60 years and growing

NCT & its wholly-owned subsidiaries

BAYFIBRE CENTRAL TIMBER CO-OPERATIVE LIMITED (formerly CTC)

BayFibreCTC (Central Timber Co-operative Limited) was formed out of necessity by a group of farsighted timber growers. In the late 1960’s a huge discrepancy in timber pricing developed between processors and private timber growers; wattle could only be sold at firewood tariffs! It was at this time that NCT together with the Transvaal Wattle Growers (TWK) and Natalse Landbou Koöperasie (NLK) agreed to form a central co-operative to cater for private growers’ needs.

BayFibre


However NLK closed its timber division in 1981 and sold its share in CTC to NCT. CTC was registered as a co-operative in 1973 and a 10-year contract was signed with Sanyo-Kokusaku Pulp Company (now Nippon Paper Company Limited) and Sumitomo Shoji Kaisha Limited (now Sumitomo Corporation) to export wattle wood chips to Japan. The new co-operative erected a chipping plant at Cato Ridge and a ship loading facility in the port of Durban. Its first vessel sailed from Durban in 1975. In March 1982, CTC opened its Richards Bay mill and went on to achieve peak volumes in 2004 by exporting 67 shipments (or 2.4 million tonnes).
In June 1996, CTC, Sumitomo and Nippon Paper Industries entered into a joint venture, Forest Resources (Pty) Limited (Forestco). In 2005 Forestco became a CTC-owned subsidiary company with Nippon SC Tree Farms maintaining a preference share interest. Two timber estates were purchased, Longridge Estate (Paulpietersburg) and Lenjane Estate (Vryheid). Forestco played a vital role in strengthening the longstanding relationship between CTC, Sumitomo Corporation and Nippon Paper Industries.
In 2008, sole members of CTC, NCT Forestry and TWK resolved to end their co-operation in the mill whereby the whole of CTC was purchased by NCT, who simultaneously sold a portion of the Richards Bay wood chip business to TWK. The assets sold to TWK consisted of one chipping line and two wood chip piles. NCT retained a chipping line and chip pile and a number of farms and leases on which there are 11 000ha of planted forestry land and office property in Pietermaritzburg.
NCT’s portion of the former CTC was renamed BayFibre and is a wholly-owned subsidiary of the co-operative.


SHINCEL (PTY) LTD

ShincelNCT took up a shareholding in another wood chip export company, ShinCel, in 1998 and acquired 100% of the equity in 2006.
ShinCel was established following the unbundling of the timber interests of HL&H in 1996. Mondi acquired HL&H Mining Timber and SilvaCel (the hardwood divisions of HL&H) and Sappi acquired the softwood interests.


Shincel

Three former SilvaCel executives decided to start ShinCel with market support from Oji Paper Company and Marubeni Corporation. (The name ShinCel is derived from Shin meaning new in Japanese and Cel relating to the cellulose content of the wood chips). NCT took up the offer of an initial 45% stake in the business with a limited supply contract for eucalyptus logs. Construction started in February 1999 and ShinCel dispatched its first shipment to Oji Paper Company in November of that year. In 10 years, ShinCel has exported 5.1 million tonnes (or 151 shipments) and continues to make a substantial contribution to NCT’s bottom line.


NCT DURBAN WOOD CHIPS (PTY) LTD

NCT Wood ChipsIn 2003, NCT increased its export activities by investing in its third wood chip processing and export plant in the port of Durban.
Commissioned in August 2004, the mill exported its first load of wood chips to Japan in February 2005. NCT’s partners in this venture, Zululand Chip Manufacturers (ZCM), held 30% equity. NCT became 100% shareholder of NCT Durban Wood Chips in March 2009 when the co-operative purchased the remaining shares from ZCM.

NCT Wood Chips

Construction began at a time of a strengthening SA Rand and challenging environmental demands that included the requirement of an enclosed wood chip storage area. Despite the space constraints of operating in the quayside area of Maydon Wharf, the plant has achieved very positive operational and financial results. This state-of-the-art facility exported its two millionth tonne to Japan in July 2009.


NCT TREE FARMING (PTY) LIMITED

NCT Tree FarmingIn 1988, NCT started a management scheme where landowners received maximum profits from their trees while the day-to-day management of the plantation is carried out by NCT. As more schemes entered the fold, it became necessary to separate these activities from NCT’s other operations.
The result was the formation of a wholly-owned private company, NCT Tree Farming (Pty) Limited in 1996, to manage the Co-operative’s own plantations and those of its members who required this management service.


NCT Tree Farming

Today, NCT Tree Farming manages NCT Forestry’s two farms in the KZN midlands purchased in 1995 - Ingwe (Lidgetton), Enon (Richmond) and a further extensive timber area on leased land in the Baynesfield area. It also manages three ShinCel farms in the Mooi River area and BayFibre farms in Melmoth, Vryheid, Paulpietersburg and Piet Retief. The purpose of these farms is to act as a reservoir of timber in times of under-supply. NCT Tree Farming manages a further 22 member timber farms with a total managed planted area of 25 600ha.


PULP UNITED (PTY) LIMITED

Pulp UnitedIn 2003, NCT formed Pulp United with Sweden’s Södra Cell AB to investigate the feasibility of the construction of a BCTMP (bleached, chemi, thermal, mechanical pulp) mill. The project suffered a setback when the Swedish shareholder withdrew from the joint venture in 2005. NCT opted to purchase Södra’s shares in the jointlyowned company and continued with the feasibility study despite Södra’s departure.
In August 2006, Rottneros, another Swedish manufacturer of market pulp, announced plans to close down operations at one of its mills in Sweden and investigate the possibility of moving all or part of this production to a country with lower electricity prices.
NCT and South Africa presented an ideal opportunity for Rottneros to consider relocation to Richards Bay. In April 2007, NCT and Rottneros signed a Letter of Intent to carry out further research into the possible relocation of the pulp mill to South Africa.
Since then, the project has been successful in obtaining environmental approval, securing a 65ha site for the mill and electricity supply. However a number of outstanding issues still need to be resolved before the project can be implemented.