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VENTURES: Boskor Bounced Back To Swartland

 



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THE amount of corporate activity that Swartland Boudienste has been involved in of late certainly belies perceptions that the company is a small platteland player manufacturing wooden doors and window frames from ‘rustige’ Malmesbury.

But if the business is determined to build on its strong building products brand by carving out a rather sizeable niche in the broader timber sector then one can’t but help noticing that its best laid plans have tended to go awry.

Swartland Boudienste, founded in the early fifties, already made a cameo in CBN in early 2011 when it was listed as a possible suitor for listed timber specialist Kay-Dav’s loss-making Castle Timbers, as Bellville-based timber manufacturing plant.

At that time a proposal was on the table for Castle Timbers to sell ‘certain assets’ - including machinery, goodwill and stock - to Swartland Boudienste for R6 million plus the net asset value of the machinery (around R1.8 million) and the total cost of the stock.

The deal, though, was called off (for reasons unknown), and Castle Timbers was sold to Cape Sawmills.

More recently, though, there was the rather dramatic reinstatement of Swartland Boudienste as the owner of the Boskor sawmills in Tsitsikamma.

From what CBN can piece together, Swartland Boudienste bought the Boskor assets from paper and pulp giant Sappi (for an undisclosed sum) in 2003. Four years later Swartland Boudientse sold Boskor to MTO (Mountain to Ocean), a forestry grouping in which Cape-based Cape Pine Investments was the major shareholder.

While the merger between MTO and Boskor has been chopping along for five years, a number of disgruntled parties looked at overturning the merger by appealing to the Competition Commission.

The merged company, MTO, faced opposition from a local sawmill in Tsitsikamma (AC Whitcher) as well as various subsidiaries of the Steinhoff International group, whose protestations eventually saw stringent trading conditions placed on the merged entities operations in the region.

With the trading conditions foisted on the merged entity so onerous it seems there was no choice but to abandon the five year old merger.

Comptetition Commission documentation showed that AC Whitcher was a customer of MTO, and believed its interests would be adversely affected by the merger.

The documentation also showed that merger conditions stipulated that the merged entity allocate 35% of its sawlog output (broken down in various categories of sizes, species, origin and other characteristics) to the open market – which was to include Whitcher and the Steinhoff companies.

MTO held that the conditions were impractical, expensive to apply, and that compliance was impossible, leading to a decision to dismantle the arrangement.

So it was from this rather controversial state of affairs that Swartland Boudienste took receipt of a former asset.

CBN can’t imagine there’s too much enthusiasm at Swartland Boudienste at having to re-incorporate an asset after five years. Whether the company bumbles along with Boskor or urgently seeks another buyer will be interesting to see.


 
 
 
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