CHEMICALS, FORESTRY, PAPER AND PULP SECTOR INSIGHTS | 12 MARCH 2018

The potential of business in the Chemicals, Forestry, Paper and Pulp sector

Khumbulani Gumede Author

Khumbulani Gumede

Head: Chemicals Forestry Paper and Pulp

SHARE

To the casual observer, there is no obvious connectivity between the chemicals, forestry, paper and pulp sector. But a closer look and study of how these sectors operate and depend on each other will reveal the intricate inter-connectivity that exists in this sector.

The common link is chemicals, which are either a by-product of the other three sub-sectors, or are needed in the manufacturer of the by-products we get from paper and pulp. There are also linkages in either the downstream or upper-stream industries.

It was for this reason that our unit was established in 2017 to provide tailor-made banking and business solutions to clients in the chemicals, forestry, paper and pulp sector. Our strategy is to become a key catalyst for the growth of this sector, which has significant economic benefits for the country, particularly now when the GDP is low and manufacturing capacity is depressed.

There are currently five major players in the sector who form the core of our client base, Synchem, Omnia, AECI, York Timbers and Afrox. We want to develop expertise and presence not only in South Africa – which has the most developed chemicals industry in Africa – but also across the continent.

We aim to do this by following our clients in South Africa who plan to expand their business into the Rest of the African region.

In the forestry sector this is a long-term business, when you consider that it can take up to 20 years from planting a seed to harvesting a tree. A lot can happen during that period, from diseases, bad weather conditions and natural disasters like fire.

We are therefore in this market segment for the long-term and our role is to partner with our clients to nurture and grow their business. In the pulp and paper sector, the pressure is there to diversify into other products in view of the concern about the environment and the impact of cutting down trees.

The big challenge then, is how we help our clients respond to these developments by diversifying their business model and product profile

And it is also a long-term journey for us. We want to develop solutions for the pulp and paper sub-sector and differentiate ourselves from the market by developing innovative solutions and products for clients.

In conclusion, the potential to grow business in this sector is what excites us most. And as a new unit, we are naturally bullish about the opportunities that exist not only in South Africa but across Africa as well.

Khumbulani Gumede Author
Khumbulani Gumede

Head: Chemicals Forestry Paper and Pulp

Related Articles

DEALS

Funding that makes a shared future possible

Funding partner to Heirs Holdings and Transcorp, for their USD 1.1 billion acquisition of OML 17.

PUBLIC SECTOR INSIGHTS

Infrastructure spend and project execution – priority for government in 2021

“Don’t write the public sector off just yet.” Bakang Letshwiti sees a new tide for 2021 ahead of the ninth annual Beyond the Budget Dialogue event.

POWER, UTILITIES AND INFRASTRUCTURE

Energy and Infrastructure: The African economic multiplier

Forward thinking investors and entrepreneurs in the African energy sector will deliver significant downstream benefits for the continent in the coming years.

MINING INSIGHTS

Sustainable Energy: A fascinating dynamic for the resources sector

Read the article by Shirley Webber that provides key trends that finance and due diligence teams will be monitoring in 2021.