| Fri 23 Jul 2004, 13:40 | | CHAIRMANS ADDRESS YORKCOR AGM |
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THE YORK TIMBER ORGANISATION LIMITED - CHAIRMANS ADDRESS YORKCOR AGM
SHARE CODE: YRK
ISIN: ZAE000008108
CHAIRMANS ADDRESS YORKCOR AGM
The address of Solly Tucker, Chairman,at the 89th annual general meeting of the
York Timber Organisation (Yorkcor) held at Pretoria, on Friday 23 July 2004 at
11h30
Comprehensive strategic plan
I am pleased to be able to report that the implementation of the comprehensive
strategic plan for the group recently announced in the Yorkcor`s latest annual
report is now well under way. The plan is designed to take advantage of the
current boom in the economy, especially in the building industry and to counter
the current challenges to the traditional log supply of sawmillers throughout
Mpumalanga and Limpopo. We are harnessing our strengths and resourcefulness to
boost the profitability of our business and build a wider recognition of the
true worth and tradability of the Company`s stock. We must take the current as
it serves.
The need to reposition the Company in the arena of its operations stems from
anti-competitive developments in the privatisation process of the state`s
forestry assets - the Komatiland Bid. It is unthinkable that our system checks
and balances in South Africa could countenance a merger, which will create a
monopoly controlling about 75% of the timber resource in South Africa`s major
log markets. That is what the Bonhheur consortium (controlled by Global Forest
Products) is now seriously seeking to do. That can hardly ever be in the
interest of the consumer who, together with efficient producers, would be open
to unbridled exploitation. No conditions can be stipulated to curb such a
monopoly with such a potential to harm a strategic industry irreparably.
Sawlogs are the lifeblood
Sawlogs are the lifeblood of every sawmill. Already there is an outcry amongst
sawmillers and communities in the affected regions. They represent a key driver
in economic activity in country areas. Should the threatened merger clinch the
blessing of the Competition Commission, casualties in jobs and diversity in the
platteland will be irredeemable. Sawmillers - small, medium and large -
confronted by the merged entity to concentrate access to sawlogs are now
anonymously bringing their concerns to the Commission: anonymously, because they
fear reprisals which would cut off log supplies from their traditional sources
which will now be controlled by a monopoly if or when the merger is sanctioned.
We saw this trouble coming and took decisive measure to counter the harm to
Yorkcor. We were ultimately driven to resort to Courts for relief where our
rights were vindicated. For over half a century our sawmills could operate with
the benefit of indefinite security of tenure. We refused to trade our evergreen
contracts with three-year tenancies. Safcol purported to cancel our evergreen
contract, but in September 2002, the High Court upheld its validity. Persistent,
Safcol has taken the judgment against it on appeal to the Supreme Court of
Appeal. The wheels of justice turn slowly and the appeal will only be heard at
last on 20 August 2004. In the meantime, Safcol has not delivered any logs to
Yorkcor under the evergreen contract, which has given rise to damages claims
filed by Yorkcor. Safcol, on the other hand, has filed money claims based on
the premise that Yorkcor`s evergreen contracts, despite the High Court judgment
in our favour, is not of full force and effect.
War chest - R40 million
We believe that Yorkcor`s cause is just. The fact that most of our
competitors have given up the contractual fight has not weighed with us. We
have never been intimidated by the deep pockets of our giant adversaries. And
now we have a war chest of our own amounting to some R40 million. For as long
as we perceive that our case is sound and success is within reach and, we will
pursue our long standing entitlements.
Our battle to vindicate our resource entitlements is a corner stone of our
strategic plan, it is far from being our sole answer to take advantage of
opportunity and deal with threats.
Roburnia Forest Products & Golden Rhino
The capex program is complete at Roburnia Forest Products, which is
operating profitably, partly because it has the benefit of a log supply from a
small number of competitive growers. We will also soon complete plans to revamp
our plant at Golden Rhino which operates in the same region. Its engineering,
like Roburnia`s, was hampered by pre-acquisition defects.
Sawmilling machines
Our other sawmills are in very good shape and can be said to be operating like
sawing machines.
Forest acquisition
As reported in a recent cautionary, issued by your directors, agreement has been
reached for a modest but significant acquisition of a mature, silviculturally
well managed softwood forest. The vendors are resident overseas and the
technicalities of the transaction have required the involvement of experts in
various disciplines. Whilst we look forward to taking log supplies from this
forest in the near future, we are unable as yet to determine a starting date.
Niche market trading timber
Our business in sawn and processed timber is flourishing. The infrastructure
and logistics of this business is strategically located and the operation is
well placed to grow impressively. What we like most about this success is that
it does not rely on round logs; its procurements and its sales are built upon
the group`s long-standing connections, experience and know-how. We regard this
expanding business as one of the effective hedges against the risk in the
sawmilling industry described earlier.
Exports and imports
A pendulum swing for Yorkcor and other operators depend on whether the exchange
rate of the rand goes up or comes down.The group has delivered a number of
profitable lines imported from abroad. This should provide a useful cushion
against the round log uncertainties described earlier. The importation of
sawlogs is not a proposition at this time.
We have been recently approached by a large Australian company to sell our long
standing, but dormant, investment is a platinum bearing property in the De Wildt
area. A number of high profile mining concerns are prospecting in the vicinity.
Your directors will take advice from knowledgeable people in the industry and
the business when taking a decision. We are also reviewing the status and
prospects of the group`s other dormant assets.
Black economic empowerment
Your directors are giving intensified attention the imperative of black economic
empowerment and hope to be able to make an announcement in this connection in
the not too distant future.
Different and better
We have long ago declared that our aim is, not to be the biggest, but to be
different and better. Ours is a niche strategy and, as the above review shows,
we are judiciously selecting the niches, which will unlock prosperity for the
Company and its stakeholders.
Ends
ISSUED FOR : THE YORK TIMBER ORGANISATION (YORKCOR)
CONTACT : Solly Tucker Chairman : 012 804 9730 Cell: 083 456 9900
FAX NO : 012 804 8611
E-MAIL : sol@yorkcor.co.za
WEBSITE : www.yorkcor.co.za
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : Tish Stewart (011) 325 4195 Cell: 082 443 6399
FAX NO : (011) 325 4199
E-MAIL : tish@tspr.co.za
DATE : 23 July 2004
Date: 23/07/2004 01:19:12 PM Produced by the JSE SENS Department
