Ugie is a small town in the Eastern Cape and lies beneath the towering cliffs of the Drakensberg Mountain range on the banks of the Inxu River, just 300 km from the village where Nelson Mandela was born. It derives its name from the Ugie River in Scotland, given by the Reverend Murray who was born in Scotland but later founded a mission station in Ugie in 1863.
On 22 May 2006, agreement was reached between the Premier of the Eastern Cape, the Industrial Development Corporation and PG Bison to initiate
a project that would change the lives of the people of Ugie and its neighbouring town, Maclear. The project would see the construction of a mega factory on the outskirts of Ugie – a state-of-the art particleboard manufacturing and conversion plant. Since its acquisition of the local timber plantations and subsequent to the development of the factory,
PG Bison is the largest employer in Ugie.
The factory was built on 36 hectares of land, five kilometres outside Ugie. During the preparation 380 000 m³ of soil and rock was moved to prepare the area for the construction of the board plant. In total R1.3 billion was invested by PG Bison in phase one of the project to build the plant from 2006 to 2008 with another R26.2 million invested in phase two which included the introduction of a laminate face board production line and a foiling production line in 2012/2013.
The investment extended further than only that of the particle board plant – it included establishing a seedling nursery, extending the existing plantation, timber transport and construction of residential houses, thereby further stimulating job creation.
The opening of the Ugie particle board plant was attended by local and international guests including local and provincial government officials, community leaders, suppliers, customers, media, Steinhoff board members and employees.
The project successfully propelled Ugie to become the pivot point for development in the northern part of the Eastern Cape Province of South Africa. In addition, this development supported the Accelerated and Shared Growth Initiative of South Africa (ASGISA) and is seen as a success story of partnership for both business and local government.
PG Bison, however, could not have effected this massive development on its own; the South African Government played an instrumental role in the development of infrastructure in the local area to facilitate, accommodate and encourage the development of the project. From 2006 to 2011
a total of R130 million was invested in water infrastructure and sanitation projects, road construction, electricity infrastructure, supply and support services and a taxi rank. These developments greatly assisted in making the construction of the PG Bison board plant and the depot a success.
Effect of the development on the community
It is estimated that during the period of construction of the PG Bison Ugie plant, approximately
R1.77 billion was generated in new business in the local economy, which involved the equivalent of 8 964 man-years of labour.
Financial investment and employment is ongoing. PG Bison’s business activities are dependent on permanent employees and a number of contractors and casual workers from the immediate community. As a result, PG Bison’s annual salaries and wages in the Eastern Cape amount to, on average, more than R70 million. Contracts include garden services, waste management, cleaning services, security, road construction and maintenance, catering services and various silviculture activities.
It is also estimated that the operational requirements, to operate and/or maintain the infrastructure developed by government, contributes a further R20 million of new business and 43 man-years in labour across the local economy annually.
* Draft economic impact assessment document commissioned by the Eastern Cape Development Corporation