Project detail - York Timbers (Proprietary) Limited

Who is our customer

York Timbers Proprietary Limited (hereafter York Timbers) is a subsidiary fully owned by York Timber Holdings Limited, listed on the Johannesburg Stock Exchange. York is the largest solid wood, lumber and plywood producer in South Africa, with operations centred in two main geographic areas namely; the Highveld operations in Jessievale and Escarpment Operations in Sabie. As an integrated forestry company, York Timbers manages approximately 60,000 hectares of FSC-certified high-quality pine plantations and around 30,000 hectares of high conservation area, and operates two sawmills and one plywood mill. York has also recently diversified into agriculture and crops (i.e. avocado, macadamia, and soft citrus).

What is our funding objective?

The investment aims to refinance existing long-term debt facilities, to fund land acquisition and relevant planting activities, and to support general working capital.

Why do we fund this investment?

York Timbers is an integrated forestry company owning and managing pine plantations and operating efficient wood processing plants. This is a strong fit with FMO’s Forestry Strategy. FMO’s facility will match with the maturity profile of the plantations, which will further support York Timbers to reduce its dependency on third-party wood supply, improving cost competitiveness. FMO's additionality is evident by establishing enduring partnerships with York Timbers for the long term.

What is the Environmental and Social categorization rationale?

York Timbers falls under E&S category A due to the permanent nature of its activities, the significant footprint (about 60,000ha of 80,000ha), diverse nature of operations (Forestry and Fleet, Processing, Wholesale, and Agriculture) and potential impact on local communities and biodiversity. FMO’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with certain IFC Performance Standards (PS). PS1 to PS4 and PS6 (biodiversity) will be applicable to all operations. Additionally, PS5 (Land Acquisition) will be applicable to the use of proceeds. The absence of Indigenous People (PS7) has been confirmed. Cultural Heritage (PS8) sites on York Timbers' existing landholdings have been identified, documented and mapped, with management plans implemented. York Timbers has implemented management measures to limit the risk and offset the potential impacts including receiving FSC certification for the forestry operations. The project’s compliance with the IFC Performance Standards, further mitigation measures identified by FMO, existing management measures and the Environmental and Social Action Plan will undergo periodic review.

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Date	Total FMO financing
4/12/2024	ZAR 87.50 MLN