COMPANY PROFILE
2014
Montigny Investments
+268 7602 2155 | www.nhrinvestments.co.sz
company profile
The Montigny approach Production: Ajuanne Payne Editorial: Tim Hands Montigny Investments was founded in 1997, as a small saw-milling and timber trading business, supplying timber to just one mine, and has grown in the intervening years into a multi-faceted, diversified international organisation, now with an annual turnover in excess of R 800 million. Committed to sustainable forestry practices, the company believes in expansion through education, integrity and innovation, utilising as much of the harvest as possible to ensure environmental security as well as creating value for suppliers, customers and stakeholders.
A proudly Swazi company, Montigny Investments has been growing aggressively since its inception, owning and managing its own plantations and beneficiating most of the timber felled therein. “The story of Montigny is really the story of Swazi businessman, Neal Rijkenberg,” states Executive Director of Montigny Investments, Andrew le Roux. “After completing his agricultural diploma, in 1997 he started trading timber grown in informal wattle jungles on Swazi Nation (communal) Land. Wattle is an invasive species, and for many of these rural communities it was both a sustainable income stream and an environmental benefit. Neal grew this business and subsequently started buying his own farms, diversifying into saw-milling and other tree species like gum and pine.” With its beginnings then very much as a ‘one man show’, from the back of a van on Rijkenberg’s mother’s farm, thanks largely to its founder and CEO’s leadership
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and entrepreneurial skills, the company is now the single largest private timber owner and trader in Southern Africa. At present, Montigny owns and manages in excess of 50 000 ha of timber, three sawmills, two chipping operations, a chipboard plant and the villages of Bhunya and Mhlambanyatsi. A central principal underpinning Montigny’s philosophy of “We Add Value”, is a strong focus on maximising the value of every part of every tree. Exemplified by the recent addition of a chipboard plant to one of its sawmills, this approach allows for the complete on-site utilisation of waste products and residues, both from its mills and the waste which is generated from the saw-milling and forestry processes. Le Roux explains this further: “This is really just an approach of looking at forestry a bit differently to many of the regional operators, where the tendency is to try and sweat the assets as much as possible within a given industry, be it saw-milling or board manufacture, which
Montigny Investments
invariably leads to massive losses on the whole tree. The saw-milling industry traditionally produces about 50% waste during the milling process. This is usually sold as low value sawdust or chips - often merely recouping transport costs.” While this might be acceptable from a saw-milling perspective, Montigny chooses to look at the issue from a tree perspective, whereby 100% of the product can be processed and utilised - at the best value. “We have set up production lines to accommodate exactly this maximising process,” details le Roux, “and with our extensive market penetration, where we are not dependent on any one product cycle, we also de-risk our business. If we identify a strong structural timber market, we can allocate, say, 48% of a tree to it. Instead of just burning the remainder as waste or transporting it up to 200 kilometres to an independent chipboard plant, we look at how to best beneficiate on site. This might mean producing our own residue board, electricity, or
looking at specialised export opportunities, which helps to reduce costs and risks and increase market penetration, while also proving extremely profitable.” Montigny is the only timber merchant in Southern Africa currently employing this integrated model, at such a scale. And, while the approach requires a higher standard of management, it quashes the industry norm of producing a single core product, which is both less profitable and leads to huge waste of the parts of the tree not regarded as core to that particular process. It also further exposes these businesses to the extreme cyclical nature of the timber industry. Montigny recently completed the purchase of Usutu Forest Products Company Limited from SAPPI Limited. This transaction includes all of the plantations, the pulp mill site and the villages of Mhlambanyatsi and Bhunya. The pulp mill was closed and decommissioned after the catastrophic fires of 2008. Le Roux explains the rationale behind the decision
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company profile
to acquire and reposition the business. “From a Montigny perspective, our turnover has always been disproportionate to our timber holdings. We were seeing very high turnover, but relying heavily on purchasing timber from other estates or importing it from South Africa. This was always a point of vulnerability, and the one real disparity we always had was between our turnover and our plantation ownership. Purchasing Usutu corrected our timber base, so we now have enough timber on a sustainable rotation, which was really objective number one achieved.” The sale, having been subject to stringent preconditions, a strict due diligence process and a vigorous consultation process with all relevant stakeholders, has reached completion, the transaction has now been closed and effective control and management has been transferred to Montigny. “From a SAPPI perspective,” le Roux continues, “this transaction represented the sale of what really was an awkward asset for them. SAPPI is moving away from
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pine and focusing on gum because of their recent move towards organic cellulose and less on paper and pulp, so for them to own a pulp mill that was too old and small in a neighbouring country that was primarily dependent on pine just did not fit with their strategic plan.” The catastrophic fires in the vicinity, the latest of
“Purchasing Usutu means we now have enough timber on a sustainable rotation”
Montigny Investments
WE TAKE THE LEAD & DELIVER BEYOND OUR CUSTOMERS’ EXPECTATION Sitsembiso Carriers Pty Ltd is a transportation Company based at Mpaka in the outskirts of Manzini Swaziland. Sitsembiso Carriers is a wholly Swazi company established in 2009. Our Major activities is centered around the transportation of Wood Chips, Coal, Wood Logs and General commodities.
RELATIONS WITH CLIENTS Sitsembiso Carriers (Pty) Ltd values the relationship it has with each and every client. We strongly believe that this close relationship we have with all our clients is essential for the success of every project undertaken. It is our motor to work with every client to ensure that any inevitable challenges are overcome, and production targets and promises are met on time and within budget.
Phone: (+268) 23333 408 Fax: (+268) 23333 409 P.O.BOX 143, MPAKA, L304, Swaziland AUG 14 PAGE 5 sitsembisocarriers@swazi.net
company profile which came about in 2010, meant a strategic decision was presented between reinvesting and reconstituting the asset, or finding a buyer for it. “For them it made sense, and I truly believe they got a very fair price for it,” states le Roux, “but the main winner from this acquisition really is Swaziland. The story here was all about bringing Usutu home for good. It was founded and owned by the Commonwealth Development Corporation for many years, but it has always been a strategic Swazi asset. It constitutes four percent of Swaziland’s surface area and covers 32 chieftaincies therein – it is seen as a national treasure and we felt it important to bring it back under Swazi control and ownership.” Maximising the potential of this recent acquisition is, understandably, central to Montigny’s plans for the coming years, with the goal being the full integration of the processes of the two businesses. “Alongside this, however,” continues le Roux, “is a desire to fully engage our communities, which for us is critical to our operations. Fire remains one of the biggest risks that we face, and our need therefore is to actively and proactively work with the communities around us both to uplift the people living there, through direct giving by allocating a percentage of turnover to social projects, and secondly to make them stakeholders in the process.”
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Two phases of development aim to further cement Montigny’s position at the forefront of the timber market and massively increase its footprint, as le Roux explains. “We are also looking at reconstituting what was the old pulp mill plant, and turning this into a diversified timber processing zone. This will give us extremely low logistics costs, compared to our competitors, and will turn the old pulp mill site into the largest, diversified sawmill and timber processing site in Southern Africa - including wet-off-saw and structural mills, a residue Board Plant, energy production and downstream manufacturing. Additional to this, is to grow the current timber holdings on the Usutu estate, from around 42,000 hectares, to an eventual area of 57 000 hectares.” Phase 3 will include property developments in the villages of Bhunya and Mhlambanyatsi.
Energy “At Montigny we believe that we are a future sustainable and renewable-energy company. Swaziland currently produces enough timber and sugar residues to provide for all of our current energy requirements. We believe that Swaziland can be the first country in the world producing all of its energy requirements from sustainable, renewable energy resources, totally independent of fossil fuels.”
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Montigny Investments
Pressure Treated Timber Timber with a moisture content below 20% cannot rot. This may not always be possible when used outside in exposed conditions as it requires proper application and maintenance of a suitable penetrating and water repellent wood sealer.
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The options are to use either naturally durable but expensive exotic hardwoods, or less costly locally grown non-durable Pine or Eucalyptus (gum) timber or poles, that have been pressure treated with a suitable wood preservative to the desired exposure or hazard class. The H class system is a guide to help you buy the correctly treated timber for your project. Be sure to look for the required H class on the timber as well as one of the two quality marks given below.
Sustainable Timber Resource Timber is the most sustainable building product available to man. It’s naturally renewable. Over 90% of plantations grown in South Africa are FSC certified.
Hazard classes: H2— dry interior above ground H3— exterior above ground H4— in ground contact H5— in contact with fresh water and wet soil H6— in contact with marine waters
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For more information on preservative treated timber, or where to find a SAWPA member contact us on 011 974 1061 or sawpa@global.co.za or visit our website at www.sawpa.co.za A member of sep 14 PAGE 7
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