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Post: Michael Peter addresses SSA AGM

Michael Peter addresses SSA AGM

Michael Peter – SSA address

7 June 2023

Good morning ladies and gentlemen.

What a pleasure it is to be with you here again. It was two years ago when Roy asked me to say a few words about the PPGI and the Forestry Sector Masterplan and so much has happened since then. We were still dealing with the fallout from Covid 19 and its impact on our sector, then we had the failed insurrection orchestrated by the supporters of the convicted criminal, Jacob Zumathen last year we had the devastating floods, followed by the equally devastating Transnet strike and finally enter the era of ongoing and severe loadshedding, which has been particularly damaging to the sawmilling Industry.

Throw into this, the invasion of Ukraine by the psychopath Putin, which has driven up fuel, fertiliser and tyre costs here and around the world and finally our countrys sycophantic behaviour towards Putin, which has hammered the Rand and its enough to make even the most optimistic among us, want to throw in the towel.

I
ll say more about all of these events shortly but one can honestly say that our lives are busier now than they have ever been. I wrote a short reflection for FSA’s magazine at the end of last year and in it I said that it seems that both South Africa and the rest of the world are increasingly troubled by challenging events. We all work harder and longer now, than we have in our entire lives and we are more informed about domestic and global events than ever before.

No
body goes home anymore after work. Work and news of the world go home with us on our cell phones, watches and laptops. They follow us into our living rooms, around the dining room table and they come with us on family holidays. Most of us here today remember a time when families would gather around the television or radio at 18:00 and to hear the day’s news or wait for the morning newspaper to read about it.

Nowadays there is a veritable torrent of
 near realtime information coming at us at all hours of the day and night. We have to set our devices to manage when we receive this information and at times it is truly overwhelming. It also makes it increasingly challenging to sift out what it accurate and useful from the volumes of garbage which is out there competing for our attention and often seeking to distract us from the nefarious intentions of the purveyors of such information. So in all or this chaos and confusion and with all the terrible things happening in our country and the rest of the world, how is it that we manage (most of the time), to stay sane and motivated and should we even be this way?

I think the answer is that as humans we are programmed to survive
 and so we both look for and try to support initiatives which ensure that survival. I’m glad to tell you that there are many such stories and initiatives which I will share with you today, which justify our remaining hopeful for a better future.

I had lunch with Dr JP Landman a few weeks ago, as he was our keynote speaker at FSA’s AGM last month and over lunch, I reminded him of what he had said at our AGM in 2014. He said that if you want to live in South Africa (and I would argue that the same is true of anywhere in this crazy world right now), you have to learn to live with ambiguity. Life is not always a bed of roses.

We have many things to be happy about in South Africa which Ill talk more about too in a moment but we also have some of the most grinding social challenges in the world like our extremely high levels of unemployment. Even for those of us who enjoy a better standard of living in terms of our housing, education and health care, we still live with constant generalised anxiety, caused in large part by what appears to be and what often is grave State failures.

Ours is indeed a country with deep historical challenges but which have been drastically exacerbated over the last 30 years by an increasingly corrupt and selfserving government. One only has to read a few pages of the 996 pages of the Zondo report and you want to despair. have just finished reading Andre De Ruyters book, which in my view is brilliantly written and it makes Advocate Terry Motaus expose into the VBS Bank Heist, read like a children’s bedtime story!

But then we are also a country with social, economic, and environmental benefits and
opportunities, which are the envy of large parts of the rest or the world.

In terms of
 environmental benefits and quite aside from our country’s extraordinary natural beauty which can be found everywhere, from the furthest reaches of Limpopo, through the Western Cape, we can also be grateful that we don’t live in fear of natural disasters, like earthquakes, tsunamis, hurricanes, and volcanoes, which plague many other parts of the world.

Most of the country enjoys a temperate climate, thank God,
 because one could only imagine how much more we would be suffering if we were living in Europe or the US with constant loadshedding in one of their winters.

We also don’t live with the constant threat of civil and international
 warfare like the EU is having to do, because of the actions of deranged people like Vladimir Putin or with the daily fear for our children’s lives from mass shootings and terrorist attacks in schools and places of worship in the global north.

These ar
e things which thank God we don’t have to fear for the most part in South Africa.

As Mohammed Bhabha of the PPGI recently
 said to me, Muslims and Jews in South Africa coexist with some of the lowest levels of Islamophobia and Antisemitism found anywhere in the world. Or more humourously, as the comedian Nick Rabinowitz once put it, there are few other countries in the world, where you can buy a Christian hotcross bun, which is endorsed by both the Muslim Judicial Council as being Halaal and the Jewish Beth Din as being Kosher.

This is South Africa people and there is nothing that we cannot do.

In spite of the best efforts of Jacob Zuma and his thieving syndicates here and abroad, in trying to tear us apart as a nation and get citizens and the media to focus on the things that divide us, so that they can steal hundreds of billions of Rands, most South Africans in spite of our diverse, racial, religious and financial status, speak to and treat one other with dignity and respect.

This is not the case in most other parts of the world and anyone who has travelled to Europe will have been told that we are always spotted immediately, along with those bloody Australians, based on the fact that it is only those cheating bastards and us, who are friendly to strangers. I’m only kidding, we have a great symbiotic relationship with Australia because as one of our members once said to me, every South African who emigrates to Australia, raises the average IQ of both countries.

Anyway this is not a meeting of Greenpeace International or DIRCO, so lets look into some of the more important economic challenges, benefits and opportunities of living in our country, which affect the extent to which local and international businesses invest in South Africa.

In terms of economic benefits and the lifestyle, we enjoy
, who would have conceived of a time when inflation in South Africa was vastly lower than that of the global north. Most Brits and Americans have never experienced double digit inflation in their lifetimes and while inflation is rising in SA, it is still the lowest its been in 50 years. This means it is still cheaper now to buy a house, a car or to fund your business, than most of us have experienced in our lifetimes. UK inflation has just hit 13.8%. Those poor sods dont know what to do with themselves. Tenants are doing gardening a cleaning jobs for their landlords to help cover their rent.

My sister who has lived there for decades and who used to panic (with good cause) about our kleptocratic government, is now contemplating coming back to South Africa. Its not just the cost of living thats getting to them but also the escalating threat of war with that madman Putin. Personally I don’t think he would use nuclear weapons and certainly the Chinese would talk hidown from the ledge, as unlike Russia, they depend on the rest of the world hugely, for their raw material inputs and as a market for their goods. So starting or supporting mutually assured destruction, wont be in their plans, even if like our own idiotic government, they pledge undying
and unreserved support to Russia. I think the Chinese would slip Putin some Cool Aid, before they let him start a nuclear war. But in any event, that potential threat hangs over the rest of the world and its the kind of thing we dont really have to fear.

Before the most recent escalation of the energy disaster, most economists had GDP growth for SA in 2023 forecast around the 2% mark. We won’t end up anything like that anymore and well be lucky to avoid a technical depression, although our last quarter was surprisingly good at 0.4%But compare this again with the rest of the world, where before the Russian war in Ukraine, they were expecting 2.5% growth in developed economies, they are now expecting this to be around 0.5% for 2023.

Cyril Ramaphosas s survival of the attempted Phala Phala coup, has strengthened his ability to get rid of more of the worst thieves and criminals in his top management structure and the State is now working day and night (literally as this is when our meetings with the Presidency take place) to fix the energy, port and rail crises in the country.

F
orestry is represented in Presidencyled task teams working on energy, logistics, crime and human resource development, such is the regard in which key people in government hold our sector and you are all a part of that Sector. We met with and presented to the President a month ago on the challenges and solutions for rail, ports and roads and as a direct outcome of that engagement, in which only four other sector were invited to present, the President is establishing a National Logistics Crisis Committee, similar to what has been done to address the energy disaster in the country. We also met with the Presidential task team last week to go through the
Roadmap and while there will lots of political and social hurdles to climb in restructuring Transnet, it has started and cannot be stopped. It has sound implementation plans for further legislative, regulatory, operational and structural reform in the rail and ports space, again along similar lines to what is being done in the energy space and our sector along with several others are already signing agreements using some of the new legislative provisions.

As a case in point on energy, the removal by the President of all licencing requirements for independent power producers last year, was a critical step to addressing the energy crisis. He did this in defiance of Gwede Mantashe, even though that protectionist idiot, is one of the President’s strongest political allies in his party.

This
 was good news for our sector as it has already unlocked our ability to wheel electricity into the grid and many of our members are already doing so. I was interviewed by Genesis Analytics last week and asked about the Sawmillng sectors ability to support themselves and the country through renewable energy generation. I predicted that we would see a massive rise in this potential revenue stream for the sawmilling sector and I hope that I am right.

We have lobbied the Presidency along with other essential sectors for futher reforms in the energy space and this led directly to him declaring a national State of Disaster for energy and subsequently appointing the Minister of Electricity to drive all of the abovementioned reforms. This was a critical step to get the obstructionist, rentseeking, thieving and sabotaging actors out of the way and to empower the State, to more effectively deal with the “hybrid warfare” as Dr Dries Putter of Stellenbosch University terms it, that is being waged in the energy and other Stateled sectors of the economy, like transport. This hybrid warfare is where the syndicated criminal networks who have been fleecing the country from Zuma’s time want to keep doing so for as long as possible and so they are also waging war on Ramaphosa and those in his government who are trying to stop this. Just yesterday the news broke about a very senior procurement head in Eskom who has been fingered for being one of the chief architects of the ongoing sabotage and subsequent theft opportunities this provides.

While these interventions have yet to significantly reduce the impacts of loadshedding for our Sector and the country, the State finally has a clear energy plan and they are willing to listen to Minister Ramakgopa more than they were to Andre De Ruyter, even though their strategies seem almost identical in rooting out corruption, sabotage, driving renewables etc and the number of IPP projects, has skyrocketed.

The first quarter of 2023 alone, saw 2.5GW of renewable energy projects registered which equates to 2 stages of loadshedding which will be gone forever, once the projects are in full operation. This is 1600% more renewable energy, than that which was registered in the whole of 2021 and this is aft er the first quarter alone. There are another 13GW of renewable energy projects which are close to being registered.

It is also encouraging to note that all of these projects are privately
led and already have funding in place. They are also not susceptible to significant levels of mafiatype behaviour by supplier or theft syndicates which have become so widespread and destructive in the Stateled energy sector and this as De Ruyter puts it, is because the government cannot steal the sun or the windAlso, most of these projects take only months instead of years to complete.

While there is legitimate concern about the capacity and configuration of the grid to wheel all of this additional energy, firstly it’s a nice problem to have and secondly there is also a funded infrastructure plan to deal with that constraint. The Germans are investing R131Bn to assist SA to expand and upgrade the grid. Moreover, there is already a massive and growing amount of ownuse (for businesses and households) renewable energy which has been installed and which does not require additional grid capacity. This has already and will continue to free up additional Eskom energy for other users. Last year there was a massive R5.6Bn worth of solar panels installed but in the first quarter of 2023 alone, R3.6Bn worth of panels were imported. At this
rate there will be three times that amount of solar panels installed in 2023.

I dont want to jinx it but this week we have seen what seems to be a fairly regular reduction in the number and duration of loadshedding events, driven in part by own use generation and by a steady tackling of the challenges at Eskom.

While all this ownuse generation is clearly a financial threat to local government around the country, it is one that cannot be avoided and has the State’s full support, including financial support with the tax incentives which were announced in the Minister of Finances budget speech in February.

As a country, we collected over R200Bn more in taxes than anticipated in 2022 and we are expecting another major excess this year although the most recent figures suggest that it has been tempered significantly.

Importantly, the State has done some responsible things with the budget surplus, like spending a lot of it on reducing the national debt and bringing it down from a projected 81% of GDP to 71% The US is currently more than 120% of GDP and you will have all noted that it has just increased its debt ceiling once again.

We have invested massively in infrastructure and increasing social grants. Now while I have said before that I am not an advocate for social grants, as a sustainable way of helping people and growing economies but when people are genuinely in need, as is the case in South Africa, it is better to give them money directly, then to let a politician help them with some departmental scheme. Recent history has shown us that the politicians, government officials and private sector actors, will steal as much of it as is humanly possible and very little if any will ever trickle down to those who need it. We operate in rural areas so you will all know how the mothers and grandmothers who receive those grants use them wisely to sustain their families and their childrens education. It is not wasted money and it doesn’t make people lazy in a country like
ours. The same is probably not true of the dole in the UK but our poverty is much worse than theirs, so we need the grants until our economy takes more people into employment.

We were also on track to generate a budget surplus this year for the first time in 15 years but with the recent GDP growth forecasts being lowered, this may still be another year or so away.

In terms of our sector, our volumes are the highest they’ve been in years and international demand for our products is so high, that local buyers are battling to secure supply. The sawntimber sector is obviously an exception and so the important initiatives which SSA and the DTIC are driving, along with UP and the GBCSA, to promote a much greater uptake of timber in the built environment, must be supported. I was excited a few years ago about these initiatives and the possible catalytic impact which the Carbon Tax could have in driving them but this is still a nascent industry in the country, so again the work being done with the DTIC is critical. We also need to deal with the chain of custody for quality in the sector and peoples perceptions around
wood.

I recently put a steel carport roof up. I didn’t choose steel, I chose wood and built it 8 years ago and this year it finally fell down, so I replaced it with steel. I had another similar experience with a solar pergola we built in 2010, where the wattle laths on the top were perfect but the treated pine framework also rotted away. Ironically, the tree house that I built for my kids back in 2008, the oldest structure, is still standing and is in immaculate condition. Bruce Breedt of SAWPA has been flagging this challenge for many years and its risk to peoples safety with thousands of RDP houses built with wet off saw of faketreated timber.

At least, unlike in the energy and transports sectors, driving the move from concrete and steel to timber, shouldn’t be as badly undermined by the interests of mafia and syndicates in those sectors but they may still appear if SSA are successful in achieving greater uptake of timber in the built environment.

While we and the rest or the country and the world lost billions to Covid in 2020, had it not been for our government’s willingness to work with FSA and declare forestry as an essential sector, the losses would have been three times larger. Again in 2021, when the supporters of the convicted criminal and former president of this country, Jacob Zuma, led a failed insurrection against the country it was through partnership with government, that we were able to limit the impact of this on our industry, and on many other parts of the economy. Government have also been assisting us, in addressing the ridiculous water licensing challenges for our Sector and for many other sectors in the economy, even though the latest idiotic proposals by DWS on empowerment requirements for water licensing, have been met with strong opposition but remember we are in an election year now, so expect more populist nonsense like that.

Even the DFFE who have been notoriously slow in showing any sort of leadership and support for our sector, have started releasing State plantations in the Western Cape, so that the private sector can partner with communities and the State to recapitalise them. Roy and I have been fighting for that for many years.

Our sector has over the last four years invested over R25Bn in new processing capacity through SAPPI, MONDI, PG BISON and YORK in mega projects and many other smaller companies have done so too. Our transformation performance, one of our pledges in the PPGI, along with investment and job creation, has also objectively improved, in spite of a stagnant economy anthis is in no small part due to the outstanding work being done by the Forest Sector Charter Council under the management of Khosi Mavimbela.

Foreign direct investment is also at record levels, in spite of the fact that the interest rates in the global north should be keeping that money in those countries.

Whi
le we witnessed a rapid decline of State funding into forest R+D and forest protection during the term of office of Jacob the criminal, since then we have secured over R70m from the DSI alone for R+D, including a record R35.2m last year. The DFFE themselves have finally signed the MoA for forest protection, which will see another R9m per year going into forest protection initiatives. These are critically important investments to protect and enhance our sectors raw material and to underpin the massive new investments which have been made by the forestry industry and which require a growing amount of new fibre to support them.

These examples of partnership and support between ourselves as the private sector and the State, demonstrate that not all of government is dysfunctional and that there are growing centres of excellence in most government departments, who share a vision for a growing and transformed country.

In terms of political progress, the ANC managed to get rid of one of Zuma’s top criminal associates, Ace the thief Magashule, as well as that other idiot, Carl Niehaus. Unfortunately for the ANC, the writing seems to be on the wall for their ongoing dominance of the political landscape in South Africa. The Zuma faction’s ongoing efforts to destablise the country and topple Cyril Ramaphosa failed but they have also likely cost their party the election next year.

The delusional Jacob Zuma told us that the ANC would rule “until Jesus comes” and while we haven’t picked up any signs that He’s planning a visit any time soon, the ANC is looking likely to lose their strangle hold over the people and economy of this country next year.

They look set to slip below 50% of the vote in the 2024 General Elections and the media are now predicting that this could be as low as 40%. Personally I hope they don’t lose that much support, only because that means more people who were feeding at the trough, will have to give up their spots and we saw how that ended when the Zuma faction were displaced and their criminal leader was sent to jail for just a short time.

Anything below 50% should be w
elcomed as it breaks the absolute powerabsolute corruption potential and forces them into collaborative and coalition governance. I suggested to a senior member of the party, that this was a good thing as at least there’s COPE as a more moderate potential coalition partner than those idiots in the red overalls but I was pleasantly surprised to learn that COPE are not the only possible match. While ANC politicians in local government, intent on hanging onto local government coffers will back any party on earth, if it means keeping the DA out of power, at the national level, I am pleased to say that the ANC could conceivably go
into coalition with the DA.

When I asked how it would be possible for the ANC to enter into a coalition with their formal opposition party, I was reminded that they formed a government of national unity with the National Party, who were not just their opposition but indeed their oppressors and sworn enemy during Apartheid. This is South Africa so nothing is too farfetched to imagine. Remember the hot cross buns.

JP Landman also suggested that if the ANC drops slightly below 50% that the IFP could also be the logical coalition party, which is also fine but at least the EFF are not even being consideredWeve had just about as much Orwellian political nonsense in this country than anyone can take and fortunately our population aren’t that thick. JP predicted years ago that the EFF would never get more than around 16% of the vote in a general election, so that tells us about our populationtolerance for bullshit politics.

Whatever
 happens next year, nothing is worse for a country, as we have experienced firsthandthan any one party having absolute power and it is looking likely that this will no longer be a challenge for our maturing democracy.

I want to thank you for listening to m
e and to extend our ongoing gratitude to SSA for theiongoing support in all of our engagements with government. Roy fights the good fight with the best of them and he is often a lot more reasonable than I am inclined to be, so we complement one another well in these meetings.

I would like to assure you that we in turn, will remain strong supporters and partners to SSA both in our engagements with the State around energy and logistics and in other initiatives like the Timber Massification programme, as it is in everyones best interests that we work together to promote our sector.

Good luck for a fruitful AGM.

Michael Peter
Executive director of Forestry South Africa
 
 
Michael Peter addresses SSA AGM
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