Montigny Investments started life in 1997 as a small sawmilling and timber trading business, supplying just one mine, and has since grown into a diversified international organisation with an annual turnover in excess of R800 million. Committed to sustainable forestry practices, the company believes firmly in utilising as much of the harvest as possible to ensure environmental security, as well as creating value for suppliers, customers and stakeholders.
“In a nutshell, Montigny Investments is an integrated forestry business based in Swaziland, focussing on plantation growing and sawmilling,” explains Andrew le Roux, Executive Director of the company. Since its inception in 1997, Montigny Investments has grown from a small sawmill supplying timber to just one mine, to a multi-faceted organization, offering both timber and mining products to customers in Swaziland and internationally. Montigny has expanded over the years to include ownership of four sawmills producing a variety of products, with principal clients including the planking industry, charcoal consumers and paper manufacturers. The addition of a chipboard plant has expanded their market to include furniture makers and construction companies. Currently Montigny owns and manages 80 000 ha of land, 50 000 ha of which is timber plantation.
Montigny is fiercely and famously committed to sustainable forestry practices, and one way in which this manifests is its focus on getting maximum value from the timber at its disposal, ensuring that nothing is wasted in the production process. “What makes us stand out from our competitors is the way in which we add value to every part of the tree,” says Le Roux. “Our point of departure is not to maximise, or to justify our processing operations – rather what we do is look at every tree and decide how best to extract value from it. Depending on that discussion we then decide where to send our fibre. Certainly, this is a novel way of looking at the process, but we see our trees as our primary assets, and it therefore makes sense to work out how best to maximise value from them.”
This quest to use 100% of the product each time is aided greatly by Montigny’s serving a wide range of businesses in many different markets, and having at its disposal a vast selection of products. As Le Roux explains, this “has the added advantage of protecting us against market vagaries and cycles. It’s tougher to manage, of course, but it provides security and it’s highly profitable. Whereas a lot of other growers would extract and utilise 50 percent of the tree’s value, we extract in excess of 95 percent, just because of the breadth of our markets.”
At the top of the value chain, Montigny has significant structural timber market dealings. The company produces highly regulated, high-grade timber planks which are used primarily in the construction industry. They also supply wet-off saw timber, which goes into pallets, crating and furniture manufacture. Montigny is the largest supplier of these timber products in Southern Africa, with a 40 percent share of the market.
Other Montigny products include mining timber, round logs for the pulp market, high quality chips, and biomass for boilers. The construction of its very own chipboard plant has helped maximize the value extraction from each and every tree, as well as residues from the planking process: “We are able to utilise a lot of our own waste in this plant, which means that every part of the tree is used and used effectively, from the quality timber on the inside, all the way through to the sawdust used in the chipboard.” This prudent, product-intensive approach has paved the way for success across the board at Montigny. “We really are performing well at present, and we’ve enjoyed a record year,” Le Roux says of the company’s current health. “This is due to acquisitions as well as organic growth, and improved pricing on our part, so we are very confident at present. Up until last year a significant challenge we faced was that our forestry holdings did not match our turnover, and we were dependent on buying in surplus timber from external sources. We have been able to resolve that over the last year with our purchase of the Usutu Estate from Sappi South Africa, and as such both our turnover and our market penetration are growing.”
In 2014 Montigny concluded the purchase of Sappi’s Usutu Forest Products Company Ltd. “We’d grown somewhat organically from 1997, but the Usutu acquisition was a landmark deal that represented a huge jump for the company and allowed us to get our timber base really secure,” says Le Roux. Since then the company has been knitting together the traditional Montigny and Corporate Usutu structures, undergoing extensive change management to induct teams, integrate systems and streamline processes. “Essentially, we are bringing the Montigny DNA to the Usutu asset, which has been very successful.” The purchase of Usutu also affords Montigny the opportunity to produce more high grade structural timber from its mills. “We want to grow the market in South Africa, Swaziland and Mozambique, which are all under-supplied” adds Le Roux.
The very nature of the timber business means that fire is an ever-present and potentially catastrophic threat. This proved the case at Usutu, when devastating forest fires in 2008 ultimately lead to the closing and decommissioning of the Usutu Pulp Mill in 2010. “Fire is clearly a constant risk to the industry,” details Le Roux. “We’ve learned from the Sappi events and have implemented new fire strategies for the year ahead which we’re confident will help us to manage the risks.” The threat of fire is largely responsible for the state of flux in which the South African timber industry finds itself currently, he explains. “Some of the larger players have really battled with fires over the last two years, and as a result there is much uncertainty surrounding pricing and the availability of fiber.”
Alongside all of this recent growth and expansion, there is still much to come from this forward-thinking, ever-developing company. “We will be looking now to fully integrate the two teams,” details Le Roux when asked of the company’s planned next steps. “We place a lot of importance on human resources. We believe that we can add a lot more value to the people in our teams through better management practices and more effective forestry practices that are aligned with the sawmilling industry, as opposed to the pulp industry, which is what we have inherited. This requires a lot of work but will bear much fruit going forward.”
Diversification of Montigny’s plantings is a further arm of its plans, including black wattle and more appropriate species of Pine and Eucalyptus. “This will open up all sorts of new avenues and markets for us internationally, particularly to Japan. Wattle is also a very good species as a mitigation factor against fire.” Another aim this year is to increase production capacity. “We’re doing a new dry mill that will produce higher-grade timber products for regional markets. We are also going to try and extract more value from our residue, and, as such, we are focussing on energy, and specifically increasing our ability to turn biomass into electricity.”
The sustainability concerns that are at the core of Montigny’s operations, will inform much of the company’s research and development in coming years. “We would like to understand fully the energy landscape of Southern Africa,” Le Roux sets out, “and find truly innovative means of using residue for energy production. It’s not just financial stability that concerns us – we are driven by adding value not just to the balance sheet and to shareholders, but to the communities around us and to the nation as a whole. Swaziland is a small country and we are a significant company within it, so our contribution is important. More than anything else, our mandate is a national one – to make a difference in Swaziland.”