The bid by global pulp and paper giant, Mondi, to acquire KwaZulu-Natal plantation arranged as Draycott and Greytown Timber Plantations has been approved by South Africa’s Competition Commission.
The Commission announced its approval of the large merger yesterday saying it found that the transaction was unlikely to substantially prevent or lessen competition in any market. The relevant market in this merger was for the production and supply of hardwood pulpwood and untreated hardwood poles in KwaZulu-Natal in a 250km radius from the two plantations and the national market for the production of hardwood pulp and treated telephone, transmission, fencing and building poles.
The Commission also said the proposed transaction does not raise any public interest concerns.
The target properties were operated by World Hardwood which is part of the R&B Group and is involved in harvesting, processing and pressure treating wooden poles. The poles are supplied to transmission, telecommunications, construction, and fencing customers. The R&B Group also owns a number of timber plantations.
Mondi is a multi-billion dollar business that grows and mills hardwood. Its main hardwood product is bleached hardwood pulp, which is used in paper production activities, sold to tissue producers and exported.