Unpacking MTO's Journey
For many years, forestry was largely operational as a State Owned Enterprise (SOE), however in the late 1980s a decision was made to commercialise state owned plantations and thus the South African Forestry Company Limited (SAFCOL) was established in 1993. SAFCOL was meant to be the vehicle that would be responsible for commercialising government owned forestry land.
The Boland and Southern Cape plantations were put out to tender by SAFCOL separately. Due to a lack of interest, in November 1999, SAFCOL transferred all the Western, Southern and Eastern (Tsitsikamma) Cape plantations to its entity MTO Forestry (Pty) Ltd. The MTO Forestry package stretched form Longmore near Humansdorp in the Eastern Cape to Stellenbosch in the Western Cape.
The MTO package consisted of land leases for plantations in the Western and Eastern Cape. Exit lease areas comprised of: Grabouw, Kluitjieskraal, La Motte, Jonkersberg, Bergplaas, Buffelsnek, Homtini and Tokai. Sustainable lease areas, which expires no earlier than 2075, includes the following plantations: Jonkershoek, Garcia, Kruisfontein, Keurboomsrivier, Witelsbos, Lottering, Blueliliesbush (now incorporated into Lottering and Witelsbos) and Longmore. Other assets of the package included *George, Longmore and Wemmershoek Sawmills. *The George Sawmill, formerly the George State Sawmill, dates back to the late 1930s.
Privatising MTO Forestry (Pty) Ltd
Cape Pine Investment Holding (CPIH) together with BEE partner Wild Peach Investment Holdings (Pty) Ltd formed Cape Timber Resources (Pty) Ltd, and made a bid for the MTO Forestry package. Following lengthy negotiations, CTR eventually acquired a majority shareholding in MTO Forestry in April 2005.
Cape Pine Investment Holdings
CPIH owned 50% of Cape Timber Resources (which owned 75% of MTO Forestry) in addition to owning Cape Sawmills (Pty) Ltd and Airton Timbers. Cape Sawmills in Stellenbosch was founded in 1946 and known as Bru Ply. The Stellenbosch Sawmill used to be owned by Mondi and was later bought out by Mondi Management. This Sawmill was later sold in 2014. Airton Timbers was established in 1927 and specialised in supplying timber, boards, mouldings and roof trusses. In 1942, Airton Timbers formed part of the Anglo American Group (Mondi Timber Products). It later became part of CPIH and operated as a retail outlet that consisted of forestry, sawmill and value-add products. Airton Timbers was dissolved in 2019 and core competencies were repurposed for other areas of the business.
From 2010, there was a lot of changes including shareholding and acquisitions of various entities.
The Global Environment Fund (GEF) became a majority shareholder in CPIH in 2010. Other shareholding changes included Wild Peach Investment Holdings (Pty) Ltd swopping its 50% shareholding in CTR for a 20% shareholding in CPIH. CTR shares were officially transferred to CPIH.
In terms of new acquisitions, in 2010 Castle Timbers, specialising in high-quality shelving products, was purchased by Cape Sawmills. Following this, GEF acquired acquired Ramanas and Imvelo Forests in the Lowveld between 2012-2014. Pullscar (now known as MTO Poles) is a subsidiary of Imvelo Forests.
MTO continued to diversify its portfolio with the acquisition of the timber/forestry component of Bedrock, which then became MTO Lowveld. Further to this, MTO started to branch out into the agriculture industry with macadamia farms in the Lowveld, and avocado trials in the North.
While ecotourism was always part of MTO’s portfolio, further investment into eco adventures was aggressively pursued. Specialists were brought in to upgrade and market trails for mountain biking, hiking and trail running in the Western Cape (Jonkershoek), the Eastern Cape (Tsitsikamma) and the Lowveld. Other ecotourism activities available include fishing and bird-watching etc.
Another area of diversification for MTO was digitisation. As the world continued to become more digitally focused, MTO looked to find ways as to how digitisation could add value to the business. The result of this exercise was the myMTO mobile application. The project was ambitious, however it was decided that to survive in the competitive digital era, business models need to adapt and evolve. Parts of the myMTO app officially launched in 2018. The offerings of myMTO includes: company news; contact information, policy documents and work update data for staff; highlighting MTO’s ecotourism offerings with convenient online bookings – adventure enthusiasts are also able to track their hikes, rides etc. via the app; training (app features still in development); and the marketplace (still in development) will help to showcase MTO’s value-add products in addition to offering third-party businesses the opportunity to sell their goods.
Training is another area that was targeted for expansion. MTO’s training facilities are located in Knysna (Western Cape) and White River (Mpumalanga), in addition to offsite training capacity. MTO Training offers accredited training in the forestry, agriculture and sawmill manufacturing fields.