Research on the Performance of the Manufacturing Sector

Wood Product, Publishing and Printing

Overview

The Fibre Processing and Manufacturing Sector consist of 12 sub-sectors. Clothing, footwear, forestry, furniture, general goods, leather, packaging, printing, publishing, pulp and paper, textiles and wood products. Wood products, publishing and printing fall underneath this section, as well as pulp and paper. These products are derived from the primary resources, which is part of the sub- sector Forestry.

The wood products sub-sector makes use of its product by providing materials to several industries, which all processes timber in one form or another. Wood products are diverse in their very nature. These products are used in a number of industries, including the building and construction, furniture, and transport industries.

This sub-sector incorporates activities such as saw milling and preserving of timber, saw doctoring, wet milling, lumber drying, lumber grading, dry milling, finger jointing and laminating, mill maintenance, charcoal production, wattle extract manufacturing, manufacturing of veneer sheets, plywood, laminboard, particle board and other panels and boards, manufacturing of fibreboard and chipboard products, manufacturing of builders’ carpentry and joinery products, manufacturing of trusses, manufacturing of matches, manufacturing of pallets and bulk bins and other articles of wood, cork, straw and plaiting materials.

(Careers in the Fibre Processing and Manufacturing (FP&M) Sector: 2011)

Pulp and Paper Manufacturing

These are also products that are derived from wood and forestry. Most products used every day are made from pulp, paper and tissue products such boxes, tissues, posters, newspapers, books and magazines. The final products made from these raw materials might seem obvious but there are also the less obvious final products made from theses raw materials such as viscose, cigarette filters and detergents.

(Careers in the Fibre Processing and Manufacturing (FP&M) Sector: 2011)

Publishing

Publishing is the process of production and distribution of literature or information – the activity of making information available to the public. Traditionally, the term refers to the production of printed works such as books, magazines and newspapers (print media). Today, with the advent of digital information systems and the Internet, the scope of publishing has expanded to include electronic resources, such as the electronic versions of books and periodicals.

Publishing includes: the stages of the development, acquisition, copy-editing, graphic design, production – printing (and its electronic equivalents), and marketing and distribution of newspapers, magazines, books, literary works and recorded media.

(Careers in the Fibre Processing and Manufacturing (FP&M) Sector: 2011).

Printing and Print Media

The Printing sub-sector is responsible for the printing of newspapers, books, magazines, packaging, labels and other related materials. The printing process is demand-driven and technical. People who are working in this sector must have good sense of colour and be able to manage complex technical processes to deliver against a defined deadline. There are many career areas in this field which range from factory manager, printers mechanic, and printer’s technician through to specialist rotary printing apprentices. The Print Media sub-sector requires occupations such as journalists and authors. Editors who do layouts and ensure accuracy and appropriateness to the marketable audience are also in demand. Generally, people who are good communicators through written media are required in this sector.

(Careers in the Fibre Processing and Manufacturing (FP&M) Sector: 2011)

Value Chain:

Paper making process Wood making process


Forestry:

Water quality, soil stabilization, regeneration, wildlife, harvest techniques, as well as relevant social concerns when growing trees.

Saw mills:

Debarking: bark removal and logs washed.

Mills:

Removing barks from logs, wood is cooked, pulp washed and fibre extracted, fibre converted to paper.

Sorting, grading and drying of the wood

Pulp Production:

Lignin used to dissolve fibres in paper.

Blending and mat formatting:

Chemical process

Pulp Bleaching:

To make the paper white. Adding of additional chemicals.

Pressing of boards:

Automatically or manually

Papermaking:

Pulp placed into a machine where water is extracted and paper is dried. Paper then rolled into a reel.

Board Finishing:

Cooling of boarding and sawing according to size

Coating:

Base paper is coated with and binding agents.

Packaging and sold. This paper can be recycled.

(Who knew paper has a life of its own. 2009-2011).

(Energy conservation in the mechanical forest industries: Descriptions of manufacturing processes)

From the above paper making processes. The paper is then sold and used in the printing and publishing sector for creation of newspapers, magazines, and books etc.

Challenges Affecting Wood Products, Printing and Publishing

Many factors affect the forest production sector.

• 
  Labour productivity decreases by 1.97% 2000-2008 for paper products due to the changes with productivity in this sector (Climate Change Risks and Opportunities for the South African Economy: 2009).
  
• 
  “Of note for employment creation considerations is the fact that the paper and paper products segment is highly capital-intensive. This segment only requires 3.3 workers to generate 1 million Rand in value added. In contrast, 18.2 individuals are employed to provide 1 million Rand in value added in the wood segment10” (Climate Change Risks and Opportunities for the South African Economy: 2009).
  

• 
  Timber supply is affected by timber prices, weather conditions and fires (Climate Change Risks and Opportunities for the South African Economy: 2009).
  
• 
  For wood pulp, the abundance of water, electricity prices, capital investment costs, exchange rates and the level of tariffs on paper are material to wood pulp (Climate Change Risks and Opportunities For the South African Economy:2009).
  
• 
  More generally, proximity to the plantations (a radius of about 100kms in South Africa) is also important because it strongly influences transport costs (Climate Change Risks and Opportunities For the South African Economy:2009)
  
• 
  The new forest growers and beneficiaries of land reform do not necessary have the skills and relevant technology to grow the trees to optimal level requirements (Industrial Policy Action Plan: 2010).
  
• 
  The forestry communities also require business skills to manage their operations effectively (Industrial Policy Action Plan: 2010).Tree planting cannot take place without securing investment finance. Manufacturers have to be a long time in their field before they can ensure long term investments Industrial Policy Action Plan: 2010).
  

Opportunities in the Wood, Printing and Publishing Sector

• 
  In South Africa, whilst production of paper is linked to GDP growth, pulp production appears to be cyclical (Climate Change Risks and Opportunities for the South African Economy: 2009).
  

• 
  The subdued annual (2011) increase was mainly due to higher production in the different sectors. Wood, paper, printing and publishing was listed as one of the manufacturing sectors that increased production over the 2011 (Nedbank Company Report: 2012).
  
• 
  Over the last year (2011), one of the largest increases in production were recorded in the wood and wood products, paper, publishing and printing industry. Production has increased by 10% (Nedbank Company Report: 2012).
  
• 
  Labour productivity has grown, by about 1.7% per year since 2001 over its 2000 level. Firms have strongly engaged in labour efficiency improvements. (Improved relations between wood producers and their workforce possibly underlie these changes.) (Climate Change Risks and Opportunities For the South African Economy: 2009).
  
• 
  Capital productivity has improved markedly since 2000 in paper and paper products (Climate Change Risks and Opportunities for the South African Economy: 2009).
  
• 
  There has also been large amount of investments in wood and paper sectors since 2008 this has accounted to a 6.4% investment increase for wood products.
  

Provinces in which this sector operates mostly

• 
  South Africa has large areas of land under commercial plantations, particularly in KwaZulu- Natal and Mpumalanga (accounting for 38.3% and 40.7% respectively of the total commercial plantation area). The sector is characterised by the dominance of two main players, Mondi and Sappi (Climate Change Risks and Opportunities For the South African Economy: 2009).
  
• 
  Manufacturing of wooden furniture also mainly takes place in the KZN region.
  
• 
  The largest segment of the printing and publishing industry is located in Cape Town, Western Cape. Information and communications technology is one of the fastest-growing sectors in the province. These operations are rapidly being expanded to other provinces (SA Provinces: 2011).
  

Policies Affecting Sector

• 
  Changes in planting legislation, diseases, excess demand on the domestic market for paper and paper products have generated improvements in tree species (Climate Change Risks and Opportunities For the South African Economy:2009).
  
• 
  Issuing of water licenses has become a serious obstacle for forestry
  

Development (Industrial Policy Action Plan: 2012).

• 
  Most of the land that has been identified as suitable land for new forestry is tribal or land belonging to communities where land claims settlement issues still need to be resolved before tree planting can take place (Industrial Policy Action Plan: 2012).
  
• 
  There is lack of proper consultation and mobilisation with communities in line with forestry development protocols (Industrial Policy Action Plan: 2012).
  

SWOT ANALYSIS FOR THE WOOD, PRINTING AND PUBLISHING SECTOR

Strengths Large forestry sector/ plantations. Wood products are diverse. Increase in production. Increase in labour productivity	Weaknesses Maintaining forests is costly Tariffs are increasing Lack of skills technology to grow trees Lack of management skills to run a business.
Opportunities Wood products are used in a number of industries such as: building and construction, furniture, and transport. Communication sector has grown and so has the printing and publishing sector. Paper can be recycled. New communities have the opportunity to enter this sector. Can create jobs in rural communities near forests and manufacturing mills and plants.	Threats Weather conditions in the forest could cause trees to be stunted in their growth Fires could burn down forests. Global climate change. Uncertainty of land claims can halt investment.

Glass and Non- Metallic Mineral Products

This sector comprises of and glass products and of other non-metallic minerals, such as cement. Cement and glass dominate this sector. The sector’s structure is influenced by large firms. South Africa has world class companies in this sector e.g. PG Glass. This sector is diverse and produces a wide range of products; and it is an established source of domestic supply. The building as well at the automotive industry depends largely on this sector (Climate Change Risks and Opportunities For the South African Economy: 2009).

Value Chain

Gathering raw materials: extracted from silica sand, soda ash and lime stone.






Batching: Raw materials are stored in silos. Weighed out and transported to batch mixers according to pre-programmed recipes. Placed into holding bin.





Forming: Molten glass placed into bottle making machine. Shaped and coated with oxide.






Decoration: Bottles are labelled.






Design Process: Custom and standard designs created.







Inspection: Bottles undergo tests and inspections.

Palletising: bulk palletising and shrink wrapping before dispatch and delivery to the customer

Melting: converted to molten glass and maintained at temperatures in excess of 1500ºC and then cooled to 1200ºC.

(The Consol glass making process)

Constraints and Barriers within this Sector

• 
  As mentioned above this sector is influenced by large firms therefore some threats are associated with this structure and with the situation regarding some of the final users of some of the products (e.g. glass for the automotive industry) (Climate Change Risks and Opportunities For the South African Economy: 2009).
  
• 
  The cement sector has insufficient capacity currently; and the sectors need more competition (Climate Change Risks and Opportunities For the South African Economy: 2009).
  
• 
  The global recession has impacted on sales (Climate Change Risks and Opportunities For the South African Economy: 2009).
  
• 
  The motor industry is in a prolonged recession, therefore limiting demand (Climate Change Risks and Opportunities For the South African Economy: 2009).
  
• 
  Tighter credit lines following the banking crisis will make consumers less likely to buy (Climate Change Risks and Opportunities For the South African Economy: 2009).
  

• 
  Due to the fact that there is an increase in investment for a greater variety of products and greater costs for raw materials and energy rise the glass industry is faced with two challenges: on the one hand, market demand must be met, and on the other, cost control must be exerted (Glass focus:2010).
  

Opportunities in this Sector

• 
  The rand is relatively weak plus interest rates and inflation helping exports (Climate Change Risks and Opportunities For the South African Economy: 2009).
  
• 
  Big infrastructure projects will maintain demand.
  

(Climate Change Risks and Opportunities For the South African Economy: 2009).

• 
  Manufacturers diversified and produce not just one specific type of glass but a wide variety, often at a single factory (Glass focus: 2010).
  
• 
  The key to sustain production in the glass industry is through innovation. By introducing new technologies, glass manufacturers can implement their processes more flexibly and more efficiently, improve their product quality, and reduce their consumption of resources (Glass focus:2010).
  

• 
  Another opportunity in this sector lies in the fact that the solar energy industry is growing even more rapidly than the IT sector worldwide. This has driven a rapid increase in demand for ultra white glass used in electricity generation systems (Glass focus: 2010).
  

Policies affecting this sector

• 
  Growing awareness of safety has also driven building regulations for laminated, toughened and fire protection glass, which further enriches the product mix of the industry.
  
• 
  Lawmakers and the general public are also requiring proof that production is not harmful to the environment. In order to save resources and preserve the environment for later generations, the glass industry has to go “green.” (Glass focus: 2010).
  

Provinces in which this Sector Operates Mostly

• 
  The silicia sand, which is the raw material used in the production of glass is found in the Western Cape according to Consol Glass manufacturers (Consol Glass Making Process).
  
• 
  Glass manufacturing seems to be taking place in a few provinces in South Africa such as Gauteng, Mpumalanga, Eastern Cape and Limpopo.
  

SWOT ANALYSIS FOR THE GLASS AND NON-METALLIC MINERAL SECTOR

Strengths The building as well as the automotive industry depends largely on this sector. Big infrastructure project maintain demand. Accessible raw materials. Well developed recycling process.	Weaknesses More competition needed in the market especially for cement. Safety of labourers. Production needs to be done in a careful manner so that the environment is not harmed.
Opportunities Cement and glass dominate this sector. There is a wide variety of glass products to be produced e.g. Glass beads. Innovation to increase demand. New technology introduced. A number of Provinces in South Africa are involved with glass manufacturing. Recycling of glass products.	Threats Large firms control this sector therefore structure of the firm’s influences product, quality and prices. Recession especially the prolonged recession the motor industry is undergoing.