Cultivating a community

Family-based business Rance Timber uses its business of chopping down trees to lay down roots for the growth of social equality and progress

Pine sawmilling and forestry company Rance Timber has been in the lumber business for 65 years and rode out a number of challenges along the way.

Operations director John Rance, one of founder Charles Rance’s three sons, reveals that the company has “survived expropriation by government, nationalisation of the forestry industry in its formative years and some serious downturns in the economy,” to be standing tall today as a not only a successful producer of pine lumber products, but also as a pillar of support for the local community.

“I guess the ethos of the company is honesty, hopefully integrity, respect for people no matter what their social or economic standing and a dogged determination,” John says. “We’re a family-based company and we care about people – our customers, suppliers, employees and even competitors. We try not to subjugate our people to impersonal systems; rather we try to use systems to enhance the capabilities of the people we’re associated with.”

Reading the rings

Back in 1944, Charles John “Jack” Rance pioneered the sawmilling industry in the Eastern Cape with a number of small sawmills located there and in former Transkei. These were all expropriated by the previous government during the apartheid era, leading Rance Timber to purchase the defunct state-owned sawmill at Kubusi and relocate to Stutterheim, in the Amathole area of the Eastern Cape Province. Since its appropriation in 1950 this sawmill has been modernised, expanded and joined by another sawmill that was purchased from an insolvent estate at Sandile in 2001.

In 2005 Rance Timber was able to purchase the plantations that supply its sawmills from the government. This move gave the uniquely placed company room to progress. “We are an ‘island’ timber economy, separated by many hundreds of kilometres and poor road and rail infrastructure from bigger forestry regions,” he explains. “Our economies of scale are small and neither the plantation timber growing sector nor the sawmilling processing sector in our local forest industry could successfully prosper alone.

“Combining the forestry growing and processing sector has unlocked synergies that have enabled the business to progress. Through its history, the company has had the same shareholders largely with a common vision, driven as much by sentiment and by the satisfaction they see in the business prospering than the money it creates. We have never been a hard-core, capitalist, solely ‘money-driven’ business and hopefully never will be.”

Working for desegregation

Rance now has the capacity to grow its trees on an approximate 30-year growing cycle into sawlogs, harvest these sawlogs and transport them to its sawmills, where they are processed into sawn lumber. This is dried in timber-drying kilns powered by steam produced by burning sawdust, then graded for use in building, furniture, pallet, bin, box and other industries and then treated with preservative. Further processes transform sawn timber into moulded products such as flooring.

The labour-intensive nature of Rance’s activities has enabled it to benefit its local community. “The most significant development over the years has been to hire, train and educate local people,” John says. “People of varying cultures speak a common language, Xhosa, which has got us through some really tough times,” he adds, referring to the racial polarisation driven by apartheid government rule in the 1980s and 90s. The company survived these tough times and remains dedicated to social responsibility.

New legislation that imposes racial employment quotas has aimed to instil social responsibility in businesses across the state, but John thinks it has missed the target. He says it has rather made it difficult to break from South Africa’s racial past by compelling business “to work to bureaucratic, corporate-style ‘scorecards’ that supposedly measure racial integration or rather commitment to such”.

As a company that has always made efforts to desegregate its business, Rance has found the legislation “unfortunate and a difficult pill to swallow”. John explains: “For us it somehow does more to polarise society and institutionalise racism than to eradicate it. Our company had commenced with abolishing any form of racial categorisation against the previous government’s policy long before the ‘new’ South Africa came about.”

Social responsibility

For Rance, social responsibility means far more than simply adhering to quotas. “In essence, it means investing in society, specifically the poorer section who consist mainly of those ‘previously disadvantaged’ by apartheid policies of the past,” John explains. “It also means caring for and not ruthlessly exploiting the environment and society with hard-core capitalism.

“Our company exists in an impoverished rural economy where unemployment can be as high as 60 per cent or more. Given this, we can’t expect to survive and prosper as a wealthy business with relatively wealthy shareholders, directors, managers, technicians and other employees if this creates envy and resentment against our company. We’ve got to be seen to be giving value to society. This is difficult to achieve when the society at large is unknowledgeable and naïve about economic matters and business.”

John believes that Rance does bring value to society, giving back more than it takes. He continues: “Small seedlings, grown locally and worth a few cents are grown out to huge, tall trees using local labour, soil, air and water. These trees are harvested and processed locally, using local labour and few inputs imported from other regions and the finished product is exported to wealthier economies in South Africa and elsewhere, with that income repatriated to our impoverished local economy. That is virtually creating value from nothing.”

Rance’s activities also benefit the environment, says John. “While the trees are growing on a sustained yield cycle [never harvesting more than is re-established] they suck millions of tonnes of carbon dioxide out the atmosphere, re-fixing it into the soil,” John says. “And the roots and debris from the trees enervate the soil that produces them.”

All beneficiaries of the company – shareholders, directors, senior managers, technicians, administrative personnel and so on – are part of the local economy.

“There is no head office located elsewhere or shareholders based outside the region to siphon off profits, dividends and higher salaries; so the income mostly all circulates locally, giving sustenance to and stimulating other local economic activities,” John adds. “Entrepreneurial and management talent is also retained locally and contributes to sustaining social institutions such as schools, sport clubs, churches and service organisations. So we reckon our greatest social responsibility is to keep it that way, to prosper and to expand on that kind of business activity.”

Cost-effective innovation

Valuing social development over large profits has driven Rance to make the most out of its limited resources and opportunities through innovation. For example, the process of debarking logs for ease of processing is expensive but many companies make it worthwhile by selling the woodchips by-product to pulp, paper and board processors. This market was not available to Rance, so instead it found a way to transform bark stripped off logs into compost that could be sold to plant nurseries and other agricultural operations.

“We’re proud of the fact that this product has stimulated other industries in this region that would have been unable to take hold if that product had not been available to them,” John says. “The same is now happening with wood shavings from the planing and moulding processes.”

Branching out

Rance’s future goal is to make more money to put towards its targets, which include improving value to shareholders and customers so that they continue to invest in the company and its products. More significantly, Rance aims to improve the lives of its employees, as well as the socio-economic circumstances of the impoverished rural community in which it’s based.

“Our plan is to grow, prosper and survive in a challenging environment,” John says. “Our country, and particularly the Amathole region, suffers from low education standards and lack of economic knowledge and understanding of business and private enterprise.

“We’re a democratic country with a wonderful constitution, for now. But democracy is only as safe as the collective wisdom of the voting public. African people are patient and intelligent. But to jump-start a few hundred years of almost total lack of knowledge of economic matters is challenging. Therefore our company has to be seen to be giving value in the communities in which it operates.”

To provide this value Rance is expanding into agriculture and agriculture processing business in areas where there is an almost a complete lack of economic activity and infrastructure. John explains: “It’s pioneering work and exciting, and even more exciting to see people who’ve never had the opportunity of a job, getting the self-esteem of earning income from their own efforts, rather than from government hand-outs.”

This new branch of the company is called Rance Rural Development and its aim is “creating employment and uplifting communities through sustainable business”. This ambition, among others, indicates that Rance Timber is planting seeds not only for the growth of trees and forests, but for the growth of people and communities as well.