Wood and paper (Q3 2015)

  • Sector: Wood and paper
  • Quarter: Third
  • Year: 2015

The industry has seen a degree of recovery from a prolonged slide following the 2008/9 global financial crisis. It contributed 5,5% of total manufacturing production in the third quarter of 2015, up from 5,1% in the third quarter of 2013 but virtually the same as in the third quarter of 2010.

Production grew by 5,1% from third quarter 2013 to the third quarter of 2015, compared to an increase of just 2,0% over the previous three years from 2010. From the second to the third quarter, production rose by 4,3% in seasonally adjusted terms.

Employment was 104 000 in the third quarter of 2015, down sharply from 161 000 five years earlier. Quarterly changes in employment are neither seasonally adjusted nor highly reliable. That said, employment in wood and wood products reportedly fell by close to 20% from 123 000 in the second quarter of 2015.

Capacity utilisation rose in the past quarter, from 83,2% in the second quarter of 2015 to 84,6% in the third quarter. Still, despite the reported spurt in output, it remained lower than two years earlier, in the third quarter of 2013, when it was reported at 85,9%.

Exports of wood and paper came to 5% of total manufacturing exports in the third quarter of 2015, up from 4% two years earlier. They accounted for around a quarter of total production. In dollar terms, exports by the industry came to US$525 million in the third quarter of 2015, up from US$456 million two years earlier. Compared to the second quarter of 2015, they had climbed from US$519 million. In rand terms, exports rose from R4,6 billion in the third quarter of 2013 to R6 billion in the second quarter of 2015, then increased to R6,8 billion in the third quarter. That said, the quarterly trade data are not seasonally adjusted, so the change from the second quarter may not be significant.

Imports of wood and paper came to 2% of all manufactured imports in the third quarter of 2015. They equalled about 22% of local production of wood and paper in the third quarter of 2015, down from 25% in the third quarter of 2013. In current rand terms, they had risen from R4,5 billion in 2013 to R4,9 million in the second quarter of 2015, then climbed to R5,7 billion in the third quarter.

In terms of major projects announced in the third quarter of 2015,

  • York Timbers announced that it would build an electrical biomass power station at its timber plant in Mpumalanga at a cost of R1,4 billion. The plant would deliver 25 MW for the national grid based on by-products from company’s six timber operations.
  • LignoTech South and Sappi are investing R105 million to increase the installed capacity of their lignin plant in KwaZulu Natal by 20 000 tonnes to around 180 000 tonnes.