It has been a year of feast for the timber treatment industry in some of the regions we serve, famine in others and, in South Africa, a period of hanging on tight.
Many of the influences are beyond our control, such as shifts in the global economy and unexpected legislation introduced by national governments. There are some that we can influence, however, and we’re working hard with our customers and industry associations to bring them about.
One is the renaissance in quality that our industry needs to future-proof itself.
“I think the NRCS’s action is starting to have a knock-on effect. Evidently, news about the raids is spreading.”
Feast in Tanzania
Highlights for East Africa included its new standards, probably the best on the continent, and, for Dolphin Bay, the prospect of new customers in other African countries.
Tanzania is one market that saw a feast in 2023, buoyed by strong market demand, reports Dolphin Bay’s Darren Marillier. Several tenders previously published by the Tanzania Electric Supply Company (Tanesco) are now being implemented, so Tanesco is buying large quantities of treated poles.
At the same time, the Rural Electrification Agency is very active, with a big focus on taking electricity to a large proportion of rural villages in Tanzania.
All our customers in Tanzania are very busy supplying treated timber for these contracts. “The market is so strong that everybody has had the opportunity to gain a slice of the action, which has really buoyed the Tanzanian market,” observed Darren.
“The mood is very positive. Everybody is bullish about the current market and the future, although they are realistic in realising the situation won’t last forever. I’m told we can expect three to five years of a strong market.”
Unfortunately, Tanzania’s neighbour Uganda experienced exactly the opposite due to a non-existent local market and unexpected constraints like the ban on timber exports.
The market was stagnant in Kenya as few tenders were published and the new president, Wiliam Ruto, implemented new tax legislation that diminished businesses’ profit margins. The inside story, however, is that the taxes are long overdue and necessary to help fund the national government, so that it can avoid more unsustainable foreign lending.
“The sentiment is that Kenya should start to see the benefits next year when the government has more money to spend – including on electrification projects – which would benefit our customers,” reported Wayne Driemeyer.
“It’s been a long, hard year, but I’d rather be busy and tired than have no business.”
NRCS raids take effect
In more good news, raids by the National Regulator for Compulsory Specifications (NRCS) on illegal treaters seem to have had some effect in the Eastern Cape province of South Africa. “I haven’t seen new illegal treaters popping up in the areas where we travel, and the ones we know of have died down,” observed Braam Rust. “I think the NRCS’s action is starting to have a knock-on effect. Evidently, news about the raids is spreading.”
Nevertheless, the timber treatment market in the Eastern Cape continues to battle, as it did in 2022 – along with most of the South African industry – due to economic hardships, loadshedding, and long delays at the country’s inefficient ports.
New building developments continue to mushroom in the Western Cape, and the agricultural sector in the province had bumper grain crops. “This has kept demand strong for structural timber and treated poles, which is helping our industry in the province,” added Braam.
Timber treaters from KwaZulu-Natal and Limpopo are continuing to make inroads in the Western Cape, putting further pressure on existing treatment plants, “but people are hanging in,” observed Braam. “I haven’t seen any businesses jump out of the market.
“People seem to be getting around the obstacles such as export problems and carrying on.”
The industry in South Africa’s Limpopo province remains stable, thanks to farmers’ ongoing need for shade-netting poles and the demand from games lodges for fencing and structural timber.
The bottom line in most of the regions we serve is that economic conditions are hard, and we’re all having to work harder and smarter to endure.
Shots of dopamine
When we tackle things that make us anxious head-on and are successful, it releases dopamine in our brains,” Wayne reflected. “I read recently how addressing difficult issues gives you an ‘up,’ so that tackling negatives becomes a little easier and ends up becoming part of your psyche.
“This might be one of the reasons that South Africans are such positive people, and what makes us resilient. We’re getting a lot of dopamine!”
Too much stress is bad for anyone, of course, depleting our reserves of every good brain chemical. Nonetheless, the resilience Wayne refers to is much needed. Business in KwaZulu-Natal, Swaziland and Mpumalanga has become tougher this year, reported Mark Duckham. “The market is slightly down compared to previous years, with lower margins, which has tested some of our business relationships.”
Customers are concerned about a deepening culture of corruption in South Africa, which affects standards across the board, and the growing mafia culture. “Nonetheless, there’s a lot to be thankful for,” said Mark. “We’ve still got business; we’re still operating. Things have been tight for some of our customers, but none of them have folded. It’s been a long, hard year, but I’d rather be busy and tired than have no business.”
Speaking more broadly, a major highlight for Dolphin Bay is the positive feedback we’re hearing from our clients about the services we offer. In the rare instances where one or two customers leave Dolphin Bay, they are now returning, realising that the service they received from us is unmatched.
This is heartwarming to us, as we put enormous amounts of effort into our customer support. This is sometimes overlooked in favour of a short-term perceived gain, only for the ill effects, which come at a much higher cost, to be seen later on.
We will continue to serve you all, heart, and soul.