By ROUX VAN ZYL
Finance Reporter
THE Eastern Cape’s timber and forestry industry is spearheading a rural economic revolution, which has already seen about R2,7 billion in investment in the province and promises to create thousands of direct jobs.
As government’s Accelerated and Shared Growth Initiative of South Africa (Asgisa) starts to gain momentum, one particular area in the province’s north-east, is finding itself on the cusp of new investment.
The Asgisa strategy was announced last year by Deputy President Phumzile Mlambo-Ngcuka and is to target certain industries within the South African economy – including the timber and forestry sector – as priority points for growth to create more jobs and halve poverty by 2014.
As part of this, the small town of Ugie, situated between Elliot and Maclear, has seen investment of R1,5bn by Johannesburg Stock Exchange-listed company Steinhoff, for a state-of-the-art timber processing plant.
Not far away, just outside the Eastern Cape, Kokstad has seen a similar investment of R1,2bn.
Last week residents and officials in Ugie told how they were finding themselves within a massive economic metamorphosis, which had changed the face of the town within a decade.
Property prices have skyrocketed, while retailers said they were gearing up for roaring trade as outside labour started pouring in.
“For years nothing happened here. Now everything is happening at once,” local store owner Glen Venter told a Daily Dispatch team.
Another Ugie resident, retired school principal and farmer Sithembiso Gova, said the new investment was creating jobs for many.
“Not only is Ugie benefiting, but a lot of people from Qumbu, Mthatha and Mount Fletcher come to work here,” he said.
Eastern Cape Premier Nosimo Balindlela announced at a forestry and timber summit last month that another 100000 hectares of trees in the province will be forested in the coming decade.
Most of the forests are situated in the Chris Hani and OR Tambo municipal districts and the premier promised they would create 26000 direct jobs on plantations and 17000 at processing facilities.
Nationwide, the timber industry employs about 170000 people and contributes about R16bn to the yearly economy.
The boom in the timber industry has also sparked development in other areas such as an upgrade of roads, including the new R491m road from Ugie to Mthatha via Langeni.
Eskom also committed R63,3m to build a 66km-long powerline between Ugie and Qumbu to feed extra power into the town.
The local municipality recently announced it would spend R100m to upgrade its water and sewerage infrastructure over the next three years.
The biggest challenge, Balindlela said, was to gain access to communal land in the former Transkei to use for forestry.