12 INTEGRATED ANNUAL REPORT 2022 It is perhaps testament to the resilience of mankind that the Covid-19 pandemic has become just another spoke in the wheel of our daily lives. That same resilience is continuously evident within our organisation and our industry. It was another remarkable year for NCT, partly because the ongoing pandemic hardly caused any operational disruptions, but mostly because of other challenges advancing along the queue and demanding attention. No report on the year past would be complete without a mention of the crazy week in July 2021, when day after day of looting and unrest rocked our country. NCT, our staff and our assets emerged mostly unscathed, although we did close all our operations down for more than a week as a precaution against the risks associated with that week of turmoil. The SA Rand put out a remarkable performance for the larger part of the year. After being expected to remain well over R15 to the US Dollar, it peaked below R13.50 before the end of May 2021. It lost some ground again in December, but still it showed us that reliance on SA Rand weakness cannot be a dependable strategy for NCT as we navigate our way through tricky pulp pricing cycles and other world events. The Chinese pulp pricing, often the benchmark for our export markets, peaked in February 2021 at around US$750 per tonne after a shocking performance in 2019 and 2020; then promptly lost ground by almost US$200 per tonne up until December 2021. It has shown some improvement since then, but from what we can see, this is more on the back of supply-chain constraints/scarcity rather than market fundamentals. Paper pricing and low paper demand will continue to pressurise the pulp prices as paper manufacturers struggle with massive increases to input costs from all quarters. Domestic markets have also returned to normal operations and volumes were mostly as expected for the year. The nett result was that our increase in export volumes to above 1.6 million tonnes saw the co-op sell more than two million tonnes of members’ timber (export plus domestic) for the financial year, a number we have not seen in many years. The combination of a strong SA Rand, and lack of market fundamentals to drive our US Dollar prices up in the export markets, did indeed place pressure on our revenue lines. Coupled with domestic pressure from inflation driving factors such as fuel, electricity, maintenance, port, and even labour cost increases, the importance of these two million tonnes in keeping General Manager’s Report DANN Y KNO E S E N
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