(SAFCOL) and its operations subsidiary Komatiland Forests (KLF) (Pty) Ltd
26 March 2007
Fact sheet
1. In 1997, Cabinet decided that the state should exit from plantation
forestry.
2. To allow the restructuring, the commercial plantation forests of SAFCOL and
the Department of Water Affairs and Forests (DWAF) were separated into five,
geographically logical "packages." Each package was established as a separate
company and SAFCOL acts as the holding company for the state's equity interests
in each subsidiary.
3. During the period 1999 to 2005, a majority equity stake in four of the five
packages, accounting for some 55% of the total forest area, has been
transferred to private ownership.
4. The remaining package that has not yet been sold includes approximately 130
000 hectares of forests, mainly located in Mpumalanga and Limpopo, held in the
SAFCOL operations subsidiary KLF. In addition to its forests, KLF has a small
research and development(R and D) facility, a tree nursery and one operational
sawmill. At present, KLF accounts for more than 90% of SAFCOL's
responsibilities and sales.
5. A transaction which would have transferred majority ownership of KLF was
terminated in March 2006, primarily because of concerns regarding industry
structure and operation of the market for saw-logs. Whilst overall KLF accounts
for only some 3,5% of employment in the sector, it also controls 30% of the
country's supply of softwood saw-logs.
6. As a result of that termination, Cabinet confirmed in August 2006 that the
KLF forests should be retained in public ownership, for the foreseeable future,
to allow time for review of the future role of SAFCOL and of KLF and for
actions to improve industry structure and the working of the saw-log
market.
7. In close consultation with DWAF and the Department of Trade and Industry,
the Department of Public Enterprises has conducted an in-depth review of the
optimum future role for SAFCOL and for KLF.
8. The recommendations of the Minister of Public Enterprises, resulting from
that review, have now been approved by Cabinet.
Issued by: Government Communications (GCIS)
26 March 2007
Source: SAPA
