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22
Jun

3rd Newsletter June 2020

Lean years and growth years.

The global depression in the years following the First World War had a dampening effect on world trade, with the leather industry heavily impacted. Sales were scarce and stock of extract began to mount. Production ground to a standstill, and focus turned to maintaining the factories, tending to the land and waiting for brighter days to return. Recovery was slow to come.

In the Land & Agricultural Yearly Review, Mr Thomas Herald wrote:
“The price of Wattle Bark is still low and there does not seem any prospect of a rise in the near future.”

It was a crisis that threatened the company’s existence in a sector that only a few years earlier had been flourishing.

Forestal’s investment in South Africa was impacting cash positions negatively on both continents, and the need for change was critical.

The board needed a turnaround strategy, which came in the form of a Charles W. Biggs. His reputation, sharp wit and good judgement proceeded him, and he was appointed the position of General Manager and given a bold mandate to transform the company. Failure was not an option.

Charles Biggs’ infectious enthusiasm and clarity of purpose had an immediate impact on the staff. He outlined a strategy to improve margins and strengthen relations with foreign buyers.

Despite conditions remaining lean, the NTE team shared a mission and were relentless in their desire to succeed.

Within two years, NTE was again a profitable member of the Forestal family, and began enriching Natal’s Wattle Industry to a flourishing primary industry in South Africa.

Despite the decade’s slow start, the twenties were destined to build up a head of steam. The world shrugged off the depression of the First War and the global economy grew steadily. The orders for extract, once a rare event, began arriving with increasing regularity.

With wattle aplenty across the plantations, production expanded until all factories were at full capacity. The price for Wattle Bark in London was not only up to £44 a ton, but production could not keep up with demand and new avenues of growth would need to be explored!

At the time, NTE owned three factories producing solid extract and had 38,400 acres of the best land under cultivation. Mr Biggs, with the blessing of the Forestal Board, began seeking new worlds to conquer. Expeditions were undertaken to Kenya and Southern Rhodesia. Both areas had fine land for growing wattle, but poor infrastructure meant costs of export would be exorbitant. Despite some frustrations north of the border, recommendations were submitted to the Board in 1925 where Mr Biggs, together with General John Royston, identified swathes of land for sale in the areas surrounding Melmoth in Zululand and Piet Retief in the Eastern Transvaal. The proposal was accepted, and after some due dilligence, the plan was put into operation.

NTE developed wattle estates and erected a bark mill. Factories were erected at Melmoth and Iswepe to process bark from each locality. With close to three decades of knowledge gained in Natal and the introduction of heavy machinery, the development of wattle in Piet Retief and Zululand was both efficient and highly productive.

By 1928 the Natal Tanning Extract Company Limited owned thirty estates around Pietermaritzburg, a cattle farm and an experimental station. With over 40,000 acres under wattle and a world-leading production facility in Pietermaritzburg distributing globally, good times had once again returned to NTE.

In the years that followed, NTE would consolidate, innovate and expand operations into Kenya. Wattle was becoming a mature market, and under the steady leadership of Charles Biggs, NTE would maintain market leadership. But that, as they say, is the subject of our next newsletter. Stay tuned.

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