Forestry and timber manufacturing
operations with primary and
PG Bison harnesses the benefits of an integrated
business model by owning and managing its
own forestry and timber operations with primary
manufacturing and value-adding facilities.
PG Bison services the retail, construction, furniture manufacturing and residential development sectors with a variety of timber products, primarily in southern and East Africa and Australia. This diversity of geographies and sectors supports consistent underlying demand through the business cycles.
The South African markets continue to evolve, with consolidation taking place in the DIY retail sector and fragmentation taking place in the furniture retail, construction and development, merchant reseller and manufacturing sectors. This has resulted in the market requirements in terms of product range and service offering also evolving. PG Bison, through its continuous investment in product development, marketing activities and manufacturing technology, combined with integration into key raw materials, is well positioned to capitalise on this changing environment in order to continue its growth.
The Integrated Timber division performed well for the year, showing 7% revenue growth to R3 362 million from R3 139 million in the prior year.
The division continued to implement its strategy of increasing its volume capacity and its value-added product and service offering, with investments in product development, marketing, supply chain, capacity expansions and new technology during the year. The recently installed continuous particleboard press line at its operations in Piet Retief operated ahead of expectation for the period in terms of volume and efﬁciency. The division successfully completed and commissioned an additional upgrade to its MDF (medium-density ﬁbreboard) line in Johannesburg during January 2018, facilitating volume increases across a broader range of board thicknesses. Sales were supported by a signiﬁcant investment in new product launches and marketing activities during the year.
The southern Cape forestry, sawmilling and pole operations performed well for the year in spite of the signiﬁcant distraction of managing the impact of the recent ﬁres in the region and the drought in the Western Cape, which affected demand for its products.
PG Bison’s operating proﬁt grew by 20%, with the obvious margin expansion being a direct result of the above-mentioned activities.
PG Bison’s access to key raw materials, in the form of timber from its own plantations and its own manufactured impregnated paper and resin from the group’s Chemical division, remains a long-term strategic imperative that mitigates against anticipated timber supply constraints in South Africa and upward raw material pricing pressure. The focus of the division remains on providing value-added products and improving operational efﬁciencies through investing in technology and creating a culture of innovation.
While market conditions are expected to remain challenging in the near future, the division’s recent investments in the replacement and expansion of primary plant to manufacture particleboard and MDF, as well as upgrading plant to add value to these products, together with its continued investments into its products and marketing activities, will continue to drive growth in market share, revenue and operating proﬁt.
PG Bison remains committed to growing its supply of products into non-South African territories in order to facilitate a sustainable and diversiﬁed revenue base and to promote economy of scale beneﬁts at its operations.