Post: Forestry At A Crossroads: Tracking Transformation In 2025

November 17, 2025

Forestry At A Crossroads: Tracking Transformation In 2025

By Khosi Mavimbela, Forest Sector Charter Council Executive Director

When the President announced the creation of a R100 billion Transformation Fund in this year’s State of the Nation Address, it sent a strong message: inclusive growth remains at the heart of South Africa’s future.

For the Forest Sector Charter | Council (FSCC), now in its 16th year, the annual State of Transformation Report is more than just a tick-box exercise. It is a barometer of how well the Forestry Sector is living up to its promise of creating opportunities for black South Africans, women and rural communities through Broad-Based Black Economic Empowerment (B-BBEE).

The latest report, covering the 2024/25 financial year, reveals both progress and pain points. While the Sector has managed to maintain a Level 3 B-BBEE rating for the third year running, deeper analysis shows uneven transformation, stubborn structural barriers and a clear need to move from compliance to recording impact.

FALLING SUBMISSIONS AND AN UNEVEN PICTURE

One of the most worrying findings is a 17% drop in reporting, particularly among Exempted Micro Enterprises (EMEs). These are the very small businesses – often rural, black-owned operations – that should be the lifeblood of transformation. Reasons range from business closures and mergers to economic pressures and disillusionment about whether compliance brings real benefits.

Contractors and Growers dominated submissions, while Pole Producers and Sawmillers remain almost invisible in the reporting cycle. The FSCC acknowledges that this limited view may not reflect the true scale of activity in the Sector and plans to work more closely with sub-sector associations to close the gaps.

THE ROLE OF MAJOR PLAYERS

Medium & Large Enterprises (MLEs) – are critical to forestry transformation because of their purchasing power, supply chains and ability to invest in communities. Encouragingly, 38 verified scorecards were submitted in 2024/25, the highest in three years. Fibre-related companies led the way, while Charcoal Producers lagged behind across almost every measure.

OWNERSHIP: PROGRESS BUT GAPS REMAIN

Ownership is one of the most visible signs of transformation, and here the Forestry Sector has made modest gains. Black ownership rose to 41%, comfortably above the 30% target, but down nearly 9% from the previous year. Black women ownership sits at just 18% and black designated groups at 13%, well below expectations.

Fibre, Growers and Contractors outperformed other sub-sectors, in the Ownership element while Charcoal Producers once again made no measurable progress. Most companies used the “flowthrough” principle for ownership calculations, aligning with the codes, but some struggled with the Net Value indicator – leading to downgrades on their B-BBEE level scorecards.

MANAGEMENT CONTROL: THE STUBBORN STUMBLING BLOCK

If Ownership is a glass half full, Management Control remains nearer to empty. Sector compliance sits firmly at around 50%. Black women are particularly underrepresented in senior and executive roles. Although it should be noted that the Contractors and Fibre sub-sectors fared better with black executive directors, but progress is slow elsewhere.

At junior levels, transformation looks healthier, and employment of people with disabilities met or exceeded targets in most subsectors. Yet the lack of women in leadership remains one of the most pressing issues, prompting calls for more deliberate diversity and inclusion strategies. Programmes like She is Forestry SA could be instrumental in building a stronger pipeline of women leaders.

SKILLS DEVELOPMENT: URGENT ATTENTION REQUIRED

With youth unemployment at a staggering 46%, Skills Development is arguably the most urgent transformation driver. Yet compliance in this area has slipped to its lowest level in three years – just 63%.

Although some sub-sectors reported progress in learnerships, pprenticeships and internships, the real problem lies in absorption. Training may be taking place, but very few young people are moving into permanent jobs. Only six of 119 unemployed forestry graduates recently found employment – a shocking statistic that underlines the gap between learning and livelihoods.

There are bright spots. The Forestry Graduate Employment Programme (F-GEP) and the Forest21 initiative, led by Forestry South Africa (FSA) are creating pathways for graduates and entrepreneurs. But uptake is still limited, and unless more companies commit to absorption, the Sector risks training people for unemployment.

ENTERPRISE AND SUPPLIER DEVELOPMENT: SIGNS OF STRAIN

Traditionally one of forestry’s strongest transformation elements, Enterprise and Supplier Development (ESD) has started to wobble. Compliance dropped from 91% to 84%, with Sawmilling trailing significantly.

On the positive side, Contractors excelled in procurement from black-owned suppliers and EMEs, and supplier development contributions exceeded targets in most sub-sectors. But procurement from black women-owned businesses remains patchy, and once again Charcoal Producers and Sawmills struggle to keep pace.

SOCIO-ECONOMIC DEVELOPMENT: A CONSISTENT STRENGTH

If there is one area where the Sector shines, it is socio-economic development (SED). Companies consistently spend well above the 1% NPAT target, investing heavily in rural upliftment. Even Charcoal Producers, who underperform elsewhere, exceeded expectations here.

However, the report stresses the need to connect SED more directly with other transformation elements. Linking community investments to Skills Development and enterprise support could deliver greater impact and sustainability.

STATE AND LISTED ENTERPRISES: MIXED FORTUNES

Forestry giants listed on the JSE continue to set the benchmark, with three maintaining Level 1 B-BBEE ratings. Skills Development and Enterprise and Supplier Development scores were impressive, but only one company fully met the ownership requirements, and Management Control remains weak.

The state-owned South African Forestry Company (SAFCOL) retained a Level 2 rating and has been granted the B-BBEE Facilitator Status, recognising its role in facilitating transformation – both causes for celebration. But here too, learner absorption has declined, reflecting the sector-wide challenge of moving trainees into jobs.

QSES: A TALE OF TWO TRACKS

For Qualifying Small Enterprises (QSEs) – those with a turnover between R10 million and R50 million – the picture is uneven. Overall participation is slipping, with only fifty-three submitted scorecards, reports and affidavits, the majority of which have come from Enhanced QSEs, who are majority black-owned and as a result, have a simplified submission process based solely on an ownership B-BBEE affidavit. This has the unintended effect of masking contributions to Skills Development, Management Control and Enterprise and Supplier Development, as Enhanced QSEs do not need to report on these elements.

Ownership scores look positive overall, with black ownership at 66%. Yet black women ownership sits at just 13%. Only the contracting sub-sector consistently shows leadership across all elements, suggesting a model that others could replicate. Skills Development and Management Control are weak, and socioeconomic contributions have dropped significantly – however, these figures are based on the limited number of Unexempt or Unenhanced QSEs that submitted scorecard reports.

The exemption of Enhanced QSEs from submitting anything other than ownership information and limited number of Unenhanced QSEs reporting means it is very hard to gauge the emphasis that is being placed on the other critical transformation elements. Considering the substantial annual turnover of QSE’s – R10 million to R50 million – this could represent a missed transformation opportunity.

EMES: SMALL BUT SIGNIFICANT

At the base of the Sector are the Exempted Micro Enterprises (EMEs) -businesses with turnovers of less than R10 million. They remain heavily black-owned, with average ownership at 80% and encouraging representation of women (31%) and designated groups (66%).

However, submissions have declined significantly from 100 to 67. Contractors and Growers dominated, while Sawmilling and Pole Producers are absent. The decline makes it harder to track transformation at the grassroots and raises concerns about whether smaller players feel supported. The FSCC hopes its new online reporting system will simplify compliance and boost participation.

THE CHARCOAL CHALLENGE

Across every category, one subsector consistently lags: Charcoal Producers. From Ownership and Kanagement Control to Skills Development and Enterprise and Supplier Development, performance is negligible. The only exception is socio-economic development, where they exceed targets. This persistent underrepresentation and underperformance is now a serious drag on the Sector’s overall transformation score and FSCC plans to work closely with the sub-sector to address this.

THE ROAD AHEAD

The FSCC is clear: transformation is neither a tick sheet nor a numbers game, compliance has to give way to impact. That means measuring not only how much money is spent or how many learnerships are offered, but whether black women are reaching the boardroom, whether small suppliers are scaling up, and whether rural communities are moving out of poverty.

Looking ahead, the Council wants to help companies meet their transformation targets, not simply record whether they do. By focusing on collaboration, accountability and facilitating rather than reporting on transformation, FSCC hopes to help the Sector make real progress to achieving its Level Two.

The 2024/25 reporting cycle highlights a Sector at a crossroads. On the one hand, there is clear commitment to transformation – seen in high ownership scores, strong socio-economic contributions and ongoing investment in Enterprise and Supplier Development. On the other, there are serious blind spots: poor performance on Management Control, low absorption of young graduates, and persistent underrepresentation of women as well as underrepresentation of some sub-sectors.

If the Forestry Sector is to reach its goal of a Level 2 B-BBEE rating, it must act decisively. The recommendations are clear:

Prioritise gender inclusivity with targeted programmes for women in leadership.
Bridge training and employment by absorbing learners into permanent roles.
Support small businesses, especially EMEs, through simplified reporting and stronger partnerships.
Work closely with lagging subsector associations but also hold them accountable for not meeting transformation targets.
Align community investments with broader transformation goals.

As the FSCC shifts from compliance reporting to facilitating, the Sector has an opportunity to turn incremental progress into systemic change. Forestry may be rooted in long-term growth, but when it comes to transformation, the time for action is now.

Source: Forestry In Focus