Presidency Rapid View Survey
On 8 April, Michael Peter, PPGI co-ordinator for the Forestry value chain, along with other sector representatives were asked to complete a survey providing the Presidency with a ‘rapid view’ of the economic impact of different lockdown scenarios and to gauge safe return-to-work readiness and preparation.
The Forestry Sector has been very privileged to be declared as essential goods and services, but we are nonetheless still severely affected. The information provided will feed into urgent national COVID-19 planning, being co-ordinated by the Presidency.
The survey itself considered the following:
Providing general information about the Forestry Industry
- The proportion of the Sector made up of large firms (70%) and SMEs (30%).
- The extent to which the COVID-19 crisis experienced by the Forestry Sector will spill over to other, up- and downstream, associated industries, as well as the informal sector. For the Forestry Sector this would be to a great extent. This is due to large producers also being the primary market for upwards of 21 000 SME timber suppliers and hundreds of upstream and downstream suppliers of other products and services. Furthermore, reduced consumer demand and mobility would have a significant impact on retailers, distributors, manufacture of forestry goods, as well as forestry operations.
The economic impact to date of the current lockdown
- Currently the Sector is under partial lockdown, with between 61-70% of the Industry still operational.
- While some producers of essential goods, such as tissue manufacturers, pulp, plywood and packaging producers are managing to continue most production, producers of products that are ancillary to the production of essential goods, for example timber growers providing the feedstock for products such as medicines, cleaning and hygiene products, energy and food, were battling to get recognition as an essential service/product. This was causing particular issues with enforcement agencies who could not see the clear link between their product and an essential service. There is a need for clear links between ancillary products the essential goods they are the feedstock for to be reflected in SAPS SOPs.
- A 21-30% decrease in demand of Forestry Products has been experienced. In particular, domestic demand for almost all other products, except pulp, has declined as a result of producers further down the value chain struggling to maintain production and the decrease in retail sales, consumer mobility and the inability of enforcement agencies to recognise these sub-sectors as essential.
- Despite the lockdown challenges between 91 – 99% of Industry payroll for March was met. Although the figure for temporary, short-term and part-time workers that remained employed and were paid at the end of March, 71-80%, was lower.
- One month’s cash cover was offered as an estimate of the average cash reserve available to most companies within the Sector. Unfortunately, there was no industry payroll contingency in the Forestry Sector.
Future lockdown scenarios
The impact of three proposed Lockdown scenarios on the sector was evaluated and presented in the table below:
Other sector-specific negative effects and implications of concern to the forestry sector was that the reduced local production in the paper industry could result in long-term market implications as the industry is vulnerable to imports.
The Forestry Sector has numerous Health and Safety interventions in place in current Industry COVID-19 policies and plans. These include:
- Working from home
- Enforcing social distancing
- Personal workplace hygiene
Between 1-10% of the Industry’s workforce was able to work remotely and productively at home. Of those that could not work remotely, between 41-50% require public transport (including minibus taxis) to get to and from work.
Workforce demographics, with particular emphasis placed on persons who medical consensus believe to be at greater risk from COVID-19 included 21-30% of the workforce (over 50 years of age) and 31-40% (men) of the workforce. Of the high-risk workforce (over-50 years of age) 1-10% could work remotely.
The following interventions are ‘possible practically’ and the industry would be able to implement if lockdown was lifted on 17 April:
- Masks for all employees
- Other Personal Protective Equipment for all employees
- Providing or paying for private travel to work
- Enforcing social distancing of 2m at work
- Remote work for those who do not have to be on site
- Screening and testing of all employees
- Isolation of ill employees
- Personal hand-sanitising
- Industrial sanitising of work spaces
- Training and behavioural nudges
Unfortunately, it was reported that the following was identified as not possible:
- Allowing workers older than 50 or with underlying respiratory conditions to remain at home (on pay), even if they are not able to work remotely
- Remain at home on pay for higher-risk groups, even if there are not able to work remotely
- Alternating split workforce (red and blue teams)
As the UIF support offered by the State only applies to minimum wages. As the average forestry wage, in larger firms, is considerably higher than minimum wage, it means that companies will not be able to keep people on payroll who cannot work, if the lock down is prolonged.
We believe the country’s rapid response in reaction to the COVI-19 pandemic will assist in curbing the impact of this devastating virus. Hopefully the research presented to the President in the next few days suggest that the controls have been affective and that these results may assist in lifting further restriction on our and other economic sectors.
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