| Fri 25 Jul 2003, 15:18 | | ANNUAL GENERAL MEETING: CHAIRMAN"S ADDRESS |
|
YORKCOR: 88TH
25 JULY 2003
York Timber Organisation Limited
Share code:YRK
ISIN:ZAE000008108
It takes about 30 years to grow a tree for a sawmiller. All the trees I am
going to saw have, alas, already been planted. It is different for the many
bright and ambitious young people in the company. We salute them and wish them
luck in their long term future with us. In the light of Yorkcor"s long and
successful 88-year history, however, with hindsight we could say that we ought
to have made a start with planting trees for our business many decades ago. By
now we would have had the benefit of at least three or more rotations. Apart
from the state and the giants in the industry, tree growing did not attract many
diverse private investors. The country and the industry would have been much
better off today if commercial silvicultural had taken on the scale achieved in
the USA, or Australia or New Zealand.
The secret of success in forestry includes dedication, diligence, know how and
almost inexhaustible patience. No one can blame us for trying so hard and doing
so much to make up for lost time. From where we stand today we can say that
Yorkcor has come a long way although, heaven knows, we have yet a long way to
go. I believe that the way forward for Yorkcor will be more brisk, although it
will call for steadfast commitment in the face of new challenges. Had generally
accepted standards of good governance and competent organisation been observed
in managing the process, there would have been a wholesome outcome and the
industry would have prospered.
Many of those who were passive about their resource entitlements are no longer
in business. Yorkcor was amongst the very few who made a stand to protect its
rights to log supply lines. Yorkcor had no wish to be in conflict with the
authorities over this central issue, but it was a case of `yield or your life"
- an untenable choice were it not for the rule of law and our Constitution.
Details of Yorkcor"s engagements in the court are given in our latest annual
report, which is on the table at our annual general meeting today. Only a brief
update is in order at this time.
In March of this year, and quite out of the blue, we were advised by the
Department of Public Enterprises that any party engaged in litigation or
arbitration with the government or Safcol, would not be eligible to participate
in the privatisation process. We were outraged. This administrative action
clearly smacks of discrimination and it was plainly wrongful. The Constitution
guarantees every one just and fair administrative action. We were recently
invited by the government for talks, but unfortunately this lost us time in our
quest for an appropriate solution. The matter is in the hands of our legal
advisors.
Three examples (there are more) will graphically illustrate why Yorkcor could
not brook the interference with our constitutional right of access to the
Courts. On 27 February 2003, the High Court delivered its judgment, declaring
the Minister of Water Affairs and Forestry and his Director-General to be in
contempt of Court and directing, inter alia, the government to pay the costs of
the litigation on a punitive scale. In his judgment, the learned judge said that
the government "seems to have been content to wage this pointless war of
attrition in the courts. This is not how the State should conduct business."
The punitive costs award was to mark the High Court"s disapproval "of the way in
which the State has attempted to avoid its responsibilities in terms of the
agreement."
A second important example has been the judgment of the High Court dismissing
Safcol"s claims that Yorkcor"s long-term sawlog contract (`evergreen contract")
is invalid. Safcol has appealed this decision, but the judgment placed Yorkcor
on a higher moral ground that before. In other High Court proceedings, Safcol
has sought to strike down two of our evergreen contracts. We are confident of a
positive outcome, but where would Yorkcor be if we heeded the directive to give
up if we wish to go for Komatiland?
Finally there is the pending arbitration to be resumed in September 2003. The
government has already admitted liability. At issue is the amount of
compensation that the government must pay for terminating our long term contract
in our York Lumber sawmill near Bushbuckridge. Should we have relinquished our
right to arbitrate the quantum of compensation to stay in the Komatiland bidding
process? Of course not.
In my chairman"s statement for 2002, I said that contrary to superficial
appearances, Yorkcor does not, and does not have to, rely on the Courts and
litigation to make good its business. We have ventured into litigation to dispel
uncertainty, not compound it. We do our shopping for quality sawlogs where the
supply is competitive and where long-standing and fruitful business
relationships are valued.
Your directors are examining attractive options where the experience and
standing of Yorkcor would underpin success in ventures outside the forest
products industry. Nevertheless, we perceive that the effective diversification
of sawlog supply should be pursued as it is a key element of Yorkcor"s strategy.
Yorkcor has in recent times assembled the backing and resources necessary to
mount a bid for the Komatiland opportunity. In the light of the uncertainties
surrounding the Komatiland/Safcol privatisation process, our consortium has
decided to direct our capacities to go for all or part of the other major pools
of softwood resource and processing capacity. We have made direct overtures at
top level and have also had talks with some of the minorities in this regard,
but it is early days yet. We expect that our approach will be seriously
received when we have enough information to formulate a firm bid.
In the meantime I can report that your directors are delighted with the two
acquisitions made late last year - Roburnia Forest Products and Golden Rhino
Lumber. High on the list of benefits for the group is that these operations do
not rely on supplies from Safcol (Komatiland) or the State, but on diverse tree
growers with pride and independence in their way of life.
Finally talks are taking place to strengthen the composition of Yorkcor"s Board.
The changes contemplated will reflect a strong empowerment element and access to
significant financial muscle. At this stage, no more should be said than watch
this space.
Solly Tucker
Yorkcor Park, 86 Watermeyer Street, Val de Grace, Pretoria
Ends
ISSUED Yorkcor Limited
FOR :
CONTACT Solly Tucker 012 804 9730/083 456 9900i
:
FAX NO 012 804 8611
:
E-MAIL sol@yorkcor.co.za
:
WEBSITE www.yorkcor.co.za
:
ISSUED TISH STEWART PR ASSOCIATES
BY :
CONTACT Tish Stewart 011 325 4195 Cell: 082 443 6399
:
FAX NO 011 325 4199
:
E-MAIL tish@tspr.co.za
:
DATE : 25 July 2003
Date: 25/07/2003 02:41:58 PM Supplied by www.sharenet.co.za
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