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South African Forestry Company (SAFCOL) is the Government's forestry company, conducting timber harvesting, timber processing and related activities both domestically and internationally. It is undergoing a strategy review for its eventual disposal.

The Minister of Public Enterprises announced during March 2007 that Komatiland Forests (KLF) should be disposed of as a going concern by early 2009. It was also envisaged that SAFCOL would be wound up by 31 March 2009. In his announcement, the Minister indicated that the SAFCOL Board of Directors would be responsible for overseeing the process and should advise Government on the structure of the transaction within the transaction guidelines and principles laid down by his Department.

Guidelines developed by the Department of Public Enterprises, setting out the goals and objectives for the privatisation of KLF and the winding up of SAFCOL were received during August 2007. SAFCOL appointed legal and transaction advisors to perform a thorough due diligence and to develop a preferred transaction design for consideration by the Board and submission to Minister Alec Erwin, the sole SAFCOL shareholder on behalf of the State.

After submission of the first draft transaction design to the Minister which highlighted the need for and increasing role of communities, it was clear that certain key issues which could have a major impact on the privatisation of KLF should be addressed before decisions could be made on the way forward.

The future outlook for SAFCOL encompasses the design of a transaction that will ensure its continued contribution to the sector in terms of:

  • Addressing structure and regional dominance issues.
  • Efficient market operation which will ensure equal access for all market particulars to the raw material.
  • Maintain sustainable management of the forests & other assets until transfer is complete.
  • Prepare KLF for a smoother transition to the private sector, contribution to the growth and development of the second economy.
  • Prepare SAFCOL for eventual winding down.



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