIVE DIRECTOR
PAMSA
PARLIAMENTARY COLLOQIUM ON BENEFICIATION 2 SEPTEMBER 2014
Outline
• What is PAMSA?
• Role of IPAP
• Products and Process
• Production inputs and costs (energy, labour, material, transport)
• Downstream beneficiation
• Facilitating local beneficiation
• Improving global competitiveness
About PAMSA • Formed in 1992
• Promotes interests and efforts of South African pulp and paper industry
• Members – Kimberly-Clark, Mondi, Mpact, Nampak and Sappi. PAMSA representation is 97% on turnover, 98% on production, 99% on forex.
• PRASA part of PAMSA – MOU with SATMA
• Common platform for development and presentation on pre-competitive industry issues – energy, environment, recycling, education, research etc
Role of IPAP to date
• First step to beneficiation is to plant trees – they are a crop not a naturally occurring resource.
• Role of IPAP to be commended – long recognised blockages to doing this.
• IDC – R20m for EIAs* for small growers in E/Cape.
• Right focus but need to move on from here.
*Environmental impact assessments
Traditional “paper” products Printing /writing
Traditional “paper” products
Packaging Tissue
Lesser known uses for wood fibre
gypsum boards fertilisers cement
dust control binders carbon black
Cellulose
Lignin
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total sales value (R millions) by segment PULP
PAPER
PRINTING ANDWRITING GRADES
PACKAGING PAPERS
TISSUE PAPERS
Total sales value in Rands since 2003
% rand value growth per year
• Pulp = 33.2%
• Paper = 5.2%
– Printing and writing = 1.9%
– Packaging paper = 8.0%
– Tissue paper = 8.9%
• Growth in packaging and tissue consequence of socio economic growth – sustainable.
Value-add of industry
• Food security and preservation – Export products
– Goods in transit
• Social – Marketing, advertising, correspondence
– Travel and tourism
• Educational value-add – Education and learning
– Increase literacy
Stages of manufacturing
Source: Sappi
Considering the impact of cost drivers. What can industry exert control over?
34.3%
12.7%
13.2%
15.1%
11.0%
13.6%
Estimated industry cost structure
Fibre
Chemicals
Utilities - all
People costs
Variable selling (includestransport)
Maintenance & other
Increasing cost of energy
TODAY TOMORROW
Eskom’s tariff application will lower SA’s primary and secondary sectors’ ability to compete internationally. Source EIUG January 2013
Will drive unemployment and impact on SA’s exports and balance of payments
How will SA compare?
Cogeneration & renewable energy
• Combined heat and power
• 40 to 60 % less carbon intense
• Low hanging fruit – waiting since 2012 for Co-gen programme
• Improve ability to sell power to 3rd parties, not only to Eskom
• Encourage projects through tax breaks against clear energy self-sufficiency targets
Challenges to sector competitiveness
• Fibre supply
• Administered pricing –Freight rail, port,
fuel, water use, property rates, and electricity to name some
• Cost of legislation
• 100,000 hectares – BBBEE transformation charter.
• Foreign subsidy for tree growing – Chile, NZ, Brazil, Australia and China cheap fibre AND new pulp on line internationally commodity price pressure job losses (170 000 150 000)
• Recovered Fibre under stress
Collected 1.2 million tonnes, 62% BUT exports increasing, request for export tax
Critical factors for local beneficiation
• Competitive cost position for manufacturing • Creation of local or export market for products • Access to skilled people • Secure and stable inputs (energy, raw materials, chemicals)
– Fibre – Recovered fibre
• Enabling environment from legislation – fast track exemptions & exclusions – Welcome streamlining of EIA process – Not exclude sector from incentives (eg MCEP)
• Partnership business labour government
Improving global competitiveness
• Infrastructure
• Utilities
• Other i. Avoid Additional taxes: e.g. Carbon tax – cost and role,
municipal rate increases, waste water discharge charge system
ii.Land claims: delayed settlements
iii.Less red tape not more.
Improving global competitiveness
Tariff
heading
480256
Australia Brazil China India Malaysia
5% 16% 5% 10% 25%
Based on FOB valuation:
± 5,8% ± 18,4% ± 5,8% ± 11,5% ± 28,8%
• Other major countries (e.g. Australia, Brazil, China, India and Malaysia apply much higher tariffs than South Africa)
Tariff regime in competing countries
Improving global competitiveness
Process Research Unit
• Chemical engineering university graduates.
• Three years. 22 students. 21 MSc research projects.
Shrinking markets - digital. High energy costs. Sourcing raw materials. Climate change.
Innovation. Partner with DST – Sector Innovation funding – await finalisation.
Extracting full benefit of the tree.
Research and development
Research PAMSA has supported 21 MSc research projects since 2010
• Use of mill sludge
• Fibre fractionation
• Fresh water use reduction
• Production of bio-oil from pyrolysis
• Biomass gasification
• Fibre sludge to ethanol
• Lignin to bio-material
• Sugar extraction and use
• Char characterisation
Innovative uses for fibre
Isoprene Char
Bio-oil
Bio-renewable chemicals
Bio-fuels
Iso-butanol
Summary
• Forest product sector – good for ‘SA inc.’ • Timber and paper – both strategic resources • Value add – paper products are an enabler • Carbon benefit/sequestration – carbon tax liability • Give back to communities – settled land claims • Train entrepreneurs – 3000 paper recycling • Circular economy • Assist security of power supply • Develop new products & uses for fibre
Let’s work together on beneficiating
our fibre for a sustainable industry.
Thank you