Chemicals, Forestry, Paper and Pulp

At first glance, there is no obvious connectivity between the chemicals, forestry, paper and pulp sector – but closer examination reveals intricate linkages.

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

In terms of its manufacturing activities, this sector was facing challenges due to contractions in demand as a result of poor economic conditions prior to Covid-19. The pandemic will most likely compound these issues and negatively impact employment as it accelerates the fourth industrial revolution with our business and personal lives become increasingly digital.

Requirements around less physical interaction in factories will require innovative responses and environmental responsibility will likely gain momentum as the pandemic has highlighted the need for our planet to be cured.

Opportunities exist in South Africa and across the continent for producers of essential goods linked to purification of water, food production and support of personal care – but even so, the future is likely to include disruptions.

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

Because we recognise the importance of this relatively new sector, we have built a team that understands its key players. Absa’s well-capitalised balance sheet can support their borrowing and trade-related needs, from liquidity to growth funding.

Our presence in the continent, Europe and America assists clients as they explore expansion opportunities outside of South Africa.

Importantly, we also offer strategic advisory to our clients, supporting them in rising to today’s challenges and envisioning tomorrow.